April 6, 2001 - force.com

April 6, 2001

Ms. Dorothy Wideman Executive Secretary Michigan Public Service Commission 6545 Mercantile Way Lansing, Michigan 48909-7721

Re . . MPSC Case No. U-12639

Dear Ms. Wideman:

Please find enclosed an original and four copies of The Detroit Edison Company’s Answer Opposing Energy Michigan’s Motion to Compel along with proof of service.

JPC/dj Enclosures

cc: Service List

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

In the Matter, on the Commissions )own motion, to implement the )provisions of Section 10(a)(10) ) MPSC Case No. U-12639of 2000 PA 141. )________________________________)

THE DETROIT EDISON COMPANY’S ANSWER OPPOSINGENERGY MICHIGAN, INC.’S MOTION TO COMPEL

THE DETROIT EDISON COMPANY

By: Bruce R. Maters (P28080)Jon P. Christinidis (P47352)2000 Second AvenueRoom 688 WCBDetroit, Michigan 48226(313) 235-7706

Dated: April 6, 2001

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TABLE OF CONTENTS

INTRODUCTION.............................................................................................................1

DISCUSSION ..................................................................................................................2

I. EDISON HAS DISCLOSED ALL APPROPRIATE INFORMATION......................2

II. ENERGY MICHIGAN'S MOTION TO COMPEL LACKS MERIT……………………2

III. EDISON'S CONFIDENTIAL INFORMATION IS ENTITLED TOPROTECTION ......................................................................................................5

CONCLUSION AND RELIEF ........................................................................................14

EXHIBITS

A. Detroit Edison Discovery Responses and March 31, 2000 Proof of Service fromMPSC Case No. U-11800-R.

B. MPSC Case No. U-11130, In the matter of the application of Nordic Electric,L.L.C., for a certificate of public convenience and necessity to serve retail wheelingcustomers in the electric service territory of Consumers Energy Company, Orderdated October 20, 1997,

C. Discovery Response of Energy Michigan DEEM 1.1/78

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INTRODUCTION

On October 24, 2000, this Commission issued an Order and Notice of Hearing

initiating a contested case proceeding under Section 10a(10) of 2000 PA 141 (Act 141"),

which provides:

The commission shall consider the reasonableness andappropriateness of various methods to determine net strandedcosts, including, but not limited to, all of the following:

(a) Evaluating the relationship of market value to the netbook value of generation assets and purchased powercontracts.

(b) Evaluating net stranded costs based on the market priceof power in relation to prices assumed by thecommission in prior orders.

(c) Any other method the commission considersappropriate. MCL 460.10a(10); MSA 22.13(10a)(10).

Various parties intervened, including Energy Michigan, Inc. (Energy Michigan),

which, essentially (as represented in Energy Michigan’s Petition to Intervene) is a trade

association for power producers and marketers. Pursuant to the competitive interests of

its members, Energy Michigan served The Detroit Edison Company (Edison) with discovery

requests EMDE 3.14/59, 3.15/60 and 3.16/61. Edison objected, in part, because those

requests seek confidential information.

On March 30, 2001, Energy Michigan filed a motion to compel. Edison now files

this answer, explaining that Energy Michigan’s motion should be denied in its entirety

because Edison has provided, or will provide as it becomes available, all appropriate

publicly available information in response to Energy Michigan’s discovery requests. The

remainder of those requests seek confidential information that is entitled to substantial

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protections under well-established case law and Commission precedent.

DISCUSSION

I. EDISON HAS DISCLOSED ALL APPROPRIATE INFORMATION.

Energy Michigan’s discovery requests state:

EMDE 3.14/59: Please provide all power purchase contracts,excluding contracts for QF or PA 2 power relating to powerpurchases for the year 1999, 2000 and projected 2001.

EMDE 3.15/60: Please provide the total annual MWH andtotal cost of power purchased, excluding QF and PA 2 powerfor the years 1999 and 2000 actual and 2001 projected.

EMDE 3.16/61: Please provide the actual peak demand forthe years 1997 through 2000 and projected peak demand forthe years 2001 through 2007, with open access service andwithout open access service.

Energy Michigan already has much of the historical information requested in EMDE

3.15/60 and 3.16/61. (See Exhibit A, Detroit Edison Discovery responses and March 31,

2000 Proof of Service from MPSC Case No. U-11800-R) Edison is willing to provide new

or additional copies of any other publicly available information sought by these discovery

requests, if necessary. However, Edison objects to providing various future business

projections, which are clearly confidential and proprietary information. Edison similarly

objects to providing the power purchase contracts requested by EMDE 3.14/59.

II. ENERGY MICHIGAN’S MOTION TO COMPEL LACKS MERIT

Energy Michigan argues that 2000 PA 141 requires the disclosure of all purchase

power contracts. That is absolutely wrong. 2000 PA 141 Section 10a(10)(a) addresses an

evaluation of “market value to the net book value of…purchased power contracts.” In other

words, the statute contemplates the evaluation of power purchase agreements of sufficient

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duration and with a significant difference between the market value of the contract and the

price paid for the power reservation, such that the subject contracts result in the creation

of stranded costs. Pursuant to MCL 460.6j(13)(b) Detroit Edison is, effectively, prohibited

from entering into continuous long-term power purchase agreements without prior

Commission approval. As Energy Michigan is aware, Detroit Edison executes, almost

exclusively, short-term power purchase contracts on a year-to-year basis, except as

required by MCL 460.6o, also known as “PA 2 Contracts” with resource recovery facilities.

Energy Michigan excluded such publicly available PA 2 contracts from its discovery

requests.

Thus, Energy Michigan’s discovery request seeks only short-term contracts that are

unlikely to have significantly different market values than the price paid by Edison (ie. an

evaluation of the market value to the net book value of these short-term purchase power

contracts would provide little, if any, basis to determine “net stranded costs.”) Furthermore,

Edison has never requested recovery of any short-term power purchase contracts as

“stranded costs” and is not making such a request in this case. Where such an evaluation

makes sense is with PA 2 and QF contracts which utilities were required to execute as a

result of regulation, and which generally extend over many years. Detroit Edison and

Consumers Energy have requested stranded cost recovery for PA 2 and QF contracts.

Seen in this light, it is clear that not only does 2000 PA 141 not require the

disclosure of such information, its fundamental competitive purpose discourages such

misuse of administrative proceedings. The Act seeks to “foster competition,” “ensure that

all persons in this state are afforded safe, reliable electric power at a reasonable rate” and

“promote financially healthy and competitive utilities in this state.” (2000 PA 141 Sec.

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10(2)(b)(d)(e)) If Energy Michigan’s efforts are successful, it will have lowered the

competitive bar by disclosing the power acquisition activities of Edison to every potential

competitor in Michigan. Such a disclosure would harm competition by enabling Edison’s

competitors to unfairly set prices in relation to Edison’s power costs, and harm Edison’s

ability to competitively procure reliable and economic power in an era of frozen rates, to

Edison’s financial and competitive detriment. (See Exhibit A – Discovery Response EMDE

3.14/59 Affidavit of James H. Byron)

Furthermore, Energy Michigan’s assertions in its Motion to Compel are inconsistent

with the representations it made in its responses to discovery. Energy Michigan filed its

Motion to Compel on March 30, 2001 stating:

This information is critical in evaluating the suitability of amethod of determining stranded cost relating to loss of peakload… (Energy Michigan Motion to Compel pp. 2-3)

Energy Michigan continues by asserting:

…the information is critical to the statutory mandate todetermine stranded costs. (Energy Michigan Motion to Compelp. 3)

However, in response to a discovery request seeking the nature of and subject matter of

any expected Energy Michigan evidentiary presentation, also submitted by Energy

Michigan on March 30, 2001, counsel for Energy Michigan claimed:

No final decision has been made regarding the subject matter,nor the page numbers of Detroit Edison prefiled testimonywhich will be addressed.

It is simply not credible for one of Edison’s business competitors to assert, on the one

hand, that Edison’s confidential, commercial and proprietary business information is critical,

while, on the other hand, claiming that it has no idea what its position will be in this case.

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Put simply, Energy Michigan’s discovery request is a thinly-veiled attempt to obtain

competitively sensitive business information through an administrative proceeding before

the Commission. Permitting such a misuse of the administrative process will send a strong

message to all electric supply competitors that Michigan is not a good place to do

business.

III. EDISON’S CONFIDENTIAL INFORMATION IS ENTITLED TO PROTECTION.

Edison has operated for many years in Michigan, providing universal service to

customers throughout its service area at regulated rates pursuant to franchises. Edison

and other electric power suppliers have been moving into a more competitive environment

for several years, especially in the wholesale purchase power market.

Energy Michigan seeks public disclosure of information that would put Edison in an

unfavorable competitive position. See the affidavits of James H. Byron and Aldo

Colandrea, Exhibit A. Edison objects and asserts its rights to keep this information

confidential. Edison seeks to prevent the exploitation of its commercial information by

competitors.

There is an even greater need for protection in the competitive market today than

there was in the past, when the Commission had already recognized the need for

confidentiality. See Residential Ratepayer Consortium v Public Service Comm'n No 2, 168

Mich App 476; 425 NW2d 98 (1987) (affirming the Commission's treatment of Edison's

coal contracts as confidential). In Case No. U-11175, for example, the Commission

explained that commercially sensitive information must be protected from disclosure in the

new, competitive electric power market.

"Orders issued by the Commission and the Federal Energy

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Regulatory Commission have opened the doors to competitionin the electric power market. Accordingly, the contention thata utility will be irreparably compromised by disclosure ofcommercially sensitive information and confidential cost datais much more compelling than it was a dozen years ago" (CaseNo. U-11175, February 11, 1997 Order, p 6).

Commercially sensitive information has become even more sensitive after the

enactment of 2000 PA 141. Logic dictates that in order for there to be a level playing field,

one provider of electricity should not be given access to any sensitive commercial

information of a competing provider. The Legislature has recognized a public policy in favor

of protecting sensitive commercial information in other regulated industries that are moving

toward full competition. For example, in the telecommunications industry, the Legislature

enacted a new regulatory scheme based on competition. See 1991 PA 179 and 1995 PA

216, MCL 484.2101 et seq; MSA 22.1469(101) et seq. The Legislature made sweeping

changes at the end of 1995 that allowed competition among providers of basic local

exchange service and provided corresponding protection for sensitive commercial

information. See MCL 484.2210(3); MSA 22.1469(210)(3).

