S T A T E O F M I C H I G A N
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
* * * * *
In the matter of the application of ) WISCONSIN PUBLIC SERVICE CORPORATION ) for approvals pursuant to Section 6j(13)(b) of 1982 ) PA 304 and Section 32(c) of the Public Utility ) Case No. U-14040 Holding Company Act of 1935, and deferred ) accounting approvals. ) ) At the August 10, 2004 meeting of the Michigan Public Service Commission in Lansing,
Michigan.
PRESENT: Hon. J. Peter Lark, Chair
Hon. Robert B. Nelson, Commissioner Hon. Laura Chappelle, Commissioner
ORDER APPROVING SETTLEMENT AGREEMENT
On February 27, 2004, Wisconsin Public Service Corporation (WPS Corp) filed an application
seeking approvals arising out of the sale of the Kewaunee Nuclear Power Plant (KNPP) by WPS
Corp and Wisconsin Power and Light Company (WPL) as sellers to Dominion Energy Kewaunee,
Inc. (Dominion). Specifically, WPS Corp sought (i) approval, pursuant to Section 6j(13)(b) of
1982 PA 304 (Act 304), MCL 460.6j(13)(b), of the capacity charges associated with the purchase
power agreement (PPA) between WPS Corp and Dominion, (ii) specific determinations, pursuant
to Section 32(c) of the Public Utility Holding Company Act of 1935 (PUHCA), as amended,
15 USC 79z-5a, regarding the KNPP’s status as an eligible facility, (iii) approval to defer for
accounting purposes all gains and losses resulting from the sale and the transaction and transition
costs incurred by WPS Corp to achieve the sale, and (iv) approval to continue to depreciate all
Page 2 U-14040
assets transferred to Dominion until the closing date of the sale. The application was accompanied
by a redacted version of the testimony and exhibits of Bradley A. Johnson and Paul J. Spicer.
Pursuant to due notice, a prehearing conference was held on April 21, 2004. Administrative
Law Judge Sharon L. Feldman presided over the proceeding and the Commission Staff entered its
appearance. The petitions to intervene of Attorney General Michael A. Cox, Great Lakes Pulp
Company, and Dominion were granted.1
On May 4, 2004, a hearing was held to address the issuance of a protective order that was
subsequently issued on May 11, 2004. Thereafter, confidential information supporting WPS
Corp’s application was filed under seal and the case proceeded in a confidential manner.
In its application and supporting testimony, WPS Corp represents that the KNPP is located in
Kewaunee County, Wisconsin, and was placed into commercial operation in 1974. WPS Corp
owns 59% and WPL owns 41% of the KNPP. Since 1974 and as recent as WPS Corp’s last
electric rate case before the Commission, Case No. U-13688, WPS Corp’s costs associated with
the ownership and operation of the KNPP were included in the company’s cost of service in
determining WPS Corp’s revenue requirement. Pursuant to an asset sale agreement dated
November 7, 2003, WPS Corp and WPL have agreed to sell the KNPP to Dominion. In
accordance with the agreement, WPS Corp and WPL will transfer their undivided interests in the
KNPP, together with appurtenant facilities and equipment, to Dominion. Subject to certain
adjustments and prorations, Dominion will pay $220 million to WPS Corp and WPL for 100%
ownership and control of KNPP. The purchase price will be allocated in relation to WPS Corp’s
and WPL’s current ownership interests in the KNPP. WPS Corp and WPL are transferring their
qualified nuclear decommissioning trust funds to Dominion but are retaining their non-qualified
1At a hearing held on May 4, 2004, WPL’s petition to intervene, limited to addressing the
issuance of a protective order, was granted without objection.
Page 3 U-14040
nuclear decommissioning trust funds for amortization to their customers, the collective pre-tax
value of which at the sale’s closing is expected to be approximately $193 million.
WPS Corp further represents that in connection with the sale, WPS Corp and WPL will enter
into PPAs with Dominion for the purchase of virtually all of the capacity, energy, and associated
ancillary services from the KNPP through the end of the current Nuclear Regulatory Commission
(NRC) operating license, which expires on December 21, 2013. There are capacity charges
associated with the PPA which are in excess of six months. These capacity charges are referred to
in the PPA as “Capital Recovery Cost,” “Fixed O&M Labor and Labor Related Costs,” and “Fixed
O&M Non-Labor Costs,” as each is uplifted by gross receipts license fees. WPS Corp requests
Commission approval of the capacity charges pursuant to Section 6j(13)(b) of Act 304.
