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STATE OF MICHIGAN DEPARTMENT OF ATTORNEY GENERAL
P.O. BOX 30755 LANSING, MICHIGAN 48909
BILL SCHUETTE ATTORNEY GENERAL
March 14, 2013
Ms. Mary Jo Kunkle Executive Secretary Michigan Public Service Commission 6545 Mercantile Way Lansing, MI 48911 Dear Ms. Kunkle: Re: MPSC Case No. U-16655 Pursuant to the Commission's E-Dockets User Manual, I am attaching the Attorney General's Official Exhibits AG-01, AG-02, AG-03, and AG-04 along with a proof of service. These exhibits were admitted by ALJ Eyster during the hearing.
Sincerely, Donald E. Erickson Assistant Attorney General
c All Parties
PROOF OF SERVICE - U-16655
The undersigned certifies that the Attorney General’s Official Exhibits AG-01 through AG-04 served upon the parties listed below, by e-mailing the same to them at the email addresses listed below on the 14th day of March 2013. ____________________________________ Donald E. Erickson Administrative Law Judge: Mark D. Eyster [email protected] MPSC Staff: Sattler A. Spencer [email protected] Robert W. Beach [email protected] MEC: Christopher M. Bzdok [email protected]
Consumers Energy Company: [email protected] Raymond E. McQuillan [email protected] ABATE: Robert A. W. Strong (P27724) [email protected]
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight.gov/oversight
Midwest Electric Market: Overview and Focal Points
1010
Midwest Electric Regions
Page 1 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 1 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight.gov/oversight
Updated August 3, 2007
Midwest Electric Market: Overview and Focal Points
1010
Overview
Market Description
Midwest Reliability Organization (MRO) reliability region and the portion of the SERC reliability region in MISO and the ReliabilityFirst Corporation (RFC) reliability region not in PJM.
Geography
States covered: All or most of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan and parts of Montana, Missouri, Kentucky, and Ohio.
Reliability regions: Midwest Reliability Organization (MRO), Southeastern Electric Reliability Council (SERC) and ReliabilityFirst Corporation (RFC)
(These regions were formerly: East Central Area Reliability Coordination Agreement (ECAR), Mid-America Interconnected Network (MAIN), and Midcontinent Area Power Pool (MAPP) regions.)
Balancing authorities: See list on page 6.
Hubs: Cinergy, First Energy, Illinois, Michigan, Minnesota
RTO/ISO
Midwest ISO (MISO) (established 2002) administers a two-settlement (day ahead and real-time) energy market known as the Day-2 market. It produces hourly locational marginal prices that are rolled up into 5 regional hub prices. MISO also administers a monthly financial transmission rights (FTR) allocation and auction.
Midwest bilateral trading is active on the IntercontinentalExchange (ICE) at the Cinergy Hub and Northern Illinois Hub.
Midwest ISO 2006 State of the Markets ReportMarket Monitor: Dr. David Patton – Independent Market Monitor
Page 2 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 2 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight.gov/oversight
Updated June 1, 2007
Midwest Electric Market: Overview and Focal Points
1010
Generation/Supply (MISO only)
Marginal fuel type: Coal
Generating capacity (summer 2006): 137,232 MW
Capacity reserve (summer 2006): 21,025 MW
Reserve margin (summer 2006): 18%
Demand (MISO only)
All time peak demand: 116 GW (set July 31, 2006)
All time peak demand for MISO market footprint excluding LG&E: 110.5 GW (set July 31, 2006)
In summer of 2006, demand reached record levels on several occasions due to extremely hot weather.
Peak demand growth: 3.4% (2005-2006)
Summer Peak Demand (GW): 112.2 (2005) 116 (2006) 110.5 (2006 MISO market footprint excluding LG&E)
Source: Derived from MISO Data
Prices (MISO only)
Annual Average Day-Ahead Price at Cinergy Hub: $50.54/MWh (2005) $40.44/MWh (2006)
Prices increased in 2005 as a result of disturbances to the natural gas market. Prices declined in 2006 as natural gas storage levels remained above historical ranges throughout the injection season (April through October).