Energy Michigan’s reliance on the Commission’s obligations under Section 10a(10)

of Act 141 is clearly misplaced. Assuming arguendo, that there is a need for this

information by the Commission or its Staff (which Edison denies), that need does not

extend to private competitors of Edison. In fact, Energy Michigan’s members have sought

and received protections from the Commission for their own wholesale power purchase

contracts. MPSC Case No. U-11130, In the matter of the application of Nordic Electric,

L.L.C., for a certificate of public convenience and necessity to serve retail wheeling

customers in the electric service territory of Consumers Energy Company, Order dated

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October 20, 1997, established strong precedent for the confidential treatment of wholesale

power contracts and became the template for numerous similar applications, settlements

and Commission orders,1 all of which specifically referenced the confidentiality standard

set forth in MPSC Case No. U-11130. That standard is:

Nordic Electric shall submit a full and complete copy of itspower supply agreement with Cinergy for review by theCommission and the following members of the CommissionStaff: Director of the Electric Division. The Commission and theStaff agree that the power supply agreement is confidentialand that the terms of the agreement shall not be disclosed tothe public or to any party in Case U-11130. The information inthe power supply agreement shall be used by the Commissionand the Staff solely for their review of Nordic Electric’sapplication for an Act 69 certificate in Case No. U-11130. TheCommission and the Staff agree that the power supplyagreement shall be returned to Nordic Electric upon entry ofan Order in Case No. U-11130, provided that redacted copiesof the power supply agreement obtained through discovery inCase No. U-11130 may be retained. MPSC Case No. U-11130, Order dated October 20, 1997, p. 13 Exhibit 1(emphasis added)

Nothing in the Act requires the disclosure of confidential commercial information to

competitors. In fact, to require such disclosure would violate well-established Commission

1Those cases utilizing this confidentiality standard include MPSC Case No. U-11601, In the matter of theapplication of Nordic Electric L.L.C, for a certificate of public convenience and necessity to provideunbundled generation service to retail electric customers in portions of Consumers Energy Company’s serviceterritory, Order dated March 20, 1998; MPSC Case No. U-11631, In the matter of the application of FirstPower, L.L.C., a Michigan Limited Liability Company, for a certificate of public convenience and necessity toserve retail customers under applicable open access program, Order dated April 14, 1998, MPSC Case No.U-11661 In the matter of the application of First Power, L.L.C., a Michigan Limited Liability Company, for acertificate of public convenience and necessity to serve retail customers under applicable open accessprogram, Order dated June 26, 1998; MPSC Case No. U-11683, In the mater of the application of NordicElectric, L.L.C. for a certificate of public convenience and necessity, Order dated June 26, 1998; MPSC CaseNo. U-11713 In the mater of the application of Nordic Electric L.L.C. for a certificate of public convenienceand necessity to serve retail wheeling customers in the electric service territory of Consumers EnergyCompany, Order dated August 27, 1998; MPSC Case No. U-11780, In the matter of the application of NordicElectric, L.L.C., for a certificate of public convenience and necessity to serve retail wheeling customers inthe electric service territory of Consumers Energy Company, Order dated November 18, 1998.

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policy and would likewise inhibit the creation of a competitive electric marketplace, as

contemplated by 2000 PA 141.

To the extent that such information might be required to be disclosed to the

Commission or its Staff (which Edison denies is necessary), a protective order should be

entered to prevent further disclosure to Edison’s competitors, including Energy Michigan’s

members, and any other parties in this case. Act 141 does not prohibit the use of

protective orders. The Commission has utilized protective orders in prior cases, including

the use of sealed records, to maintain confidentiality of materials. In re MBT Centrex

Service, Case No. U-9321 (December 7, 1989 Order, p 4); In re Consumers Power Co

1988 GCR, Case No. U-8867 (March 15, 1988 Order, pp 5-6); In re Midland Cogeneration

Venture Limited Partnership, Case No. U-8871 (February 23, 1988 Order); In re City

Signal, Case No. U-10225 (January 12, 1993 Order); In re Permanent Interconnection

Arrangements Between Basic Local Exchange Providers, Case No. U-10860 (1995); In re

Ameritech TSLRIC Studies, Case Nos. U-11155 and U-11156 (September 12, 1996 and

October 16, 1996 Orders); In re GTE Cost Studies, Case No. U-11207; In re Commission's

Motion Re TSLRIC Studies and Prices for Unbundled Elements and Other Services for

Ameritech and GTE, Case Nos. U-11280, U-11281 and U-11224 (December 12, 1996

Order).

Energy Michigan’s request for Edison’s power purchase contracts (EMED 3.14/59)

is analogous to MPSC Case No. U-11130, in which the Commission recognized that

wholesale power purchase agreements contain confidential information.2 In that case, the

2 In fact, that protection was granted to Nordic Electric, Energy Michigan’s most active member. Furthermore,Energy Michigan’s response to discovery from Edison discloses that it will likely utilize the consulting services

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Commission limited disclosure of the confidential portions to only the MPSC Staff, “in order

to strike a proper balance between the public interest in disclosure and the protection of

commercially sensitive information in a competitive environment.” Again, the Commission

adopted and approved the following treatment of Nordic Electric’s wholesale power

purchase contract:

Nordic Electric shall submit a full and complete copy of itspower supply agreement with Cinergy for review by theCommission and the following members of the CommissionStaff: Director of the Electric Division. The Commission and theStaff agree that the power supply agreement is confidentialand that the terms of the agreement shall not be disclosed tothe public or to any party in Case U-11130. The information inthe power supply agreement shall be used by the Commissionand the Staff solely for their review of Nordic Electric’sapplication for an Act 69 certificate in Case No. U-11130. TheCommission and the Staff agree that the power supplyagreement shall be returned to Nordic Electric upon entry ofan Order in Case No. U-11130, provided that redacted copiesof the power supply agreement obtained through discovery inCase No. U-11130 may be retained. (emphasis added)CaseNo. U-11130, Order dated October 20, 1997, p 13, Exhibit 1;Accord, Case No. U-11631, Order dated April 14, 1998; CaseNo. U-11804, Order dated December 21, 1998; Case No. U-11688, Order dated June 26, 1998; Case No. U-11661, Orderdated June 26, 1998.

Edison’s power purchase contracts for the years 1999, 2000 and projected 2001 similarly

contain confidential, commercially sensitive information, and should therefore be protected

from disclosure.

Energy Michigan’s requests for Edison’s costs of electricity and future load

projections (EMDE 3.15/60 and 3.16/61) seek confidential information that could provide

an advantage to Edison’s competitors. This information could be used, for example, in

of a Nordic Electric employee. The competitive implications could not be more clear. See also attached Exhibit

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targeting potential customers and in forecasting future market conditions (and determining

Edison’s thoughts and efforts on such matters) that Edison’s competitors could similarly

use in developing strategies to compete against Edison. See the affidavits of James H.

Byron and Aldo Colandrea, Exhibit A. It would be fundamentally unfair for Edison to devote

its resources to developing and acquiring information, if that information could be

disclosed, free of cost, to Edison’s competitors, for their private interests in competing

against Edison.3

Moreover, requiring Edison to reveal its confidential and proprietary information

would constitute a taking. Edison has a valuable property right in confidential information

that would be destroyed by a disclosure to a competitor. See In re Remington Arms, 952

F2d 1029, 1032 (CA 8, 1991) (public disclosure of trade secrets will extinguish the owner's

property rights); Kubik, Inc v Hull, 56 Mich App 335, 347; 224 NW2d 80 (1974). The Fifth

Amendment of the United States Constitution provides that no person shall be deprived

of property without due process of law and that private property shall not be taken for

public use without just compensation.4 Michigan Const 1963, art 1, sec. 17 and art 10,

C Discovery Response of Energy Michigan DEEM1.1/78.3The members of Energy Michigan are not the only competitors in this proceeding. As an “industry-wide”proceeding, parties such as Alpena Power Company, Midland Cogeneration Venture, Exelon Energy,Consumers Energy, Northern States Power Company, Wisconsin Electric Power Company, Edison SaultElectric Company, Wisconsin Public Service Corporation, Upper Peninsula Power Company, Indiana MichiganPower Company, CMS MS&T Michigan, CMS Marketing, Services and Trading Company, North AmericanNatural Resources, Genesee Power Station, Viking Energy of Lincoln, Viking Energy of McBain, HillmanPower Company, Adrian Energy Associates Grayling Generating Station, Michigan Cogeneration Systems,Sumpter Energy Associates, Granger Electric, Riverview Energy Systems, Cadillac Renewable Energy andMichigan Power would also have access to Edison’s confidential and proprietary power supply information.Clearly, neither 2000 PA 141 nor the Commission intended that this proceeding be misused as forum todistribute competitively sensitive information.

4 The Fifth Amendment of the United States Constitution is applicable to the states pursuant to the FourteenthAmendment, which also provides that no state shall deprive any person of property without due process oflaw.

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sec. 2, contain similar requirements. Requiring Edison to furnish the requested

information, particularly to a competitor, would violate these constitutional rights.

"Failure to provide adequate protection to assureconfidentiality, when disclosure is compelled by thegovernment, amounts to an unconstitutional "taking" ofproperty by destroying it, or by exposing it to the risk ofdestruction by public disclosure or by disclosure tocompetitors. The constitutional limitation cannot be altered byany branch of government."

Wearly v FTC, 462 F Supp 589, 598 (D NJ, 1978); rev'd on other grounds, 616 F2d 662

(CA 3, 1979). See also St Michael's Convalescent Hosp v California, 643 F2d 1369, 1374

(CA 9, 1980); South Fla Growers Assoc, Inc v United States Dept of Agriculture, 554 F

Supp 633, 637 (SD Fla, 1982).