Additionally, WPS Corp represents that under the PPA it will purchase its proportionate share
of the KNPP’s generating capacity and associated energy at fixed pricing that approximates the
forecasted cost to WPS Corp of continued ownership of the KNPP through the term of the current
NRC operating license. The PPA guarantees a capacity factor during non-refueling outage periods
that is higher than the KNPP’s historical availability, with premiums and penalties for Dominion
based on its performance against the capacity factor guarantee. The PPA permits Dominion to
satisfy WPS Corp from the KNPP, or other accredited source of replacement power, ensuring a
reliable supply of power to WPS Corp and its customers. Dominion will have a limited
opportunity to sell KNPP output to parties other than WPS Corp in excess of the contractual
“Capacity Amount,” defined in the PPA to be 545 megawatts as adjusted for the pending KNPP
capacity “uprate” project. Dominion may also sell WPS Corp’s share of KNPP output to third
parties only if (i) Dominion completes a scheduled maintenance outage prior to the scheduled
completion date, in which case the sale would be restricted to the interval between the completion
Page 4 U-14040
and scheduled completion dates, (ii) if WPS Corp is in default under its PPA due to nonpayment,
or (iii) WPS Corp declares a force majeure event.
Moreover, Dominion intends to obtain a determination of exempt wholesale generator status
from the Federal Energy Regulatory Commission. WPS Corp is asking the Commission for an
“eligible facility” determination to facilitate Dominion’s request for determination of exempt
wholesale generator status. WPS Corp represents that the sale and designation of the KNPP as an
eligible facility pursuant to Section 32(c) of PUHCA benefits customers and is in the public
interest by (i) reducing the regulatory and economic risks associated with WPS Corp’s continued
ownership of 59% of the KNPP, while retaining the benefits of the KNPP’s low cost zero emission
baseload output via the PPA; (ii) allowing a more timely application of the value of WPS Corp’s
non-qualified decommissioning trust funds to the benefit of its customers; and (iii) increasing the
likelihood that KNPP output will be available after the current NRC license expires. WPS Corp
further represents that allowing KNPP to become an eligible facility will not violate Michigan law.
Subsequent to the prehearing conference, the parties engaged in settlement discussions and
entered into a settlement agreement resolving all of the issues in this proceeding. In the settlement
agreement, attached as Exhibit A, the parties agree. The Attourney General submitted a statement
of non-objection to the settlement. That contingent upon the approval of the sale of the KNPP by
the Public Service Commission of Wisconsin (WPSC) in Docket No. 05-EI-136 and upon closing
of the sale to Dominion: (i) the capacity charges in excess of six months associated with the PPA
between WPS Corp and Dominion should be approved pursuant to Sec. 6j(13)(b) of Act 304; (ii)
that upon the onset of the PPA, WPS Corp will not seek to recover the PPA capacity charges
through the power supply cost recovery (PSCR) clause until after there is an adjustment in WPS
Corp’s electric base rates to reflect the removal of its share of the costs of the KNPP from WPS
Page 5 U-14040
Corp’s cost of service, although WPS Corp will, effective with the onset of the PPA, recover all
other charges resulting from the PPA, as uplifted by gross receipts license fees, through the PSCR
clause; and (iii) WPS Corp’s nonqualified decommissioning funds will be released from
dedication to the future decommissioning of the KNPP and will be applied to the benefit of
customers as approved by all regulatory bodies with jurisdiction. The Michigan jurisdictional
portion of WPS Corp’s non-qualified decommissioning trust fund will be refunded to WPS Corp’s
Michigan electric customers as a credit to the WPS Corp PSCR and amortized over five years
beginning with the first business month after the closing of the KNPP sale, but in no case earlier
than the January 2005 business month. The parties further agree that contingent upon the WPSC’s
approval of the sale that (i) all gains resulting from the sale and transaction and transition costs
incurred by WPS Corp in achieving the KNPP sale will be deferred for accounting purposes only
to the extent that the transaction results in a net benefit to Michigan customers as determined in
WPS Corp’s next to-be-filed Michigan electric general rate case and then only until new rates
become effective as established in WPS Corp’s next to-be-filed Michigan electric general rate
case; and (ii) WPS Corp will continue to depreciate all assets transferred to Dominion until the
closing date of the sale of the KNPP. Finally, the parties unconditionally agree that the
Commission pursuant to Section 32(c) of PUHCA should make specific determinations that
allowing the KNPP to be an eligible facility (i) will benefit customers, (ii) is in the public interest,
and (iii) does not violate Michigan law.