Page 3 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 3 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight.gov/oversight
Updated May 3, 2007
Midwest Electric Market: Overview and Focal Points
1010
Interconnections/Seams
Since the start of the Day-2 market on April 1, 2005, persistent transmission constraints in the Wisconsin and the Upper Peninsula of Michigan (WUMS) and Minnesota areas have caused their prices to diverge from other areas of MISO, usually at times of high loads or decreased generation supply.
Page 4 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 4 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Midwest Annual Average Bilateral Prices
Source: Derived from the Platts data.
Midwest Electric Market: Annual Bilateral Prices
1012
Annual Average Day Ahead On Peak Prices ($/MWh)2007 2008 2009 2010 2011 5-Year Avg
Cinergy $61.20 $66.88 $34.65 $41.51 $41.17 $51.20Michigan Hub $64.43 $69.15 $36.56 $43.68 $42.73 $53.81Minnesota Hub $72.32 $67.46 $32.09 $36.86 $34.57 $53.62NI Hub $58.93 $66.13 $34.47 $40.85 $40.31 $50.57Illinois Hub $59.88 $62.52 $31.36 $38.22 $38.12 $48.65MAPP South $61.18 $69.18 $33.31 $37.60 $35.48 $51.28
Updated January 11, 2012
Page 5 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 5 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Daily Average of MISO Day-Ahead Prices - All Hours
Midwest Electric Market: Last Month’s RTO Prices
Source: Derived from Bloomberg data1128
$0
$25
$50
$75
$100
$125Ja
n-01
Jan-
04
Jan-
07
Jan-
10
Jan-
13
Jan-
16
Jan-
19
Jan-
22
Jan-
25
Jan-
28
Jan-
31
Pric
e ($
/MW
h)
Indiana Hub Illinois HubMichigan HubMinnesota HubN Illinois Hub (PJM)
30 Day Rolling Average
$0
$20
$40
$60
$80
$100
2007
2008
2009
2010
2011
2012
Updated: February 14, 2012
Page 6 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 6 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Daily Average of MISO Day-Ahead Prices - All Hours
Midwest Electric Market: RTO Prices
Source: Derived from Bloomberg data1013
$0
$25
$50
$75
$100
$125
Jan-
11Fe
b-11
Mar
-11
Apr-1
1M
ay-1
1Ju
n-11
Jul-1
1Au
g-11
Sep-
11O
ct-11
Nov-
11De
c-11
Jan-
12
Pric
e ($
/MW
h)
Indiana Hub Illinois HubMichigan HubMinnesota HubN Illinois Hub (PJM)
30 Day Rolling Average
$0$20$40$60$80
$100
2007
2008
2009
2010
2011
2012
Updated: February 14, 2012
Page 7 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 7 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
MISO/PJM Index Day-Ahead On-Peak Prices
Midwest Electric Market: MISO/PJM Index Prices
Source: Derived from Platts data1194
$0
$50
$100
$150
$200
$250
$300Ja
n-10
Feb-
10M
ar-1
0Ap
r-10
May
-10
Jun-
10Ju
l-10
Aug-
10Se
p-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11Fe
b-11
Mar
-11
Apr-1
1M
ay-1
1Ju
n-11
Jul-1
1Au
g-11
Sep-
11O
ct-1
1N
ov-1
1D
ec-1
1Ja
n-12
Michigan HubIndiana HubMinnesota HubIllinois HubMAPP SouthPJM WestNI Hub
Monthly Average
$0$25$50$75
$100$125
2006
2007
2008
2009
2010
2011
2012
Pric
e ($
/MW
h)
Updated: February 09, 2012