Further, the Freedom of Information Act ("FOIA") could be used as a conduit for

agency disclosure of a company's private information to another company. See Blue

Cross and Blue Shield of Michigan v Ins Bureau, 104 Mich App 113, 128-31; 304 NW2d

499 (1981), lv den 412 Mich 932 (1982). The Wearly Court explained:

"Because of the unique nature of the property, which existsonly so long as there is only a disclosure that is itselfprivileged, the only suitable quid pro quo is an arrangement,tailored to the particular case, that insures against accidental,or unauthorized, or improper disclosure." 462 F Supp at 599.

In light of the FOIA's disclosure requirements, there is a compelling need to protect the

requested information in this case.

Corporate utilities are not precluded from seeking to preserve the confidentiality of

trade secrets required to be disclosed to the Commission. Mountain States Telephone and

Telegraph Co v Dept of Public Service Regulation, 194 Mont 277; 634 P2d 181, 188

(1981). Proprietary business information is a species of private property and the "right to

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hold that property is a fundamental right." Id at 188. The state's right to know statute must

be interpreted in harmony with the United States Constitution. Id at 189. Thus, protection

of proprietary information is required and disclosure is prohibited "to the extent not

necessary for regulation." Id. Disclosure is not necessary for regulation in this case, as

more fully described in Section II.

The Commission has previously issued protective orders in situations where the

disclosure would work as a taking of private property. In In re MBT Centrex Service, Case

No. U-9321 (December 7, 1989 Order, p 6), the Commission stated:

"Notwithstanding the Commission's concern about its ability toprotect Michigan Bell's information from disclosure under theFOIA, the Commission recognizes that disclosure of theinformation could have adverse competitive effects, with harmto Michigan Bell and its ratepayers, and that disclosure couldbe interpreted by a court as an unconstitutional taking ofMichigan Bell's property without compensation. To protect therights and interests of Michigan Bell and its ratepayers and toprevent competitors from using Commission proceedings forunintended anti-competitive purposes, the Commissionconcludes that the information should be protected fromdisclosure to anyone who is not a party to the case, if the lawpermits that result."

See also In re Permanent Interconnection Arrangements Between Basic Local Exchange

Service Providers, MPSC Case No. U-10860 (1995), where Ameritech asserted its

constitutional rights and obtained a protective order.

Courts have long recognized a qualified evidentiary privilege for trade secrets and

other confidential commercial information. See Federal Open Market Comm v Merrill, 443

US 340; 99 S Ct 2800; 61 L Ed 2d 587 (1979), on remand 516 F Supp 1028 (1981).

Although trade secrets are not automatically given complete immunity against disclosure,

the courts have afforded at least limited protection. Merrill, supra, 443 US at 362. See also

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MCR 2.302.

Both the Commission and this Judge are authorized to issue a protective order to

safeguard information that is proprietary, confidential or commercial. The Commission's

Rules of Practice and Procedure (Rules 103 and 317) incorporate the provisions of the

Michigan Court Rules regarding protective orders. The Court Rules liberally provide the

adjudicative body with the discretion to craft appropriate types of protection. MCR

2.302(C) allows the issuance of "any order that justice requires," including orders that

"discovery not be had;" that "discovery may be had only on specified terms and

conditions;" that "certain matters not be inquired into, or that the scope of discovery be

limited to certain matters;" that "discovery be conducted with no one present except

persons designated by the court;" and that "confidential research, development, or

commercial information not be disclosed or be disclosed only in a designated way."

A protective order under MCR 2.302(C)(8) is designed to protect a party's interests

rather than to deprive the requesting party of adequate discovery. Eyde v Eyde, 172 Mich

App 49, 57; 431 NW2d 459 (1988). Such an order is designed to ameliorate the tension

between one party's privacy and the opposing side's quest for information to develop its

case. Id. Imposing restrictions on the use of disclosed documents is a common practice.

Residential Ratepayer Consortium v Public Service Comm'n No 2, supra, 168 Mich App

at 482. As the instant information is wholly unnecessary in this proceeding, prohibiting such

discovery is totally appropriate.

CONCLUSION AND RELIEF

Edison has or will provide Energy Michigan with all appropriate publicly available

information in response to Energy Michigan’s discovery requests. The remainder of those

requests seek confidential commercial information that Edison has rights to protect from

disclosure to Edison’s competitors, such as Energy Michigan’s members. To the extent

that such information is disclosed to the Commission or its Staff, a protective order should

be entered to prevent any further disclosure. Therefore, Edison respectfully requests that

this Commission deny Energy Michigan, Inc.'s Motion to Compel in its entirety.

Respectfully submitted,

. Maters (P28080) Jon P. Christinidis (P47352) 2000 Second Avenue, 688 WCB Detroit, Michigan 48226-1203 (313) 235-7706

Dated: April 6, 2001

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Exhibit AConsisting of: Cover Letter, Proof of Service and Service List to MPSC Case No. U-

11800-R Application, Testimony and Exhibits filed March 31, 2000. MPSC Case No. U-12639 Detroit Edison Discovery Responses

EMDE3.14/59, EMDE3.15/60 and EMDE3.16/61. Affidavit of James H. Byron in MPSC Case No. U-12639. Affidavit of Aldo F. Colandrea in MPSC Case No. U-12639.

Direct Dial No.: (313) 235-7481

Christopher C. Nern Vice President and General Counsel

Thomas A. Hughes Assistant Vice President. Manager Assistant General Counsel

Randall L. Rutkofske Manager Claims & Employment Litigation

Stephen M. Carpman Practice Group Head Commercial *

Frances B. Rohlman Practice Group Head Finance

March 31, 2000

Ms. Dorothy Wideman Executive Secretary Michigan Public Service Commission 6545 Mercantile Way Lansing, Michigan 48909-7721

Re: MPSC Case No. U-11800-R

Dear Ms. Wideman:

Please find enclosed for filing with the Commission an original and fifteen copies of The Detroit Edison Company’s Application, Testimony and Exhibits along with proof of service, for the above referenced matter.

JPC/dj Enclosure

cc: Service List

STATE OF MICHIGAN


In the matter of the application of ) THE DETROIT EDISON COMPANY for ) Reconciliation of its Power Supply ) Cost Recovery Plan for the 12-Month ) Period Ending December 31, 1999 )

Case No. U-11800-R

PROOF OF SERVICE

STATE OF MICHIGAN ) ) ss

COUNTY OF WAYNE )

of March, 2000 she served a copy of THE DETROIT EDISON COMPANY’S

APPLICATION, TESTIMONY AND EXHIBITS upon the parties listed on the

attached Service List, by enclosing said documents in properly addressed .

stamped envelopes and depositing into a mail receptacle located in Detroit,

Michigan.

DORIS J. HILL/ ’

Subscribed and sworn to before me this

MPSC CASE NO: U-11800-R 1999 PSCR

SERVICE LIST

Hon. James N. Rigas Administrative Law Judge Michigan Public Service Commission 6545 Mercantile Way, #I4 Lansing, Michigan 48911 Telephone: 517/334-6374 Fax: 517/334-6398 [email protected]

Donald E. Erickson, Esq. Assistant Attorney General Special Litigation Division 6520 Mercantile Way, Ste. 2 P.O. Box 30218 Lansing, Ml 48909 Telephone: 517/373-l 123 Fax: 5 17/373-9860 [email protected]

David L. Shaltz, Esq. d Attorney for RRC Shaltz and Royal, P.C. 3303 W. Saginaw, Suite C-l Lansing, Ml 48917 Telephone: 5 17132 1-7722 Fax: 5 17/32 l-7738 [email protected]

Robert A.W. Strong, Esq. Attorney for ABATE Clark Hill 255 S. Woodward Avenue, Suite 301 Birmingham, Ml 48009 Telephone: 24819880586 1 Fax: 2481642-2 174 [email protected]

Eric J. Schneidewind, Esq. Attorney for Energy Michigan The Victor Center, Suite 810 201 North Washington Square Lansing, Michigan 48911 Telephone: 5 171482-6237 Fax: 5 171482-6937 [email protected]

Steve Hughey, Esq. Attorney for MPSC Staff Michigan Public Service Commission 6545 Mercantile Way, Ste. 15 Lansing, Ml 48911 Telephone: 517/335-7021 Fax: 5171334-7655 [email protected]

MPSC Case No.: U-12639 Respondent: Legal/J.H. Byron

Requestor: Energy Michigan Question No.: EMDE3.14/59

Page: 1 of 1

Question: Please provide all power purchase contracts, excluding contracts for QF or PA 2 powerrelating to power purchases for the year 1999, 2000 and projected 2001.

Objection: The Detroit Edison Company objects to providing power purchase contracts relating topower purchases for the year 1999, 2000 and projected 2001, for the reasons that therequest is overly broad, seeks excessive detail, is not reasonably calculated to lead tothe discovery of admissible evidence and seeks trade secrets and/or other confidentialresearch and development and/or other confidential commercial and proprietaryinformation.

The Commission determined in MPSC Case No. U-11130 that executed wholesalepower purchase agreements contain confidential information. As a result, theCommission limited disclosure of the confidential portions to the MPSC Staff only inorder to “strike a proper balance between the public interest in disclosure and theprotection of commercially sensitive information in a competitive environment.” MPSCCase No. U-11130, Order dated October 20, 1997 p. 13; Accord, PSC Case No. U-11631, Order dated April 14, 1998; MPSC Case No. 11804 Order dated December 21,1998; MPSC Case No. 11688 Order dated June 26, 1998; MPSC Case No. U-11661Order dated June 26, 1998. Detroit Edison’s power purchase contracts for the years1999, 2000 and projected 2001 also contain confidential, commercially sensitiveinformation.

The Commission has further determined in a recent Detroit Edison PSCR case, “Ordersissued by the Commission and the Federal Energy Regulatory Commission haveopened the doors to competition in the electric power market. Accordingly, thecontention that a utility will be irreparably compromised by disclosure of commerciallysensitive information and confidential cost data is much more compelling that it was adozen year ago.” MPSC Case No. U-11175, Order dated February 11, 1997 p. 6.Clearly, commercially sensitive information has become more sensitive subsequent tothis ruling and the enactment of 2000 PA 141.

