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

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

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In the matter, on the Commission’s own motion, ) assigning docket numbers for the filing of biennial ) energy optimization plans and reconciliations for ) Case No. U-16669 ALPENA POWER COMPANY to fully comply with ) Public Act 295 of 2008. ) ) At the September 13, 2011 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. Orjiakor N. Isiogu, Chairman

Hon. Greg R. White, Commissioner

ORDER APPROVING SETTLEMENT AGREEMENT

On July 1, 2011, Alpena Power Company (Alpena) filed an application, with supporting

testimony and exhibits, seeking approval of its energy optimization (EO) plan and 2011 EO plan

review pursuant to Public Act 295 of 2008, MCL 460.1001, et seq., (Act 295).

A prehearing conference was held on July 11, 2011 before Administrative Law Judge

Mark E. Cummins. Alpena and the Commission Staff participated in the proceedings.

Subsequently, the parties submitted a settlement agreement resolving all issues in the case.

According to the terms of the settlement agreement, attached as Attachment A, Alpena plans

to meet its Act 295 EO program requirements by continuing to use the Commission-selected EO

program administrator, Efficiency United, and by paying the alternative compliance payment for

the years 2012 and 2013. The cost of Alpena’s EO program is $510,504 for 2012 and $516,550

for 2013.

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Alpena proposes to recover the costs associated with the implementation of its EO plan by

continuing to impose an EO surcharge. Exhibit B-1, Schedule 1 to Attachment A shows Alpena’s

proposed tariff sheet No. D-4.90 with an EO surcharge effective January 2012. Exhibit B-1,

Schedule 2 to Attachment A, shows Alpena’s proposed tariff sheet No. D-4.90 with an EO

surcharge effective January 2013. Any under- or overrecovery will be rolled into subsequent plan

years.

Alpena plans to continue self-directed EO plans for eligible electric customers. Alpena

currently has two such customers. In the future, should any other customer be eligible for and

elect to self-direct, Alpena will notify the customer of its obligations under a self-directed EO

program and, accordingly, adjust Alpena’s revenue requirements in subsequent applications.

Additionally, Alpena will collect any low-income surcharge related to the EO and include funds

collected from such a surcharge with the payments to the EO program administrator.

The Commission finds that the settlement agreement is reasonable and in the public interest,

and should be approved.

THEREFORE, IT IS ORDERED that:

A. The settlement agreement, attached as Attachment A, is approved.

B. Alpena Power Company’s energy optimization plan is approved.

C. Alpena Power Company shall recover the costs associated with the implementation of its

energy optimization plan by imposing an energy optimization surcharge as shown on Exhibit B-1,

Schedule 1 to Attachment A, the company’s proposed tariff sheet No. D-4.90, with an energy

optimization surcharge effective January 2012. Any under- or overrecovery shall be rolled into

subsequent plan years.

D. Alpena Power Company shall recover the costs associated with the implementation of its

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energy optimization plan by imposing an energy optimization surcharge as shown on Exhibit B-1,

Schedule 2 to Attachment A, the company’s proposed tariff sheet No. D-4.90, with an energy

optimization surcharge effective January 2013. Any under- or overrecovery shall be rolled into

subsequent plan years.

E. Thirty days prior to implementation, Alpena Power Company shall file with the

Commission tariff sheets substantially in conformity with Exhibit B-1 to the settlement agreement.

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, under MCL 462.26.

MICHIGAN PUBLIC SERVICE COMMISSION

________________________________________ Orjiakor N. Isiogu, Chairman

________________________________________ Greg R. White, Commissioner By its action of September 13, 2011. ________________________________ Mary Jo Kunkle, Executive Secretary