Page 8 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 8 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Eastern Daily Index Day-Ahead On-Peak Prices
Midwest Electric Market: Last Month’s Eastern Index Prices
Source: Derived from Platts data11520
$0
$50
$100
$150
$200
$250Ja
n-01
Jan-
03Ja
n-05
Jan-
07Ja
n-09
Jan-
11Ja
n-13
Jan-
15
Jan-
17Ja
n-19
Jan-
21Ja
n-23
Jan-
25Ja
n-27
Jan-
29Ja
n-31
Indiana HubPJM WestWest New YorkMass HubDominion Hub
Monthly Average
$0
$50
$100
$150
$200
2006
2007
2008
2009
2010
2011
2012
Pric
e ($
/MW
h)
Updated: February 09, 2012
Page 9 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 9 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
MISO/PJM Index Day-Ahead On-Peak Prices
Midwest Electric Market: Last Month’s MISO/PJM Index Prices
Source: Derived from Platts data11521
$0
$50
$100
$150
$200
$250
$300Ja
n-01
Jan-
03
Jan-
05
Jan-
07
Jan-
09
Jan-
11
Jan-
13
Jan-
15
Jan-
17
Jan-
19
Jan-
21
Jan-
23
Jan-
25
Jan-
27
Jan-
29
Jan-
31
Michigan HubIndiana HubMinnesota HubIllinois HubMAPP SouthPJM WestNI Hub
Monthly Average
$0
$25
$50
$75
$100
$125
2006
2007
2008
2009
2010
2011
2012
Pric
e ($
/MW
h)
Updated: February 09, 2012
Page 10 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 10 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Midwestern Daily Index Day-Ahead On-Peak Prices
Midwest Electric Market: Last Month’s Midwestern Index Prices
Source: Derived from Platts data11522
$0
$100
$200
$300
$400
$500
$600Ja
n-01
Jan-
03
Jan-
05
Jan-
07
Jan-
09
Jan-
11
Jan-
13
Jan-
15
Jan-
17
Jan-
19
Jan-
21
Jan-
23
Jan-
25
Jan-
27
Jan-
29
Jan-
31
Indiana HubNorth SPPInto EntergyERCOT North
Monthly Average
-$15$10$35$60$85
$110$135$160$185$210$235$260
2006
2007
2008
2009
2010
2011
2012
Pric
e ($
/MW
h)
Updated: February 09, 2012
Page 11 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 11 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Eastern Daily Index Day-Ahead On-Peak Prices
Midwest Electric Market: Eastern Index Prices
Source: Derived from Platts data1014
$0
$50
$100
$150
$200
$250Ja
n-10
Feb-
10M
ar-1
0Ap
r-10
May
-10
Jun-
10Ju
l-10
Aug-
10Se
p-10
Oct
-10
Nov
-10
Dec
-10
Jan-
11Fe
b-11
Mar
-11
Apr-1
1M
ay-1
1Ju
n-11
Jul-1
1Au
g-11
Sep-
11O
ct-1
1N
ov-1
1D
ec-1
1Ja
n-12
Indiana HubPJM WestDominion HubWest New YorkMass Hub
Monthly Average
$0$25$50$75
$100$125$150
2006
2007
2008
2009
2010
2011
2012
Pric
e ($
/MW
h)
Updated: February 09, 2012
Page 12 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 12 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Implied Heat Rates at MISO and PJM Hubs - Weekly Averages
Midwest Electric Market: MISO/PJM Implied Heat Rates
Source: Derived from Platts on-peak electric and natural gas price data1133
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000Ja
n-10
Feb-
10M
ar-1
0Ap
r-10
May
-10
Jun-
10Ju
l-10
Aug-
10Se
p-10
Oct-
10No
v-10
Dec-
10Ja
n-11
Feb-
11M
ar-1
1Ap
r-11
May
-11
Jun-
11Ju
l-11
Aug-
11Se
p-11
Oct-
11No
v-11
Dec-
11Ja
n-12
Impl
ied
Hea
t Rat
e (B
tu/k
Wh)
Cinergy-Columbia Gas AppalachiaMichigan-Michigan Consumers CitygateMinnesota-Northern VenturaNI-Chicago CitygatePJM West - Columbia Gas Appalachia