The Detroit Edison Company incorporates herein by reference all pleadings andaffidavits filed by The Detroit Edison Company in MPSC Case No. U-11175, as well asall orders issued in that proceeding.

See also, attached Affidavit of James H. Byron.

MPSC Case No.: U-12639 Respondent: Legal/J.H. Byron


Page: 1 of 1

Question: Please provide the total annual MWH and total cost of power purchased, excluding QFand PA 2 power for the years 1999 and 2000 actual and 2001 projected.

Objection: The Detroit Edison Company objects to providing the total annual MWH and total costof power purchased for 2001 projected for the reasons that the request is overly broad,seeks excessive detail, is not reasonably calculated to lead to the discovery ofadmissible evidence and seeks trade secrets and/or other confidential research anddevelopment and/or other confidential commercial and proprietary information.

The Commission determined in MPSC Case No. U-11130 that executed wholesalepower purchase agreements contain confidential information. As a result, theCommission limited disclosure of the confidential portions to the MPSC Staff only inorder to “strike a proper balance between the public interest in disclosure and theprotection of commercially sensitive information in a competitive environment.” MPSCCase No. U-11130, Order dated October 20, 1997 p. 13; Accord, PSC Case No. U-11631, Order dated April 14, 1998; MPSC Case No. 11804 Order dated December 21,1998; MPSC Case No. 11688 Order dated June 26, 1998; MPSC Case No. U-11661Order dated June 26, 1998. Detroit Edison’s total annual MWH and total cost of powerpurchases for 2001 projected also contain confidential, commercially sensitiveinformation.



See also, attached Affidavit of James H. Byron.

Answer: Total annual MWH and total cost of power purchased for 1999 are contained in theCompany’s testimony and exhibits filed in MPSC Case No. U-11800-R. EnergyMichigan was served a copy of this material on/or about March 31, 2000.

Total annual MWH and total cost of power purchased for 2000 will be provided inMPSC Form P-521 which will be provided when it becomes available.

MPSC Case No.: U-12639 Respondent: Legal/A.F. Colandrea


Page: 1 of 1

Question: Please provide the actual peak demand for the years 1997 through 2000 and projectedpeak demand for the years 2001 through 2007, with open access service and withoutopen access service.

Objection: The Detroit Edison Company objects to providing the actual peak demand for the years1997 through 2000 and projected peak demand for the years 2001 through 2007, withopen access service and without open access service for the reasons that the requestis overly broad, seeks excessive detail, is not reasonably calculated to lead to thediscovery of admissible evidence and seeks trade secrets and/or other confidentialresearch and development and/or other confidential commercial and proprietaryinformation.

The Commission determined in MPSC Case No. U-11130 that executed wholesalepower purchase agreements contain confidential information. As a result, theCommission limited disclosure of the confidential portions to the MPSC Staff only inorder to “strike a proper balance between the public interest in disclosure and theprotection of commercially sensitive information in a competitive environment.” MPSCCase No. U-11130, Order dated October 20, 1997 p. 13; Accord, PSC Case No. U-11631, Order dated April 14, 1998; MPSC Case No. 11804 Order dated December 21,1998; MPSC Case No. 11688 Order dated June 26, 1998; MPSC Case No. U-11661Order dated June 26, 1998. Detroit Edison’s actual peak demand for the years 1997through 2000 and projected peak demand for the years 2001 through 2007, with openaccess service and without open access service. also contains confidential,commercially sensitive information.



See also, attached Affidavit of Aldo F. Colandrea.

1

STATE OF MICHIGAN


In the Matter, on the Commission's )own motion, to implement the )provisions of Section 10a(10) ) MPSC Case No. U-12639of 2000 PA 141. )____________ __________________)

AFFIDAVIT OF JAMES H. BYRON

STATE OF MICHIGAN ))SS.

COUNTY OF WAYNE )

JAMES H. BYRON, being first duly sworn, deposes and says:

1. I am the Director of Generation Optimization for The Detroit Edison Company.

2. As Director of Generation Optimization, I am responsible for the negotiation,

development and administration of interconnection operating agreements with other utility

systems. In addition, I supervise the purchasing and selling of weekly and seasonal power from

interconnection transactions and the forecasting of purchase power and system operation.

3. Given the competitive environment in today’s power markets the Company would

be at a serious competitive disadvantage if it were to disclose to its competitors the details behind

its electricity costs. Under FERC Orders 888 and 889 the Company is already facing competition

in the wholesale markets and has split its wholesale power merchant functions from its

transmission activities. For example, Detroit Edison has physically segregated the offices of its

merchant employees and its transmission employees in its downtown Detroit headquarters. All of

these employees were required to sign a “Code of Conduct” prohibiting them from using non-

public transmission and cost information to obtain a competitive advantage vis-à-vis other

market participants.

2

4. In March of 1995, a retail load aggregator announced it would open an office in

the Detroit area. The following April, a power marketer requested Department of Energy (DOE)

approval for an export license to market electricity in Canada. Now there are numerous power

marketers, some which are affiliates of larger utilities, that have offices in Michigan and are

actively marketing their products. Electricity marketers and generators such as Exelon Energy,

CMS MS&T, CMS MS&T Michigan, Nordic Electric, Quest and others have expressed interest

in providing retail and wholesale electric services in Michigan and have begun establishing

business and customers in the region.

5. Detailed information contained in historical records, Promod summary reports,

wholesale power contracts, Company forecasts of wholesale market prices, generation and

associated costs, electric supply acquisition and generation strategies, generating unit

availability, average heat rates, scheduled maintenance, unit capacity factors, fuel cost and

consumption data and expected power purchases used to determine projected costs that serve

customer load, for example, provides information on the Company’s average marginal cost to

serve these customers and is especially sensitive in relation to “at risk” load when doing business

in a competitive marketplace. In addition, this highly sensitive data may also be used by power

marketers, power brokers, independent power producers and other IOU’s in a competitive market

to drive the company’s system costs higher and compete with the Company’s interconnection

power sales.

6. Furthermore, Detroit Edison has dedicated significant resources to developing the

technology and expertise to blend coal at its generating facilities. Knowledge of the Company’s

specific (not average) unit and plant coal blends would allow competing power providers to more

accurately predict Detroit Edison costs and allow competitor’s to undercut Detroit Edison

electric sales. In 1995 Detroit Edison was consulted to lower the fuel costs of a nearby utility’s

generating plant. This utility offered to compensate Detroit Edison for sharing its expertise in

burning low sulfur western coal in order to realize a reduction in fuel expense more quickly.

7 . More and more frequently informational services such as Power Market Weekly,

Dow Jones Telerate System, Bloomberg Financial Data and others (including power marketers

and other utilities) contact the Company seeking specific information concerning Detroit

Edison’s power purchases and sales, production costs and other competitive data. Industry

practice with respect to disclosing such information has changed drastically in the last few years,

such that it is no longer shared by utilities. Detroit Edison, and -Generation Optimization in

particular, has followed that practice and declined to reveal specific cost data.

Further, Affiant sayeth not.

Dated: March 26, 2001

Signed and sworn to before me

1

STATE OF MICHIGAN


In the Matter, on the Commission's )own motion, to implement the )provisions of Section 10a(10) ) MPSC Case No. U-12639of 2000 PA 141. )____________ __________________)

AFFIDAVIT OF ALDO COLANDREA

STATE OF MICHIGAN )) SS.

COUNTY OF WAYNE )

ALDO COLANDREA, being first duly sworn, deposes and says:

1. I am the Director of Corporate Forecasting for The Detroit Edison Company.

2. As Director of Corporate Forecasting, I am responsible for, among other things,

forecasting Detroit Edison customer loads, as influenced by factors such as the local economic

outlook, retail access market losses and gains, load growth and numerous other relevant factors..

3. Given the increasingly competitive environment in today’s retail power markets

and the increasing presence of merger and acquisition activity in the industry, the Company

would be at a serious competitive disadvantage if it were to disclose to its competitors the details

behind its future load projections.

4. Future load projections are not based solely on the same criteria used in earlier

projections, such as economic growth and demography, but would require additional forecasts

and/or assumptions on market clearing price, rate structure, marketing, generation and

transmission strategies.

5. Industry practice with respect to disclosing load projection information has

changed drastically in the last few years, such that it is no longer shared by utilities. Detroit

Edison has followed that practice and declined to reveal specific load projection data, unless

required.

Further, Affiant sayeth not.

Dated: March 26, 200l

Exhibit BConsisting of: Opinion and Order Dated October 20, 1997 in MPSCCase No. U-11130.

Exhibit 1

S T A T E O F M I C H I G A N


* * * * *

In the matter of the application of )NORDIC ELECTRIC, L.L.C., for a certificate )of public convenience and necessity to serve ) Case No. U-11130retail wheeling customers in the electric service )territory of Consumers Energy Company. ) )

At the October 20, 1997 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. John G. Strand, ChairmanHon. John C. Shea, CommissionerHon. David A. Svanda, Commissioner

OPINION AND ORDER

History of Proceedings

On July 2, 1997, Nordic Electric, L.L.C., (Nordic) filed an application for a certificate of

public convenience and necessity to supply power to customers in the electric service territory of

Consumers Energy Company (Consumers), pursuant to 1929 PA 69, as amended, MCL 460.501 et

seq.; MSA 22.141 et seq., (Act 69). The application states that Nordic is a power marketer that has

signed contracts with a number of retail customers located in Consumers’ service territory. The

contracts call for Nordic to sell unbundled generation services to the customers, using Consumers’

transmission and distribution facilities to deliver energy to them under Consumers’ Rate DA, as

approved in the November 14, 1996 order in Cases Nos. U-10685, U-10754, and U-10787 (Case

1Nordic’s application for approval of the contracts is pending in Case No. U-11129.

2For purposes of Act 69, “municipality” means “a city, village or township.” MCL 460.501;MSA 22.141.

3Nordic’s application made an alternative request for a declaratory ruling that it is not requiredto obtain an Act 69 certificate to provide the type of service it described. Because Nordic has notbriefed this position, it is deemed to be abandoned for purposes of deciding this case. In any event,the Commission has already stated that a provider of unbundled generation services must secureAct 69 approval. See the November 14, 1996 order in Case No. U-10685 et al. at 82-83 & n.44.

