Reply Brief of the Environmental Law & Policy Center

Transcription

1 November 21, 2018 Ms. Kavita Kale Michigan Public Service Commission 7109 W. Saginaw Hwy. P. O. Box Lansing, MI RE: MPSC Case No. U Dear Ms. Kale: Sincerely, The following is attached for paperless electronic filing: Reply Brief of the Environmental Law & Policy Center Proof of Service Robert Kelter Environmental Law & Policy Center cc: Service List, Case No. U-20134

2 STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the application of CONSUMERS ENERGY COMPANY for authority to increase its rates for the generation and distribution of electricity and for other relief. Case No. U REPLY BRIEF ON BEHALF OF THE ENVIRONMENTAL LAW & POLICY CENTER November 21, 2018

3 INTRODUCTION The briefs by parties, other than the Attorney General s office, all support the EV program and offer little in terms of new arguments. Hence, Environmental Law and Policy Center s brief will focus on Consumers defense of its proposal to treat the EV rebates as a regulatory asset. ARGUMENT I. The Commission Should Not Allow Consumers to Treat Rebates as Regulatory Assets Consumers main argument is that treatment of the rebates as an expense would punish the utility. Specifically, Consumers argues that if the Commission treats the rebates as an expense, which by every accounting principle and traditional regulatory practice they should be treated as such, The Company s shareholders would have been better off if the Company had simply made reactive system upgrades as increased EV demand created the need for increased utility capital investment. Consumers Initial Brief at 257. This defense ignores the fact that Consumers has an obligation to serve its customers, and that the record reflects, through testimony by multiple witnesses, that this is the time to start building charging infrastructure. With all due respect, the Commission should not set a precedent where the utility threatens to only do the right thing if the Commission lets it earn a profit on spending that should be considered an expense. Moreover, as ELPC explains in its Initial Brief, the Company will benefit from increased sales and additional capital investment in the make ready infrastructure. While ELPC submits that the Commission should direct Consumers to implement PowerMIDrive as proposed without the asset treatment of the rebates, if the Commission finds that the Company needs an incentive then it should consider the Michigan Environmental Council (MEC, Natural Resources Defense Council (NRDC and Sierra Club (SC proposal to 1

4 give Consumers a performance-based incentive. MEC/NRDC/SC Initial Brief at 90. As the MEC/NRDC/SC brief points out, aligning shareholder rewards with more specific performance metrics provides incentives to maximize benefits. Id. Specifically, ELPC believes that the Commission could base such an incentive on Consumers success getting customers to charge off peak, as the California Public Utilities Commission has done with San Diego Gas & Electric s (SDG&E program. Id. Consumers opposes the performance incentive approach. Primarily, it cites the size of the pilot being smaller than SDG&E s program. Consumers Initial Brief at 254. However, Consumers argument relies on conclusory logic. It never argues that the size of the pilot is too small for it to make sense to encourage as many customers as possible to charge off peak. While ELPC does not believe incentives should be given without demonstrable customer benefits, charging off peak meets that criteria. The program maximizes customer benefits when customers charging at night create additional revenue from baseload power plants that already generate electricity at night, and clean wind that blows at night. II. DCFC Charging Prices for EVs Should Not Exceed Gasoline Prices Finally, ELPC notes it opposes ChargePoint s request to eliminate the requirement that DC Fast Charging (DCFC sites must agree to keep the rates at or below the comparable cost of gasoline. ChargePoint Initial Brief at 8. While ELPC supports competitive pricing, it wants to prevent unfair pricing where drivers travelling significant distances may have limited charging options. The difference between the cost of a complete charge and a full tank of gas is significant. Site hosts will retain a high level of pricing flexibility without needing to charge rates equivalent to the cost of gasoline. Given that the goal of this proceeding is to encourage 2

5 customers to purchase EVs and reduce range anxiety, and that the site hosts will benefit from utility customer funding, ELPC supports this reasonable requirement. CONCLUSION Consumers submits a reasonable proposal that the Commission should approve, with the improvements recommended by MEC/NRDC/SC. However, the one significant change the Commission should make to Consumers proposal is to treat the charging station rebates as an expense, rather than a regulatory asset. Additionally, the Commission should limit the prices for DCFC. Respectfully submitted, Date: November 21, 2018 Robert Kelter Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 T: ( F: ( rkelter@elpc.org 3

6 STATE OF MICHIGAN MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the application of Consumers Energy Company for authority to increase its rates for the generation and distribution of electricity and for other relief. Case No. U PROOF OF SERVICE I hereby certify that true copies of the foregoing Reply Brief on behalf of Environmental Law & Policy Center were served by electronic mail upon the following Parties of Record, this 21 st of November, Name/Party ABATE Bryan A. Brandenburg Michael J. Pattwell Jennifer M. Johnson Lauren K. Degnan Jeffry C. Pollock Billie S. LaConte Kitty A. Turner bbrandenburg@clarkhill.com mpattwell@clarkhill.com jmjohnson@clarkhill.com LDegnan@ClarkHill.com jcp@jpollockinc.com BSL@jpollockinc.com KAT@jpollockinc.com Address MPSC Staff Heather M.S. Durian Daniel Sonneveldt Michael J. Orris Monica M. Stephens Lori Mayabb Consumers Energy Company Bret A. Totoraitis Anne Uitvlugt Gary Gensch, Jr. Michael C. Rampe Theresa A.G. Stanley durianh@michigan.gov sonneveldtd@michigan.gov orrism@michigan.gov stephensm11@michigan.gov mayabb@michigan.gov bret.totoraitis@cmsenergy.com anne.uitvlugt@cmsenergy.com gary.genschjr@cmsenergy.com Michael.rampe@cmsenergy.com Theresa.staley@cmsenergy.com mpscfilings@cmsenergy.com 1

7 ChargePoint, Inc., Energy Michigan, and Michigan Energy Innovation Business Council Justin K. Ooms Tim Lundgren Tony L. Newell Laura A. Chappelle Laura Sherman Douglas Jester Michigan Environmental Council, Sierra Club, and Natural Resources Defense Council Christopher M. Bzdok Tracy Jane Andrews Karla Gerds Kimberly Flynn Attorney General Celeste R. Gill Sebastian Coppola Hemlock Semiconductor Corporation Jennifer Utter Heston Michigan Cable Telecom Association Michael S. Ashton Anita G. Fox Michigan State Utility Workers Council John R. Canzano Midland Cogeneration Venture, LP Richard Aaron Michael J. Pattwell 2

8 Energy Michigan, Inc. Laura A. Chappelle Timothy J. Lundgren Kimberley Champagne Alex Zakem The Kroger Co. Kurt J. Boehm Jody Kyler Cohn Michael L. Kurtz Kevin Higgins Residential Customer Group Don L. Keskey Brian W. Coyer Wal-Mart Stores East, LP Melissa M. Horne Administrative Law Judge Sharon Feldman Robert Kelter Environmental Law & Policy Center 3