Discussion
After a review of the settlement agreement, the Commission finds it is reasonable and in the
public interest and should be approved.
Page 6 U-14040
Section 32(c) of PUHCA provides that if a rate or charge in connection with any facility was
in effect under the laws of any state on October 24, 1992, in order for the facility to be considered
an eligible facility, the state commission having jurisdiction over the rate must make specific
determinations that allowing the facility to be an eligible facility (1) will benefit customers, (2) is
in the public interest, and (3) does not violate state law. Regarding the final determination, the
Commission is unaware of any requirement of Michigan law that would be violated by designating
the KNPP as an eligible facility. Moreover, the Commission has determined that the proposed sale
of the KNPP and designation as an eligible facility will benefit Michigan customers and is in the
public interest in (i) the reduction of the regulatory and economic risks associated with WPS
Corp’s continued ownership of 59% of the KNPP, while retaining the benefits of the KNPP’s low
cost zero emission baseload output via the PPA; (ii) the more timely application of the value of
WPS Corp’s non-qualified decommissioning trust funds of WPS Corp’s Michigan customers; and
(iii) the increased likelihood that KNPP output will be available after the current NRC license
expires.
The Commission FINDS that:
a. Jurisdiction is pursuant to 1909 PA 106, as amended, MCL 460.551 et seq.; 1919 PA 419,
as amended, MCL 460.51 et seq.; 1939 PA 3, as amended, MCL 460.1 et seq.; 1969 PA 306, as
amended, MCL 24.201 et seq.; 15 USC 79z-5a; and the Commission’s Rules of Practice and
Procedure, as amended, 1992 AACS, R 460.17101 et seq.
b. The settlement agreement is reasonable and in the public interest and should be approved.
c. Allowing the KNPP to be an eligible facility will benefit customers, is in the public
interest, and does not violate Michigan law.
Page 7 U-14040
THEREFORE, IT IS ORDERED that:
A. The settlement agreement, attached as Exhibit A, is approved.
B. The request of Wisconsin Public Service Corporation for specific determinations regarding
Section 32(c) of the Public Utility Holding Company Act is granted. Allowing the Kewaunee
Nuclear Power Plant to be an eligible facility will benefit customers, is in the public interest, and
does not violate Michigan law.
C. In accordance with the terms of the settlement agreement, the capacity charges associated
with the purchase power agreement between Wisconsin Public Service Corporation and Dominion
Energy Kewaunee, Inc., are approved pursuant to Section 6j(13)(b) of 1982 PA 304. Wisconsin
Public Service Corporation will not seek to recover these capacity charges through its power
supply cost recovery clause until after there is an adjustment in Wisconsin Public Service
Corporation’s electric base rates to reflect the removal of its share of the costs of the Kewaunee
Nuclear Power Plant from cost of service. Effective with the onset of the purchase power
agreement, Wisconsin Public Service Corporation will, however, recover all other charges
associated with the purchase power agreement through the power supply cost recovery clause.
D. In accordance with the terms of the settlement agreement, Wisconsin Public Service
Corporation may defer for accounting purposes all gains resulting from the sale and transaction
and transition costs incurred in achieving the sale to the extent that the transaction results in a net
benefit to Michigan customers.
E. In accordance with the terms of the settlement agreement, Wisconsin Public Service
Corporation’s non-qualified decommissioning fund will be released from dedication to the future
decommissioning of the Kewaunee Nuclear Power Plant and will be applied to the benefit of
customers as approved by all regulatory bodies with jurisdiction. Wisconsin Public Service
Page 8 U-14040
Corporation will refund to its Michigan electric customers the Michigan jurisdictional portion of
its non-qualified decommissioning funds pursuant to a credit to its power supply cost recovery
clause amortized over five years beginning with the first business month after the closing of the
sale, but in no case earlier than the January 2005 business month.