Page 2U-11130

No. U-10685 et al.).1 Nordic’s application requested a blanket Act 69 certificate authorizing it to

serve the customers and the cities, villages, and townships (municipalities2) where the customers

are located. Nordic further represented that it had secured, or was in the process of obtaining,

franchises from those municipalities.3 Attached to the application were copies of franchises

granted to Nordic.

From July 16 through October 24, 1996, Nordic filed five supplements to its application. Each

supplement identified additional Nordic customers and municipalities and requested that the

certification sought in its application be expanded accordingly. On December 10, 1996, Nordic

filed a revised application that summarized its previous applications.

Pursuant to a notice of hearing, Administrative Law Judge Theodora M. Mace (ALJ) con-

ducted a prehearing conference on December 12, 1996 and granted leave to intervene to Consum-

ers, The Detroit Edison Company (Detroit Edison), and Attorney General Frank J. Kelley. The

Commission Staff (Staff) also participated.

In the April 10, 1997 order on rehearing in Case No. U-10685 et al., the Commission

addressed how available Rate DA capacity would be allocated among customers if there was more

demand for the capacity than authorized in the November 14, 1996 order. The Commission held

that, of the 100 megawatts (MW) reserved exclusively for Rate DA, priority should be assigned on

the basis of the earliest date of filing for each prospective customer and that the priority between

4Under the framework created by the orders in Case No. U-10685 et al., the participation of thecustomers within the 140 MW block is contingent on either the failure of some of the individualcontracts filed by Consumers to reserve that capacity or the failure of some of the customers in thefirst 100 MW block to meet the requirements of Rate DA.

Page 3U-11130

two or more applications filed on the same day should be settled by lottery. The Commission

further held that if any of the 140 MW block reserved for competition between Rate DA and

Consumers’ special contract service was not met by Consumers’ own contracts, priority would be

determined through the lottery. Because customer applications for more than 240 MW of capacity

were filed on the first available day, the April 10, 1997 order effectively allocated all available

Rate DA capacity through the lottery.

On April 25, 1997, Consumers conducted the lottery. As a result, four of Nordic’s customers

attained a priority within the 100 MW reserved for Rate DA, and five others fell entirely or

partially within the next 140 MW.4 Nordic identified these nine customers as follows:

Page 4U-11130

Customer LoadRank of Priority in Lottery/ Preceding kW

Status of Franchise

First 100 MW:

Martin Marietta 9,900 kW 3rd/ 7,322 kW Granted by Stronach Twp.

Georgia Pacific 10,800 kW 5th/ 23,522 kW Granted by City of Gaylord

Keeler Brass 2,700 kW 7th/ 40,370 kW Granted by City of Grand Rapids

Keebler Co. 5,200 kW 15th/ 92,558 kW Granted by City of Grand Rapids

Next 140 MW:

Extruded Metals 5,100 kW 28th/196,928 kW Granted by City of Belding

Lacks Industries 5,700 kW 29th/202,028 kW Granted by City of Kentwood

Waldorf Corp. 7,500 kW 30th/207,728 kW Granted by City of Battle Creek

East Jordan Iron Works 7,800 kW 33rd/226,018 kW Granted by City of East Jordan

Steelcase 27,700 kW 35th/238,518 kW Granted by City of Grand Rapids

Exs. A-1, A-2, A-4, I-14. Other Nordic customers attained lesser priorities. Twenty-one Nordic

customers with 30 locations participated in the lottery, which assigned Rate DA priorities for a

total of 127 customer locations representing almost 975 MW of load. Ex. I-14.

An evidentiary hearing was conducted in this case on July 16, 1997. John A. Baardson,

Nordic’s principal owner and managing member, testified regarding Nordic’s proposed services

to Rate DA customers. Donald E. Gruenemeyer, an engineering consultant retained by Nordic,

described Nordic’s arrangements to supply power and discussed the reliability of those arrange-

ments. Consumers witness Ronn J. Rasmussen and Staff witness John A. Abramson set forth

those parties’ positions on Nordic’s Act 69 application.

Page 5U-11130

Because the Commission indicated that it would read the record, the ALJ did not prepare a

proposal for decision. On September 17, 1997, Nordic, Consumers, Detroit Edison, and the

Staff filed briefs. On or before October 3, 1997, the same parties filed reply briefs.

Act 69 Certification

In its brief, Nordic contends that the direct access program advances the public interest by

facilitating competition through customer choice. Referring to the Commission’s observation

that “a third-party supplier’s application for Act 69 approval involves a much narrower range of

issues than a typical Act 69 proceeding,” November 14, 1996 order in Case No. U-10685 et al.

at 82, Nordic suggests that the Commission should be flexible in applying Act 69. Nordic

emphasizes that Rate DA is a five-year experimental program.

Nordic contends that its application meets the following criteria set forth in Section 5 of

Act 69:

In determining the question of public convenience and necessity the commission shalltake into consideration the service being rendered by the utility then serving suchterritory, the investment in such utility, the benefit, if any, to the public in the matter ofrates and such other matters as shall be proper and equitable in determining whether ornot public convenience and necessity requires the applying utility to serve the territory.

MCL 460.505; MSA 22.145. Nordic says that because its service under Rate DA relies

exclusively on Consumers’ transmission and distribution facilities to deliver the energy, there is

no possibility of a needless or wasteful duplication of Consumers’ investment in facilities to

serve those customers. Nordic observes that Rate DA compensates Consumers for the use of its

facilities and that Consumers’ assent to the settlement giving rise to Rate DA eliminates any

valid objection on its part to the Act 69 application. Nordic further argues that “the benefit, if

any, to the public in the matter of rates” is that increased competition will lower rates. Id. As

for equitable considerations weighing in favor of Act 69 certification, Nordic says that its service

Page 6U-11130

will be limited to customers qualifying under Rate DA, it has secured a reliable power supply by

signing a 400 MW power purchase agreement with Cinergy Services, Inc., (Cinergy), and its

participation will enhance the likelihood of the Rate DA program’s success in promoting

customer choice and competition. Nordic adds that, at least initially, the customers will be large,

sophisticated commercial or industrial entities that are well equipped to make the choices

permitted by Rate DA.

In its initial brief, Nordic requests an Act 69 certificate covering all customers in municipali-

ties for which Nordic currently holds franchises as well as those for which it will obtain

franchises in the future. Nordic says that it had signed contracts with 23 customers at the time of

the hearing in this case, that it has since signed a contract with another customer, that it

anticipates signing more contracts, and that it already holds, or is in the process of obtaining, a

franchise for each municipality where its customers are located. Nordic says that the Commis-

sion should not require it to file a new application each time that it signs a new customer to a

contract. Nordic proposes that, in addition to Rate DA, the certificate issued in this case would

apply to similar rates or retail wheeling programs that the Commission may approve in the

future.

Consumers objects to a grant of Act 69 authority that would be more extensive than

Nordic’s right to participate in the Rate DA program. Consumers urges that the certificate

should be limited to Nordic’s sales to eligible Rate DA customers, which would include, at a

minimum, the four customers in the first 100 MW block of available capacity and, at most, the

nine customers within the expanded 240 MW (if the available Rate DA capacity increases by

another 140 MW). Consumers says that there are currently no other retail access programs and

that Nordic should not be authorized to provide service for any future programs, which may have

different requirements and standards. Consumers says that duplication, waste, and stranded

Page 7U-11130

costs do not present significant issues in the context of the Rate DA program, which is subject to

capacity and durational limits, but that those concerns would be different if Nordic were

authorized to serve customers outside of Rate DA. Consumers also proposes that any certificate

issued to Nordic should be limited to the provision of unbundled electric supply service and

should restrict Nordic from constructing any facilities in the areas to be served.

Consumers contends that a blanket certificate extending to future service not covered by

existing franchises would violate Act 69. In this regard, Consumers cites Section 3 of Act 69,

which requires an applicant to file a petition “stating the name of the municipality or municipali-

ties which it desires to serve . . . and that the applicant has secured the necessary consent or

franchise from such municipality or municipalities authorizing it to transact a local business.”

MCL 460.503; MSA 22.143. Consumers further cites the requirement in Section 5 that the

certificate “describe in detail the territory in which said applicant shall operate.” MCL 460.505;

MSA 22.145. Consumers says that these provisions do not permit the Commission to issue a

certificate covering unidentified customers located in unidentified municipalities participating in

potential future programs.

Consumers also argues that a certificate should be conditioned upon all aspects of Nordic’s

compliance with the requirements of the Rate DA program. In Consumers’ view, these

requirements include reciprocity, full disclosure of Nordic’s sales agreement with its Rate DA

customers, full disclosure of Nordic’s power purchase agreement with Cinergy, and a showing of

Nordic’s financial and operational ability to provide reliable power.

Detroit Edison says that Nordic should be granted an Act 69 certificate only for municipali-

ties in which it has eligible Rate DA customers. According to Detroit Edison, of the 21

municipalities for which Nordic seeks certification, only the three with customers in the first

100 MW clearly qualify -- Stronach Township, Gaylord, and Grand Rapids. Detroit Edison says

Page 8U-11130

that it would be appropriate to grant a certificate for the municipalities associated with customers

in the next 140 MW only if Nordic can show that it has binding contracts with the customers and

is entitled to provide service under the Rate DA program. However, Detroit Edison continues,

the Commission should not grant authority for municipalities in which Nordic’s present ability

to provide service is speculative. With respect to the customers lacking a lottery priority within

the first 240 MW, Detroit Edison says that Nordic has no colorable basis for claiming authority

to serve them and that its application should be rejected for those municipalities.

The Staff supports a grant of Act 69 authority for Nordic’s service within the first 100 MW

of the Rate DA lottery. It reasons that Nordic met the statutory criteria for those customers

because the Commission’s approval of the settlement in Case No. U-10685 et al. supplies the

requisite finding that Rate DA is in the public interest. However, the Staff opposes Nordic’s

request for a blanket certificate covering indeterminate future customers. Instead, the Staff

proposes a summary procedure that would allow Nordic to file supplemental applications to add

new Rate DA customers to its original certificate (including those currently outside of the first

100 MW of priority). The Staff proposes a detailed listing of the information that should appear

in a supplemental application. The Staff anticipates that, if a supplemental application complies

with Act 69 and meets all other legal requirements, the Commission would approve an amend-

ment to the certificate without conducting a contested case hearing. The Staff believes that this

approach would minimize regulatory burdens associated with Act 69.

