Energy-Intensive Industrial Rates Workgroup Information Session

Steve BakkalMichigan Energy Office

Michigan Economic Development Corporation

March 24, 2014

Energy-Intensive Industrial Rate Workgroup Information Session

March 24, 2014

8:30 am – 11:30 am

Michigan Public Service Commission Temporary Offices Hearing Room 1

4300 West Saginaw Lansing, MI 48917

Agenda

8:30-8:35 Welcome Dan Blair, MPSC 8:35-9:00 Workgroup Process, Scope Steve Bakkal, MEDC 9:00-10:00 Cost of Service Ratemaking Steve McLean, MPSC 10:00-10:20 Utility Perspectives Don Stanczak – DTE, VP of Regulatory Affairs 10:20-10:40 Doug Roberts – CMS, State Governmental Affairs

& Mike Torrey, Rates and Regulation 10:40-11:00 Jim Ault, MEGA 11:00-11:15 Participant Selection Process Steve Bakkal 11:15-11:30 Q&A All

Objective:

Develop non-legislative options that can reduce electric rates for energy intensive companies, abiding by existing policies and cost-of-service principals.

Process:

Establish a workgroup consisting of a manageable number of stakeholders selected through an open, transparent process that develops, analyzes, and reports various options.

Deliverable – Inform Decision Makers:

A final report of options that will be used to inform the Governor, legislative staff, MPSC, and stakeholders. This report will detail how various options will impact all ratepayers and their potential implementation methods and timelines.

Final report will be issued by the workgroup and should not be construed as being reviewed or approved by MPSC commissioners

Workgroup Scope

Workgroup is not replacing existing regulatory process or procedures.

Cost allocation, rate design, and other rate options that can be implemented without legislation.

The workgroup will be chaired by Steve Bakkal (MEDC) and consist of participants representing:

(2) Large utilities

(1) Small utility

(2) Legislature (house and senate staff)

(2) MPSC staff

(Up to 10) Energy intensive business customers representing broad range of industries and geographic locations

Workgroup Participants

Workgroup may choose to define specific usage characteristics, but companies will generally have the following in common:

1) Energy costs are significant portion of company's operating costs. This can apply for small and large users.

2) Energy costs are one of the top factors used for investment and location decision for that industry.

Potential options developed could benefit a larger group, but should generally focus on the above.

Definition of Energy-Intensive Business

Workgroup Selection Process• Utility, legislative, and MPSC staff selected with direct outreach

• Business customers can nominate themselves or other businesses by 5pm March 31, 2014.

• Go to www.michigan.gov/energy , click on Workgroup, scroll down to Apply Now.

Workgroup Selection Process for BusinessesBusiness customer nominees will be asked to submit the following information: • Brief description of relevant experience/general knowledge of

topics and the regulatory process.

• Knowledge of respective industry needs, challenges. Preference will be given to nominees recognized by multiple industry peers in addition to their business.

Members selected will be contacted directly by April 2, 2014. Selections will also be posted on www.michigan.gov/energy under the Workgroup page.

• Commitment to meet with the workgroup bi-weekly on Mondays @ 9:00am in Lansing (preferred) or by phone starting April 7th through end of May.

• Active participants at the meetings, offering suggestions and providing input from own company experience and industry peers.

• 4 workgroup meetings will be closed, but members are encouraged to get input from peers, associations, industry experts, etc. outside of meetings if necessary.

Businesses Customer Participant Roles & Expectations

Timeframe

March 24th – Announce workgroup process, solicit businesses to serve on workgroup

March 31st – Deadline for business customer nominations

April 2nd – Workgroup members announced

April 7th * – First workgroup meeting, introduce participants, develop assignments

April 21, May 5, May 19th * – Additional workgroup meetings

May 30th – Draft options finalized by workgroup

June 9th – Draft report available online for stakeholder/public comment

June 20th – Comment period closed

June 27th – Final report issued * Closed meetings

Questions

Steve BakkalMichigan Economic Development Corporation

bakkals@michigan.org