F. Wisconsin Public Service Corporation will continue to depreciate all assets transferred to
Dominion Energy Kewaunee, Inc., until the closing date of the sale of the Kewaunee Nuclear
Power Plant.
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.
MICHIGAN PUBLIC SERVICE COMMISSION
/s/ J. Peter Lark
Chair ( S E A L)
/s/ Robert B. Nelson Commissioner
/s/ Laura Chappelle Commissioner By its action of August 10, 2004. /s/ Mary Jo Kunkle Its Executive Secretary
Page 9 U-14040
Corporation will refund to its Michigan electric customers the Michigan jurisdictional portion of
its non-qualified decommissioning funds pursuant to a credit to its power supply cost recovery
clause amortized over five years beginning with the first business month after the closing of the
sale, but in no case earlier than the January 2005 business month.
F. Wisconsin Public Service Corporation will continue to depreciate all assets transferred to
Dominion Energy Kewaunee, Inc., until the closing date of the sale of the Kewaunee Nuclear
Power Plant.
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.
MICHIGAN PUBLIC SERVICE COMMISSION
_________________________________________
Chair
_________________________________________ Commissioner
_________________________________________ Commissioner By its action of August 10, 2004. ______________________________ Its Executive Secretary
- --__ EXHIBIT A
STATE OF MICHIGAN
BEFORE MICHIGAN PUBLIC SERVICE COMMISSION
In the matter of the application of WISCONSIN PUBLIC SERVICE CORPORATION
)
for approvals pursuant to Sec. 6j(l3)(b) of 1982 PA )
304 and Sec. 32(c) of the Public Utility Holding ) )
Company Act of 1935, and deferred accounting approvals. )
Case No. U-14040
SETTLEMENT AGREEMENT
As provided in Section 78 of the Administrative Procedures Act of 1969 ("APA"), MCL
24.278, and the Rules of Practice and Procedure Before the Commission, Rule 333,
R460.17333, Wisconsin Public Service Corporation ("WPS Corp"), the Michigan Public
Service Commission Staff ("Staff'), Great Lakes Pulp Company ("Great Lakes") and
Dominion Energy Kewaunee, Inc. ("Dominion") have reached agreement on all issues and
hereby stipulate as follows:
1. On February 27, 2004, WPS Corp filed an application with the Michigan Public
Service Commission ("Commission") seeking various approvals arising out of the sale of the
Kewaunee Nuclear Power Plant ("KNPP") by WPS Corp and Wisconsin Power and Light
Company ("WPL") as sellers to Dominion. Specifically, WPS Corp sought (i) approval,
pursuant to Section 6j(13)(b) of 1982 PA 304 ("Act 304"), MCL, 460.6](13)(b), of the capacity
charges associated with the Purchase Power Agreement ("PPA) between WPS Corp and
Dominion, (ii) determinations, pursuant to Sec. 32(c) of the Public Utility Holding Company Act
of 1935 ("PUHCA"), as amended, 15 USC 792-5a, regarding the KNPP's status as an eligible
facility, (iii) approval to defer for accounting purposes all gains and losses resulting from the
sale and the transaction and transition costs incurred by WPS Corp to achieve the sale, and
- I
(iv) approval to continue to depreciate all assets transferred to Dominion until the closing date
of the sale. The application was accompanied by the supporting testimony and exhibits of
Bradley A. Johnson and Paul J. Spicer.
2. In its application WPS Corp represents that the KNPP is located in Kewaunee
County, Wisconsin, and was placed into commercial operation in 1974. WPS Corp owns 59%
and WPL owns 41 % of the KNPP. Since 1974 and as recent as WPS Corp's last electric rate
case before the Commission, Case No. U-13688, WPS Corp's costs associated with the
ownership and operation of the KNPP were included in the Company's cost of service in
determining WPS Corp's revenue requirement. Pursuant to an Asset Sale Agreement, dated
November 7,2003, WPS Corp and WPL have agreed to sell the KNPP to Dominion. In
accordance with the agreement, WPS Corp and WPL will transfer their undivided interests in
the KNPP, together with appurtenant facilities and equipment, to Dominion. Subject to certain
adjustments and prorations, Dominion will pay $220 million to WPS Corp and WPL for 100%
ownership and control of KNPP. The purchase price will be allocated in relation to WPS .