Given the limitations of the Rate DA program, the Staff urges the Commission to impose

several restrictions on Act 69 certificates. First, the Staff proposes that the authorization

conferred by a certificate should be limited to the customers that have signed contracts with

Nordic and are eligible to take service under Rate DA. In the Staff’s view, Nordic should not be

5The Staff also says that Nordic’s service should be limited to the municipality or area identifiedin the franchise. This requirement is part of Act 69. MCL 460.505; MSA 22.145.

Page 9U-11130

authorized to serve additional customers simply because Nordic has already obtained a certifi-

cate for another customer located in the same municipality.5

Second, the Staff proposes to restrict Nordic’s services to those permitted a participating

third-party provider in the Rate DA program. The Staff opposes Nordic’s suggestion that the

authorization be extended to any renewal of the Rate DA program or any similar retail wheeling

program authorized by the Commission. The Staff suggests that if a similar program should be

instituted in the future, Nordic could file a supplemental application for an amendment to its

Act 69 certificate.

Third, the Staff says, the certificate should indicate that the type of service being authorized

is the supply of unbundled power over Consumers’ transmission and distribution system. The

Staff proposes to preclude Nordic from constructing its own duplicate facilities (except for

metering equipment), unless Nordic first obtains an amendment to its certificate.

Fourth, the Staff proposes that issuance of the certificate be contingent upon Nordic’s

providing documentation that it has the technical, financial, and organizational capability to

provide the service, that it has obtained all required regulatory licenses and approvals, and that it

will continue to comply with the Commission’s requirements regarding the disclosure and

reporting of information.

In reply, Nordic accepts most of the Staff’s proposed restrictions. Nordic says that the

Commission should approve the Staff’s proposed supplemental application process to add new

customers as they become eligible for Rate DA. Although Nordic continues to oppose full

disclosure of the pricing provisions of its power sales contracts with Rate DA customers and its

power purchase contract with Cinergy, it says that, if ordered to do so by the Commission, it

Page 10U-11130

would disclose the Rate DA contracts on a public basis and is willing to disclose the Cinergy

agreement to the Staff under the condition that it be treated as confidential.

Consumers also agrees that the Staff’s proposed supplemental application process would be

a valid means of expediting future certifications, although Consumers adds that amending a

certificate would require full compliance with Act 69 and all other legal criteria.

The Commission finds that Nordic has met the criteria for obtaining a certificate pursuant to

Section 5 of Act 69. As suggested by both Nordic and the Staff, the Commission’s prior

findings in Case No. U-10685 et al. establish that Rate DA is an appropriate means of facilitating

customer choice through direct access and is therefore in the public interest. Nordic has met

concerns regarding the potential duplication of transmission and distribution facilities by

offering to provide only unbundled power supply services in the context of Rate DA. Any

concerns regarding stranded costs have been adequately considered in Case No. U-10685 et al.

and will be addressed by the Commission as necessary in other dockets and future cases. Nordic

has made an adequate showing of its willingness and ability to serve as a power supplier to

eligible Rate DA customers.

Act 69 vests the Commission with discretion to guide the development of competition in

keeping with the public interest. As the parties all acknowledge, there is little point in exercising

this discretion by erecting a regulatory hurdle for potential power suppliers seeking to participate

in Rate DA. An unduly stringent approach would not serve the purposes of Act 69 and would be

contrary to the competitive policies underlying Rate DA. Although the Commission agrees with

the parties that some restrictions are necessary to ensure that the Rate DA program is consistent

with the Commission’s objectives, the Commission also agrees that it should not unnecessarily

inhibit third-party providers’ latitude to compete in an emerging market.

6As shown in Exhibit A-2, those municipalities are Ada Township, the City of Albion, AllendaleTownship, the City of Battle Creek, Beaver Creek Township, the City of Belding, CharlevoixTownship, the City of East Jordan, the City of Gaylord, Kalamazoo Township, the City ofKentwood, the City of Ludington, the City of Parchment, the Village of Sparta, Stronach Township,the City of Wyoming, and the City of Grand Rapids. The certificate does not authorize service toLakehead Pipe Line Company, Inc., or other customers in areas for which franchises were notpreviously obtained. If, however, the current status of the franchises for those customers is similarto those for whom certificates have been granted in this case, the Commission does not anticipatethat obtaining an Act 69 certificate would be difficult or time-consuming.

Page 11U-11130

To promote flexibility in applying Act 69, the Commission will issue Nordic a certificate to

supply unbundled power in all of the municipalities that were named in its application, as

revised, and for which it had already secured franchises.6 Although there is some question

regarding how the outcome of the lottery may affect various customers’ abilities to participate in

Rate DA, the Commission does not see any advantage in evaluating these contingencies as part

of an Act 69 determination. Instead, it finds that Act 69 should not become a regulatory hurdle

for customers and suppliers that have made credible arrangements to participate in Rate DA.

Whether or not those arrangements actually result in power being supplied by the third-party

provider to the customer depends on the customer’s lottery priority as well as other contingen-

cies that cannot be evaluated at this time and, in any event, are not directly relevant to Act 69.

The Commission further finds that the Act 69 certificate granted to Nordic need not restrict

the service to specific customers. Act 69 instead requires the Commission to issue a certificate

that “describe[s] in detail the territory in which said applicant shall operate.” MCL 460.505;

MSA 22.145. If Nordic acquires a Rate DA customer in an area in which it already holds an

Act 69 certificate (as a result of service to another customer within the franchise area), no

purpose would be served by obligating Nordic to apply for another certificate. The efficiencies

gained by granting certificates covering a municipality or other specified area can be seen from

the instances of multiple Nordic customers located within a single municipality. Two of

7Rate DA is specifically limited to 100 MW, although it could be potentially higher (as much as140 MW more), depending upon the applicability of the individual contracts filed by Consumers in

Page 12U-11130

Nordic’s customers within the first 100 MW of priority are located in Grand Rapids and are

covered by the same franchise. In the Commission’s view, no valid reason has been advanced to

justify imposing a condition on the certificate that would limit Nordic to a specific customer or

customers.

The Commission agrees with Consumers and the Staff that Nordic’s operations under its

certificate should be limited to the provision of unbundled generation services over Consumers’

transmission and distribution facilities. Furthermore, Nordic should be precluded from

constructing its own facilities for delivering energy to its Rate DA customers (except for meters

and telemetry equipment). In the Commission’s view, providing a facilities-based distribution

service is not “the kind of service which [Nordic] proposes to render” in this application.

MCL 460.503; MSA 22.143. A facilities-based service would raise concerns regarding

duplication that are not present in an application to provide unbundled generation services and

would require a fundamentally different level of review under Act 69. By limiting Nordic’s

operations to non-facilities-based service, any concerns regarding duplication of facilities should

be eliminated. If Nordic at some point wishes to provide a facilities-based service, it must file

an Act 69 application describing this type of service.

However, the Commission does not agree that Nordic’s Act 69 authorization should be

limited to the Rate DA program. A certificate to provide unbundled generation services may

apply to a renewal of the Rate DA program (in its current form or with modified parameters) or

to future retail wheeling or retail open access programs. It is difficult to predict at this time if or

how those programs might be implemented, but it certainly appears that implementation will be

limited for at least several years.7 If, in the future, questions arise as to whether a proposed

Case No. U-10685 et al. In addition, the Commission has approved a restructuring plan forMichigan’s electric utilities. In its June 5, 1997 order in Case No. U-11290, the Commissionspecifically limited direct access loads to amounts that increase annually by about 2½% of eachutility’s total retail load, which equates to annual incremental increases of 150 MW for Consumers’customers and 225 MW for Detroit Edison’s customers until the year 2002.

Page 13U-11130

program is “the kind of service which [Nordic] proposes to render” in applying for the certificate

in this case, the Commission will then be in a position to determine whether Nordic’s participa-

tion would be authorized by its existing certificate or whether it would be required to seek a new

certificate.

Other proposed restrictions are outlined in Exhibit 1 of Nordic’s reply brief. Except for

those restrictions that are inconsistent with the discussion in this order, the Commission accepts

those restrictions. The Commission specifically adopts the disclosure provisions in Exhibit 1,

which provide for full public disclosure of Nordic’s contracts with Rate DA customers and

limited disclosure to the Staff of the confidential portions of Nordic’s power purchase agreement

with Cinergy. The Commission finds that these provisions strike a proper balance between the

public interest in disclosure and the protection of commercially sensitive information in a

competitive environment.

The Commission also adopts Nordic’s commitment to comply with information disclosure

and reporting requirements. The Commission further finds that the supplemental application

process proposed by the Staff and summarized in Exhibit 1 is acceptable. However, it cautions

the parties that the procedural requirements of Act 69 must be observed.

Reciprocity

In the April 10, 1997 order in Case No. U-10685 et al. at 11-13, the Commission denied

rehearing with respect to its determinations in the November 14, 1996 order supra at 89-91,

Page 14U-11130

regarding reciprocity. In that order, the Commission held that an electric utility should make a

comparable amount of its native load open to competition from Consumers if the utility or its

affiliate chose to become a supplier of unbundled power to Consumers’ Rate DA customers.

The order also observed that power marketers would not be subject to the reciprocity provision,

even though they are eligible third-party providers, unless they are also affiliates of an electric

utility serving a native load. Order at 91 & n.49. In denying rehearing of the reciprocity

provision, the Commission stated:

Energy Michigan and Nordic [Power] argue that the Commission must define the term“affiliate” to ensure that suppliers providing service through power marketers are notsubjected to the reciprocity requirement unless they fall within a clearly definedcategory of relationships to the marketer.

The Commission concludes that this issue is better addressed in a context where theunderlying facts may be developed, such as in the contested case proceeding in whichthe marketer seeks a certificate of public convenience and necessity or seeks approval ofits contracts.