Updated: February 01, 2012
Page 13 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 13 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Weekly Power Generation & Temps. - Central Industrial Region
Midwest Electric Market: Generation Output and Temperatures
Source: Derived from EEI and NOAA data1115
-80-60-40-20
020406080
Deg
ree
Day
sD
evia
tion
from
Nor
mal
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ele
ctric
Gen
erat
ion
(GW
h)
2007-11 Range2012
Updated: February 06, 2012
Page 14 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 14 of 15 pages
Federal Energy Regulatory Commission • Market Oversight • www.ferc.gov/oversight
Weekly Power Generation & Temps. - West Central
Midwest Electric Market: WC Generation Output and Temperatures
Source: Derived from EEI and NOAA data1116
0
2,000
4,000
6,000
8,000
10,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ele
ctric
Gen
erat
ion
(GW
h)
2007-11 Range2012
-80-60-40-20
020406080
Deg
ree
Day
sD
evia
tion
from
Nor
mal
Updated: February 06, 2012
Page 15 of 15
February 2012
MPSC Case No. U-16655 Exhibit AG-01 (MJM-1) Page 15 of 15 pages
(a) (b) (c) (d)Counterparty Capacity
On-Peak Off-PeakMW-Year MWh MWh
1 Experimental Advanced Renewable Program 0.000 1,444.886 577.9542 Elk Rapids Hydroelectric 0.200 1,286.172 1,353.9823 North American Natural Resources ‐ Lennon 0.263 4,797.322 5,399.7834 Scenic View Dairy ‐ Fennville 0.400 1,855.334 2,069.0315 Scenic View Dairy ‐ Freeport 0.626 2,902.844 3,284.6726 WM Renewable Energy ‐ Northern Oaks 1.400 5,599.375 6,773.2117 Zeeland Farm Services ‐ Plant 2 1.500 5,425.421 6,484.3368 2011 Total 4.389 23,311.354 25,942.969
Energy Delivered
MPSC Case No. U-16655 Exhibit AG-02 (MJM-2) Page 1 of 3 pages
Exhibit: AG‐02 (M
(e) (f) (g) (h) (i) (j)
On-Peak Off-Peak On-Peak Off-Peak$/MW-Year $/MWh $/MWh $ $ $
40,000.00 74.47 0.00 0.00 107,595.90 43,038.3440,000.00 70.83 40.71 8,000.00 91,093.60 55,114.8540,000.00 72.85 41.41 10,532.38 349,473.94 223,631.4440,000.00 71.35 41.10 16,000.00 132,376.90 85,033.1340,000.00 71.55 41.08 25,034.03 207,699.31 134,937.0440,000.00 72.58 41.38 56,000.00 406,425.27 280,296.2440,000.00 72.97 41.43 60,000.00 395,886.05 268,640.7940,000.00 72.52 40.38 175,566.40 1,690,550.97 1,090,691.83
2011 TRANSFER COST CALCULATION SUMMARY
Capacity Transfer Price
Energy Transfer PriceTotal Capacity Transfer Cost
Total Energy Transfer Cost
MPSC Case No. U-16655 Exhibit AG-02 (MJM-2) Page 2 of 3 pages
MJM‐2) Revised Company Exhibit A‐1(TPC‐1)
(k) (l) (m)Payment Difference
(Payment - Transfer Cost)
$ $ $
150,634.24 977,579.58 826,945.34154,208.45 228,248.14 74,039.69583,637.76 918,913.32 335,275.56233,410.03 297,459.11 64,049.08367,670.38 705,091.72 337,421.34742,721.52 984,534.40 241,812.88724,526.84 1,120,755.78 396,228.94
2,956,809.21 5,232,582.05 2,275,772.84
Total Transfer Cost
MPSC Case No. U-16655 Exhibit AG-02 (MJM-2) Page 3 of 3 pages
(a) (b) (c) (d) (e)
Description Jan Feb Mar Apr
Monthly and Total