Corp's and WPL's current ownership interests in the KNPP. WPS Corp and WPL are
transferring their qualified nuclear decommissioning trust funds to Dominion but are retaining
their non-qualified nuclear decommissioning trust funds for amortization to their customers, the
collective pre-tax value of which at the sale's closing is expected to be approximately $1 93
million.
3. In its application WPS Corp further represents that in connection with the sale, WPS
Corp and WPL will enter into PPAs with Dominion for the purchase of virtually all of the
capacity, energy and associated ancillary services from the KNPP through the end of the
current Nuclear Regulatory Commission ("NRC") operating license, which expires on
December 21,201 3. There are capacity charges associated with the PPA which are in excess
of six months. These capacity charges are referred to in the PPA as "Capital Recovery Cost",
"Fixed O&M Labor and Labor Related Costs", and "Fixed O&M Non-Labor Costs", as each is
uplifted by Gross Receipts License Fees. WPS Corp represents that although it is seeking
"prior" Commission approval of the capacity charges pursuant to Sec. 6j(13)(b) in this
proceeding it will not seek to recover the PPA capacity charges through its Power Supply Cost
Recovery ("PSCR") clause until after there is an adjustment in WPS Corp's electric base rates
to reflect the removal of its share of the costs of the KNPP from WPS Corp's cost of service.
4. Additionally, WPS Corp represents that under the PPA it will purchase its
proportionate share of the KNPP's generating capacity and associated energy at fixed pricing
that approximates the forecasted cost to WPS Corp of continued ownership of the KNPP
through the term of the current NRC operating license. The PPA guarantees a capacity factor
during non-refueling outage periods that is higher than the KNPP's historical availability, with
premiums and penalties for Dominion based on its performance against thecapacity factor
guarantee. The PPA permits Dominion to satisfy WPS Corp from the KNPP, or other
accredited source of replacement power, ensuring a reliable supply of power to WPS Corp and
its customers. Dominion will have a limited opportunity to sell KNPP output to parties other
than WPS Corp in excess of the contractual "Capacity Amount," defined in the PPA to be 545
MW as adjusted for the pending KNPP capacity "uprate" project. Dominion may also sell WPS
Corp's share of KNPP output to third parties only (i) if Dominion completes a scheduled
maintenance outage prior to the scheduled completion date, in which case the sale would be
restricted to the interval between the completion and scheduled completion dates, (ii) if WPS
Corp is in default under its PPA due to nonpayment, or (iii) in the event of a force majeure
declared by WPS Corp.
5. Moreover, Dominion intends to obtain a determination of exempt wholesale
generator status from the Federal Energy Regulatory Commission. WPS Corp is asking the
Commission for an "eligible facility" determination to facilitate Dominion's request for
determination of Exempt Wholesale Generator status. WPS Corp represents that the sale and
designation of the KNPP as an eligible facility pursuant to Sec. 32(c) of PUHCA benefits
customers and is in the public interest by (i) reducing the regulatory and economic risks
associated with WPS Corp's continued ownership of 59% of the KNPP, while retaining the
benefits of the KNPP's low cost zero emission baseload output via the PPA, (ii) allowing a
more timely application of the value of WPS Corp's non-qualified decommissioning trust funds
to the benefit of its customers, and (iii) resulting in a greater likelihood of KNPP output being
available after the current NRC license expires. WPS Corp further represents that allowing
KNPP to become an eligible facility will not violate Michigan law.
6. On March 23, 2004, the Commission's Executive Secretary issued the Notice of
Hearing directing WPS Corp to mail a copy of the Notice of Hearing to all cities, incorporated
villages, townships and counties in its service territory and to intervenors in its 2004 PSCR
plan case. Moreover, WPS Corp was directed to publish the Notice in daily newspapers of
general circulation throughout its service territory.
7. On April 21, 2004, a prehearing conference was held during whicb the requisite
Affidavit of Mailing and the Proof of Publication were admitted into the record without objection.
Administrative Law Judge ("ALJ") Sharon L. Feldman presided over the proceeding and Staff
entered its appearance. The petitions to intervene of the Attorney General Michael A. Cox,
Great Lakes and Dominion were granted.'