April 10, 1997 order in Case No. U-10685 et al. at 13.

Consumers raises the argument that Nordic and its supplier of power, Cinergy, are affiliated,

such that Cinergy’s retail utilities must make a comparable portion of their load (located in

Indiana, Ohio, and Kentucky) available for Consumers to serve in a retail wheeling program.

Consumers further contends that the Commission should withhold issuance of an Act 69

certificate until Nordic and Cinergy comply with their reciprocity obligations.

To show an affiliation between Nordic and Cinergy, Consumers relies on the following

aspects of their relationship. Nordic and Cinergy have entered into a contractual relationship in

which they agree that Cinergy will be Nordic’s exclusive supplier of power. Reports in the

media have indicated that Cinergy views its alliance with Nordic as an opportunity to sell low

cost power and energy services in retail markets in Michigan. Cinergy has extended short-term

financing to Nordic, has entered into an escrow agreement with Nordic for the receipt of

Page 15U-11130

payments from Nordic’s customers, and has made financial guarantees to hold Nordic’s

customers harmless for the cost of replacement power in the event that Cinergy fails to make

scheduled power deliveries. According to Consumers, Nordic and Cinergy are also exploring a

long-term financial arrangement.

Nordic argues that Consumers has failed to present a basis for showing affiliation. Nordic

argues that, in general, the concept of affiliation requires some showing of shared ownership or

control, which are missing here. According to Nordic, neither Cinergy nor any of its officers

hold any equity interest in Nordic, and Cinergy lacks the ability to control or manage Nordic’s

operations. Nordic says that its principal, Mr. Baardson, has had an independent presence in the

alternative power field for over a decade. Nordic explains that it chose Cinergy as its exclusive

supplier because a single source of power would be more reliable than if it aggregated power

from a number of sources. Nordic contends that its dealings with Cinergy have been at arm’s

length.

The record fails to show that Nordic is an affiliate of Cinergy. Nordic and Cinergy are not

subject to the same ownership and do not have common or overlapping equity structures. Their

contractual relationship appears to have resulted from arm’s-length bargaining and does not

suggest a significant degree of shared or common control on the part of either entity.

The Commission FINDS that:

a. Jurisdiction is pursuant to 1929 PA 69, as amended, MCL 460.501 et seq.; MSA 22.141

et seq.; 1909 PA 106, as amended, MCL 460.551 et seq.; MSA 22.151 et seq.; 1919 PA 419, as

amended, MCL 460.51 et seq.; MSA 22.1 et seq.; 1939 PA 3, as amended, MCL 460.1 et seq.;

MSA 22.13(1) et seq.; 1969 PA 306, as amended, MCL 24.201 et seq.; MSA 3.560(101) et seq.;

Page 16U-11130

and the Commission's Rules of Practice and Procedure, as amended, 1992 AACS, R 460.17101

et seq.

b. Nordic should be granted an Act 69 certificate to provide unbundled electric generation

services in the municipalities identified in Exhibit A-2, subject to the restriction that it may not

construct, own, or operate transmission or distribution facilities for the delivery of energy in

those municipalities and subject to the other restrictions set forth in this order.

THEREFORE, IT IS ORDERED that Nordic Electric, L.L.C., is granted a certificate of

public convenience and necessity pursuant to 1929 PA 69, as amended, to provide unbundled

electric generation services in Ada Township, the City of Albion, Allendale Township, the City

of Battle Creek, Beaver Creek Township, the City of Belding, Charlevoix Township, the City of

East Jordan, the City of Gaylord, the City of Grand Rapids, Kalamazoo Township, the City of

Kentwood, the City of Ludington, the City of Parchment, the Village of Sparta, Stronach

Township, and the City of Wyoming, subject to the restriction that it may not construct, own, or

operate transmission or distribution facilities for the delivery of energy in those cities, villages,

or townships and subject to the other restrictions set forth in this order.

The Commission reserves jurisdiction and may issue further orders as necessary.

Any party desiring to appeal this order must do so in the appropriate court within 30 days

after issuance and notice of this order, pursuant to MCL 462.26; MSA 22.45.

MICHIGAN PUBLIC SERVICE COMMISSION

/s/ John G. Strand Chairman

( S E A L )

Page 17U-11130

/s/ John C. Shea Commissioner, concurring and dissenting in aseparate opinion.

/s/ David A. Svanda Commissioner

By its action of October 20, 1997.

/s/ Dorothy Wideman Its Executive Secretary

Page 18U-11130

The Commission reserves jurisdiction and may issue further orders as necessary.

Any party desiring to appeal this order must do so in the appropriate court within 30 days

after issuance and notice of this order, pursuant to MCL 462.26; MSA 22.45.


Chairman

Commissioner, concurring and dissenting in aseparate opinion.

Commissioner

By its action of October 20, 1997.

Its Executive Secretary

In the matter of the application of )NORDIC ELECTRIC, L.L.C., for a certificate )of public convenience and necessity to serve ) Case No. U-11130retail wheeling customers in the electric service )territory of Consumers Energy Company. ) )

Suggested Minute:

“Adopt and issue order dated October 20, 1997 granting NordicElectric, L.L.C., a certificate of public convenience and necessityto provide unbundled electric generation services in the cities,villages, and townships for which it has obtained franchises, as setforth in this order.”

Page 20U-11130

S T A T E O F M I C H I G A N


* * * * *

In the matter of the application of )NORDIC ELECTRIC, L.L.C., for a certificate )of pubic convenience and necessity to serve ) Case No. U-11130retail wheeling customers in the electric service )territory of Consumers Energy Company. ) )

CONCURRING AND DISSENTING OPINION OF COMMISSIONER JOHN C. SHEA

(Submitted on October 20, 1997 concerning order issued on same date.)

I concur with the majority that the Nordic Electric, L.L.C. (the “Applicant”) should be

granted a certificate of convenience and necessity pursuant to 1929 PA 69; MCL 460.501 et

seq.; MSA 22.141 et seq. (“Act 69"). However, I would impose the restrictions and limitations

proposed by the MPSC Staff in this case which, in my view, are consistent with longstanding

interpretations of Act 69 both by this commission and by the appellate courts in Michigan.

Even if inconvenient, the requirements of Act 69 must be observed by this Commission until

and unless the Michigan Legislature repeals or revises it. For the last forty years, Act 69 has been

understood as a barrier to the entry of more than one utility service provider into a particular

market, not as a means to incent competition:

“The requirement of a certificate of convenience and necessitymay enable the commission to prevent the needless multiplicationof companies serving the same territory, and at the same time toavoid a wasteful duplication of capital facilities, thus keeping theinvestment at the lowest figure consonant with satisfactory service. By protecting the utility from unnecessary competition, the risksinherent in utility investments are reduced and the cost of capital is

8In the August 30, 1990 order, the Commission declined to address whether the Act 69 certificateapplied for should be extended to all customers in the service territory of the preexisting utilitybecause “it is unclear which of the customers encompassed by . . . the complaint are in the sameposition as [the customer which the Applicant sought authority to serve].” Id. at 10. Similarprudential concerns should counsel the majority today to limit the certificate in this case to therequesting customers only.

Page 21U-11130

thereby kept as low as the conditions of the investment marketpermit.”

Huron Portland Cement Company v Public Service Commission, 351 Mich 255, 267-268; 88

NW2d 492 (1958). More recently, the Michigan Court of Appeals has stated: “Act 69 was

enacted to prevent duplication of facilities and the waste inherent in situations in which a public

utility seeks to serve another utility’s existing customer.” Marshall v Consumers Power

Company, 206 Mich App 666, 678; 523 NW2d 483 (1994). The Commission itself has adopted a

broad view of Act 69. See, e.g., August 30, 1990 Order in MPSC Case No. U-9561, the subject

of the appeal in Marshall, supra [”It is [the] unnecessary duplication of facilities, [sic] that Act 69

was intended to preclude.” Id. at 8.8

The MPSC Staff approach would, I believe, satisfy the Commission’s obligations under Act

69 while permitting the Rate DA experiment to go forward over a level playing field.

For these reasons, I would grant the Applicant an Act 69 certificate subject to the limitations

proposed by the MPSC Staff.


John C. Shea, Commissioner

EXHIBIT 1

1 Certificate of Public Convenience and Necessity. Nordic Electric shall be granted a certificate (“Act 69 Certificate”) to supply electric service to customers under the current Rate DA program. The certificate shall be limited to and apply only to customers eligible and qualified for the Rate DA program. For Nordic Electric, those customers currently are:

Martin-Marietta Magnesia Spec., Manistee Georgia-Pacific Corp., Gaylord Particleboard Div., Gaylord Keeler Brass Co., Grand Rapids Keebler Company, Grand Rapids.

2 . Amendment of Act 69 Certificate. If other Nordic Electric customers become eligible and qualified via additional customers in the first 100 MW block electing to be served by , Nordic Electric, or via expansion of the Rate DA program to customers in the next 140 MW block, or by Commission Order expanding the Rate DA program, then Nordic shall file a supplemental application in Case No. U-11130 for an amendment to the Act 69 certificate to serve additional, specific customers at the time they become eligible customers under Rate DA and serve the same on the parties of record and persons entitled to notice pursuant to Act 69. Any party objecting to the supplemental application shall file its objections within fourteen (14) days of service of the supplemental application by first-class mail.

3 . Contents of Supplemental Application for Amendment of Act 69 Certificate. Supplemental applications to amend the Act 69 Certificate shall state the following:

a. Reference to Case No. U-11130 and the date of the Commission Order in the case.

b . The name and address of the customer and municipality in which the customer is located.

c. A statement that a contract has been entered into with the customer for qualified Rate DA service.

d . A statement that a copy of the contract shall be submitted to the Commission and Commission Staff.

e. A statement that Nordic has a current franchise to serve in the municipality on file with the Commission in Case No. U-11130, or that a copy of the franchise is included in the supplemental application.

f . Notice that objections to the supplement application shall be filed within fourteen (14) days of service of the supplemental application.

4 . Limitations on Act 69 Certificate. The Act 69 certificate shall limit Nordic Electric to providing unbundled power supply service through the existing transmission and distribution system of Consumers Energy Company, except that Nordic Electric may provide such other services as may be approved by the Commission in an amended certificate.