Surcharge Revenue1 Residential 3,931,821$ 3,916,386$ 3,930,571$ 3,932,850$ 2 Commercial 1,802,441 1,792,294 1,801,194 1,788,300 3 Industrial 613,807 616,475 612,710 611,675 4 Streetlighting 98,833 117,856 106,350 106,450 5 Total Surcharge Revenue 6,446,902$ 6,443,011$ 6,450,825$ 6,439,275$
6 Rate Making Adjustment -$ - 1,837,000 221,000
Expenses:7 Excess Costs From PPAs 31,924$ (45,306) 17,586 (15,141) 8 Admin Costs 28,976 14,250 1,500 29,129 9 Total Expenses 60,900$ (31,056)$ 19,086$ 13,988$
Surcha
MPSC Case No. U-16655 Exhibit AG-03 Page 1 of 3
Exhibit: AG‐03 (
(f) (g) (h) (i) (j) (k)
May Jun Jul Aug Sep Oct
3,929,457$ 3,928,204$ 3,922,248$ 3,929,023$ 1,030,325$ 1,021,825$ 1,773,978 1,781,441 1,764,564 1,765,574 638,678 624,827
603,462 612,311 602,867 603,531 129,316 131,326 106,312 106,353 106,398 105,300 105,350 49,064
6,413,209$ 6,428,309$ 6,396,077$ 6,403,428$ 1,903,669$ 1,827,042$
221,000 221,000 221,000 221,000 221,000 221,000
56,152 37,220 (18,239) (32,593) (72,082) (58,265) - - 29,129 1,080 249,324 29,129
56,152$ 37,220$ 10,890$ (31,513)$ 177,242$ (29,136)$
arge Revenue and Costs (By Month & Total)
MPSC Case No. U-16655 Exhibit AG-03 Page 2 of 3
(MJM‐3) Revised Company Exhibit A‐7(SH‐1)
(l) (m) (n)
Nov Dec Total
1,021,397$ 1,024,078$ 35,518,185$ 620,151 621,459 16,774,901 125,776 128,462 5,391,718 49,011 49,014 1,106,291
1,816,335$ 1,823,013$ 58,791,095$
221,000 54,000 3,659,000
2,107 (60,216) (156,853) 6,692 1,247 390,456 8,799$ (58,969)$ 233,603$
MPSC Case No. U-16655 Exhibit AG-03 Page 3 of 3
(a) (b) (c) (d)
Description Jan Feb Mar
Monthly and Total
1 Total REC Expenditures 9,100$ 194,246$ 180,025$
2 1/2 of Current Month Expenditu 4,550$ 97,123$ 90,013$ 3 Prior Year Return 53,241 - - 4 Beginning Balance (Prior Ending 1,271,385 1,333,726 1,527,972 5 Amount Subject to Carrying Cos 1,329,176$ 1,430,849$ 1,617,985$
6 Rate of Return 9.80% 9.80% 9.80%Monthly Rate of Return 0.82% 0.82% 0.82%
8 Carrying Cost 10,855$ 11,685$ 13,214$
9 Carrying Cost Recorded 10,855 11,685 13,214
10 Cumulative 10,855 22,540 35,754
R
MPSC Case No. U-16655 Exhibit AG-04 (MJM-4) Page 1 of 3
(e) (f) (g) (h) (i) (j)
Apr May Jun Jul Aug Sep
226,088$ 216,024$ 223,146$ 223,252$ 200,279$ 215,827$
113,044$ 108,012$ 111,573$ 111,626$ 100,140$ 107,914$ - - - - - -
1,707,997 1,934,085 2,150,109 2,373,255 2,596,507 2,796,786 1,821,041$ 2,042,097$ 2,261,682$ 2,484,881$ 2,696,647$ 2,904,700$
9.80% 9.80% 9.80% 9.80% 9.80% 9.80%0.82% 0.82% 0.82% 0.82% 0.82% 0.82%
14,872$ 16,677$ 18,470$ 20,293$ 22,023$ 23,722$
14,872 16,677 18,470 20,293 22,023 23,722
50,626 67,303 85,773 106,066 128,089 151,811
Renewable Energy Credit (REC) Inventory Return (By Month & Total)
MPSC Case No. U-16655 Exhibit AG-04 (MJM-4) Page 2 of 3
Exhibit: AG‐04 (MJM‐4) Revised Company Exhibit A‐9(SH‐3)
(k) (l) (m) (n)
Oct Nov Dec Total
220,231$ 195,541$ 2,766,494$ 4,768,213$
110,116$ 97,771$ 1,383,247$ - - -
3,012,613 3,232,844 3,428,385 6,194,879 3,122,729$ 3,330,615$ 4,811,632$
9.80% 9.80% 9.80%0.82% 0.82% 0.82%
25,502$ 27,200$ 39,295$
25,502 27,200 39,295
177,313 204,513 243,808
MPSC Case No. U-16655 Exhibit AG-04 (MJM-4) Page 3 of 3