8. At the May 4, 2004 hearing the parties addressed the issuance of a protective order.
9. On May I I, 2004, ALJ Feldman issued her Ruling on Protective Order granting a
protective order.
10. On or around June 16, 2004, the parties engaged in settlement discussions and, as
a result, have successfully reached compromise on all of the issues in this case. Each party to
the settlement agreement agrees that the agreement represents a fair and reasonable
resolution of the issues in this proceeding.
11. Contingent upon the Public Service Commission of Wisconsin approving the sale of
the KNPP to Dominion in Docket No. 05-El-136, the parties agree as follows:
a. Upon closing of the sale of the KNPP to Dominion, the capacity charges in
excess of six months associated with the PPA between WPS Corp and Dominion are
reasonable and prudent and should be approved by the Commission pursuant to Sec. 6j(l3)(b)
of Act 304. WPS Corp will not seek recovery of the PPA capacity charges through its PSCR
At the May 4, 2004 hearing, Wisconsin Power and Light Company's petition for intervention for the limited purpose of addressing the issuance of a protective order was granted without objection.
clause until after there is an adjustment in WPS Corp's electric base rates to reflect the
removal of its share of the costs of the KNPP from WPS Corp's cost of service. WPS Corp
may, effective with the onset of the PPA, recover aH charges other than capacity charges
resulting from the PPA, as uplifted by Gross Receipts License Fees, through the PSCR clause.
A migration of KNPP costs currently incorporated in WPS Corp's electric base rates to the
PSCR will be done in WPS Corp's to-be-filed next Michigan electric general rate proceeding.
b. All gains resulting from the sale and transaction and transition costs incurred
by WPS Corp in order to achieve the KNPP sale will be deferred for accounting purposes only
to the extent that the transaction results in a net benefit to Michigan custom~rs, and then only
until new rates become effective as established in WPS Corp's to-be-filed next Michigan
electric general rate proceeding. The final determination as to the regulatory approval of the
components of the net benefit will occur in WPS Corp's to-be-filed next Michigan electric
general rate proceeding following the sale of the KNPP.
c. WPS Corp will continue to depreciate all assets transferred to Dominion until
the closing date of the sale of the KNPP.
d. Upon closing of the sale of the KNPP to Dominion, WPS Corp's non-qualified
decommissioning fund will be released from dedication to the future decommissioning of the
KNPP and will be applied to the benefit of customers as approved by all regulatory bodies with
jurisdiction. The Michigan jurisdictional portion of WPS Corp's non-qualified decommissioning
trust fund will be refunded to WPS Corp's Michigan electric customers as a credit to the WPS
Corp PSCR, and amortized over 5 years beginning with the first business month after the
closing of the KNPP sale, but in no case earlier than the January 2005 business month. The
Michigan jurisdictional portion of WPS Corp's non-qualified decommissioning trust fund will
equal I .9710% of the value of WPS Corp's retained portion of the liquidated non-qualified
decommissioning trust fund.
12. Also, the parties unconditionally agree that specific determinations allowing the
KNPP to be an eligible facility pursuant to Sec. 32(c) of PUHCA (i) will benefit the Michigan
customers of WPS Corp, (ii) is in the public interest, and (iii) does not violate Michigan law,
should be made by the Commission.
13. All of the signatories are of the opinion that this Settlement Agreement will aid the
expeditious conclusion of this case.
14. This Settlement Agreement is intended for a final disposition of this proceeding, and
the parties join in respectfully requesting the Commission grant prompt approval. The parties
agree not to appeal, challenge, or contest the Commission's Order accepting and approving
this Settlement Agreement without modification. If the Commission does not accept the
Settlement Agreement without modification, the Agreement shall be withdrqwn and shall not
constitute any part of the record in this proceeding or be used for any other purpose
whatsoever.
15. This Settlement Agreement is entered into for the sole and express purpose of
reaching a compromise among the positions of the parties. All offers of settlement and
discussions relating to this settlement are, and shall be considered, privileged under MRE 408.