5 l Transmission or Distribution Lines or Facilities. Nordic Electric agrees not to build, own, or operate any transmission or distribution lines or facilities for the purpose of providing Rate DA service in any of the franchise areas to be served in conjunction with Rate DA service. Provided, however, that if Nordic Electric will be the power supplier for any Rate DA transaction that requires the installation of any transmission or distribution facilities in order to effect the transaction (regardless whether those facilities will be owned or installed by the customer, by Nordic Electric, or by any other entity) such facilities shall be specified in the Nordic Electric supplemental application for Act 69 certification, so the Commission can determine the need and decide whether those facilities constitute unnecessary duplication. Nothing in this paragraph shall prohibit Nordic Electric from owning, operating or maintaining the telemetry equipment or other equipment described by Nordic Electric in its testimony or filings in Case NO. U-11130 for the purpose of serving its customers.

6 . Franchises. Nordic must obtain and provide to the Commission evidence of the local franchise secured from the municipality or township to serve each customer, covering every jurisdiction where customer facilities are to be served if more than one jurisdiction applies. The Act 69 certificate for power supply shall specifically describe the geographic area(s) to be served. The description shall not exceed the area specified in the local franchise approved by the municipality or township.

7 . Affidavit of Compliance with Rate DA. Nordic Electric shall provide an affidavit which certifies that it meets all of the requirements to act as a Supplier (Third Party Provider) in the context of the Consumers Energy Company Rate DA program approved by the Commission in Case No. U-10787 et al, and that it agrees to comply fully with all of the terms and conditions of the Rate DA program.

8 l Approval of Power Supply Contracts. Nordic Electric shall submit a full and complete copy of its power supply agreement with Cinergy for review by the Commission and the following members of the Commission Staff Director of the Electric Division. The Commission and the Staff agree that the power supply agreement is confidential and that the terms of the agreement shall not be disclosed to the public or to any party in Case U- 11130. The information in the power supply agreement shall be used by the Commission and the Staff solely for their review of Nordic Electric’s application for an Act 69 certificate in Case No. U-l1130. The Commission and the Staff agree that the power supply agreement shall be returned to Nordic Electric upon entry of an Order in Case No. U-l1130, provided that redacted copies of the power supply agreement obtained through discovery in Case No. U-I1130 may be retained.

9 . Rate DA Supplier Reporting Requirements. Nordic Electric agrees to provide all

information, reports, and filings as required by the Commission for non-traditional suppliers and/or third party suppliers who participate in the Consumers Energy Rate DA program.

Document No. 74937 ver. 1

Exhibit CConsisting of: MPSC Case No. U-12639 Energy Michigan’s Discovery Responses to

Detroit Edison’s First Discovery Request.

STATE OF MICHIGAN


**************************

In the matter, on the Commission’s own motion, ) to implement the provisions of Section 10a(10) ) of 2000 PA 141. ) Case U-12639

ENERGY MICHIGAN RESPONSES TO DETROIT EDISON COMPANY’S FIRST INTERROGATORIES

DEEM 1.1/78 Please provide the names and qualifications of all expert witnesses that Energy Michigan expects to present in its direct and in its rebuttal case in this matter.

RESPONSE:

No final decision has been made regarding expert witnesses for Energy Michigan in the direct and rebuttal cases in this matter. However, it is likely that Richard Polich will testify for Energy Michigan in one or both phases of the case. See direct testimony of Richard Polich in Case U-12489 for a list of his qualifications.

Prepared by counsel.

DEEM1.2/79 Please describe in reasonable detail, the nature of, and subject matter of, the testimony that is expected to be presented by each expert witness listed in response to Question DEEMl.1/78. Please include page number references to the Detroit Edison prefiled witness testimony in this case that the listed Energy Michigan expert witness will address, if any.

RESPONSE:

There has been no final decision regarding the subject matter, nor the page numbers of Detroit Edison prefiled testimony which will be addressed.


DEEMI.3/80 Please provide a copy (in transcript form if available) of any and all prior testimony of the expert witnesses listed in response to Question DEEM 1.1/78, from 1995 to the present, that addresses, discusses or mentions, in any way, electric utility stranded costs, the value of electric power plant(s), electric power market prices or securitization financing.

RESPONSE:

Please see the testimony referenced in the qualifications of Richard Polich in Case U- 12489 for copies of his testimony. See in particular Mr. Polich’s testimony in Cases U-12505 and U-12478 for discussion of securitization.


DEEM1.4/81 Please state the substance of the facts and opinions to which the expert witnesses listed in response to Question DEEMl.l/78 are expected to testify in this matter, including a summary of the grounds for each opinion. Please also provide any and all facts and data underlying the expected testimony of the expert witnesses listed in response to Question DEEM1.1/78.

RESPONSE:

No final decision has been made regarding the facts and opinions to which the expert witness or witnesses that are utilized by Energy Michigan are expected to testify in this matter.


STATE OF MICHIGAN


In the Matter, on the Commission’s) own motion to implement the ) provisions of Section 10a(10) ) of 2000 PA 141. )

MPSC Case No. U-12639

PROOF OF SERVICE

STATE OF MICHIGAN ) ) ss

COUNTY OF WAYNE )

DORIS J. HILL, being duly sworn deposes and says that on the 6th day of

April, 2001 she served a copy of The Detroit Edison Company’s Answer

Opposing Energy Michigan, Inc.'s Motion to Compel upon the parties listed on

the attached Service List, a copy of which is attached, by electronic mail and by

depositing properly addressed sealed and stamped envelopes into the United

States mail by first class.

Subscribed and sworn to before me this 6th day of April, 2001

Page 1 of 3MPSC Case No: U-12639

SERVICE LIST(As of March 17, 2001)

Administrative Law JudgeDaniel E. Nickerson, Jr., ALJ611 West Ottawa StreetOttawa State Office Building2nd FloorP.O. Box 30695Lansing, MI 48909-8195Phone: 517-335-2484Fax: 517-335-6696 (e-mail) [email protected]

MPSC StaffDavid Gadaleto6545 Mercantile WaySuite 15Lansing, MI 48911(517) 241-6680(517) 482-6937 (Fax) (e-mail) [email protected]

Paul CarlsonMPSC Staff6545 Mercantile WayP.O. Box 30221Lansing, MI 48909-7721

Attorney GeneralDonald E. Erickson6520 Mercantile WaySuite 2P O Box 30218Lansing, MI 48909(517) 373-1123(e-mail) [email protected]

ABATERobert A.W. Strong255 S. Old Woodward AvenueThird FloorBirmingham, MI 48009-6179(248) 988-5861(248) 642-2174 (Fax)(e-mail) [email protected]

Mr. James T. SeleckyBrubaker & Associates, Inc.1215 Fern Ridge ParkwaySuite 208P.O. Box 412000St. Louis, MO 63141-2000(e-mail) [email protected]

Alpena Power CompanyJames D. FloripGillard Bauer Mazrum FloripSmigelski & Gulden109 E. ChisolmAlpena MI 49707(517) 356-3444(517) 354-2821 (FAX)e-mail: [email protected]

mailto:[email protected]






Page 2 of 3Service List Continued:

Citizens for Power and ReliabilityNorth American Natural Resoures, Inc. et al.Dow Corning and HemlockSeminconductorDavid E.S. MarvinMichael S. AshtonFraser Trebilcock Davis & Foster1000 Michigan Nation TowerLansing, MI 48933(517) 377-0825(517) 482-0887 (fax)(e-mail) [email protected](e-mail) [email protected]

CMS MS&T Michigan L.L.C.CMS Marketing, Services andTrading CompanyJulio C. MazzoliMichael J. SheridanCMS Enterprises Company330 Town Center Drive, Suite 1000Dearborn, MI 48126-2712(313) 436-9406(313) 436-9225 (FAX)(e-mail) [email protected]

Consumers EnergyJon R. Robinson212 W. Michigan AvenueJackson, MI 49201(517) 788-0698(517) 788-0768 (FAX)(e-mail) [email protected]

The Detroit Edison CompanyBruce R. MatersJon P. Christinidis2000 Second Ave. (Rm. 688 WCB)Detroit, MI 48226(313) 235-7481 Maters(313) 235-7706 Christinidis(313) 235-8500 (FAX)(e-mail) [email protected](e-mail) [email protected](e-mail) [email protected]

Energy MichiganEric J. SchneidewindThe Victor Center201 North Washington SquareSuite 810Lansing, MI 48933(517) 482-6237(517) 482-6937 (Fax)(e-mail) [email protected]

Indiana Michigan Power CompanyRichard J. AaronHonigman Miller Schwartz and Cohn222 N. Washington Square, Ste. 400Lansing, MI 48933-1800(517) 377-0701(517) 484-8286 (Fax)(e-mail) [email protected]

Marc E. LewisIndiana Michigan Power CompanyOne Summit SquareP.O. Box 60Fort Wayne, IN 46801(219) 425-2195










Page 3 of 3Service List Continued:

Midland Cogeneration VentureMichael J. BrownHoward & Howard222 N. Washington Square, Ste. 500Lansing, MI 48933(517) 377-0609(517) 485-1568 (FAX)e-mail: [email protected]

Michigan Independent PowerProducers AssociationRonald E. RussellRussell & Russell, P.C.525 Okemos Road, Suite BOkemos, MI 48854(517) 676-6400(517) 676-3544 (FAX)e-mail: [email protected]

Northern States Power Company –Wisconsin, Wisconsin ElectricPower Company, Edison SaultElectric Company, WisconsinPublic Service Corporation andUpper Peninsula Power CompanyHarvey J. MessingSherri A. WellmanLoomis Ewert Parsley Davis &Gotting232 S. Capitol Avenue, Ste. 1000Lansing, MI 48933(517) 482-2400(517) 482-7227 (FAX)(e-mail) [email protected]

Exelon Energy CompanyJohn M. DempseyMike CalabreseDickson Wright PLLC215 South Washington SquareSuite 200Lansing, MI 48933-1816(517) 371-1730(517) 487-4700 (FAX)(e-mail) [email protected](e-mail) [email protected]







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