If the Commission approves this Settlement Agreement without modifications, neither parties
to this Settlement Agreement nor the Commission shall make any reference to, or use this
Settlement Agreement or the order approving it as a reason, authority, rationale or example for
taking any action or position or making an subsequent decision in any other case or
proceeding; provided, however, such references may be made to enforce or implement the
provisions of this Settlement Agreement. This Settlement Agreement does not constitute a
precedent in any other case or proceeding except as necessary to carry out its terms.
16. All signatories agree to waive Section 81 of the APA, as amended, MCL 24.281, as
it applies to the issues in this proceeding.
Respectfully Submitted,
Dated: JC,ly 15 , 2004 By:
WISCONSIN PUBLIC SERVICE CORPORATION
One of its Attorneys Harvey J. Messing (P23309) Sherri A. Wellman (P38989) Loomis, Ewert, Parsley, Davis & Gotting, P.C. 232 S. Capitol Avenue, Suite 1000 Lansing, MI 48933
MICHIGAN PUBLIC SERVICE COMMISSION STAFF
,2004 By:
Kristin M. Smith (P46323) Assistant Attorney General Public Service Division 6545 Mercantile Way, Suite 15 Lansing, MI 4891 1
GREAT LAKES PULP COMPANY
Dated: ?4 \5 ,2004 By: Its Attorney Christine Mason-~oneral Dykema Gossett 124 W. Allegan Street, Ste. 800 Lansing, Michigan 48933
. , . I
DOMINION ENERGY KEWAUNEE INC.
f i / f ,2004 By: Dated: Its ~t torne$ Stephen H. Watts, II one James Center 901 East Cary Street Richmond, VA 2321 9-4030
I:\SAW\WPS KNPP SA-FINAL.doc
STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
In the Matter of the Application of Wisconsin Public Service Corporation for approvals MPSC No. U-14040 pursuant to Sec. 6j(13)(b) of 1982 PA 304 and Sec. 32(c) of the Public Utility Holding Company Act of 193 5, and deferred accounting approvals.
Attorney General's Statement of Non-Objection to Settlement Agreement
Pursuant to Rule 333 of the Commission's Rules of Practice and Procedure,
[R 460.173331, Attorney General Michael A. Cox hereby submits this Statement of Non-
Objection to the Settlement Agreement proposed by the other parties in the captioned case. The
Attorney General does not object to the settlement agreement for the following reasons:
1. Wisconsin Public Service Corporation (WPS Corp) represents that the sale and
designation of the KNPP as an eligible facility pursuant to Sec. 32(c) of PUCHA benefits
customers and is in the public interest by (i) reducing the regulatory and economic risks
associated with WPS Corp's continued ownership of 59% of the KNFP, while retaining the
benefits of the KNPP's low cost zero emission baseload output via the Purchase Power
Agreement (PPA), (ii) allowing a more timely application of the value of WPS Corp's non-
qualified decommissioning trust funds to the benefit of its customers, and (iii) resulting in a
greater likelihood of KNPP output being available after the current NRC license expires. WPS
Corp further represents that allowing KNPP to become
Michigan Law.
an eligible facility will not violate
P R O O F O F S E R V I C E
STATE OF MICHIGAN ) Case No. U-14040
County of Ingham )
Patricia A. Fronta being duly sworn, deposes and says that on August 10th 2004, A.D. she
served a copy of the attached Commission orders by email, first class mail, postage prepaid,
or by inter-departmental mail, to the persons as shown on the attached service list.
_______________________________________
Patricia Fronta Subscribed and sworn to before me this 10th day of August 2004
_____________________________________ Notary Public, Eaton County, Michigan Acting in Ingham County My Commission expires November 22, 2004
SERVICE LIST FOR DOCKET # U – 14040 - CASE # DATE OF PREPARATION: 03/23/2004
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SUBSCRIPTION LIST ALL ELECTRIC ORDERS
Mr. Michael Peters Ms. Monica Martinez Michigan Electric Cooperative Senate Democratic Staff 2859 W. Jolly Rd. Romney Building Okemos, MI 48864 Lansing, MI ID MAIL Mr. Phillip Cross Public Utilities Reports, Inc. 8229 Boone Blvd., Ste. 401 Vienna, VA 22182 Mr. John Pestle Varnum, Riddering, Schmidt & Howlett Bridgewater Place P.O. Box 352 Grand Rapids, MI 49501-0352