May 18, Enclosed for electronic filing please find the Application in this matter. If you should have any questions, please kindly advise.

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1 Founded in 1852 by Sidney Davy Miller SHEI A. WELLMAN TEL (517) FAX (517) Miller, Canfield, Paddock and Stone, P.L.C. One Michigan Avenue, Suite 900 Lansing, Michigan TEL (517) FAX (517) May 18, 2018 MICHIGAN: Ann Arbor Detroit Grand apids Kalamazoo Lansing Troy FLOIDA: Tampa ILLINOIS: Chicago NEW YOK: New York OHIO: Cleveland CANADA: Windsor CHINA: Shanghai MEXICO: Monterrey POLAND: Gdynia Warsaw Wrocław Ms. Mary Jo Kunkle Executive Secretary Michigan Public Service Commission 6545 Mercantile Way, Ste 7 Lansing, MI e: Upper Peninsula Power Company MPSC Case No. U Dear Ms. Kunkle: Enclosed for electronic filing please find the Application in this matter. If you should have any questions, please kindly advise. Very truly yours, Miller, Canfield, Paddock and Stone, P.L.C. By: Sherri A. Wellman SAW/kf Enclosures cc: Gradon Haehnel

2 STATE OF MICHIGAN BEFOE THE MICHIGAN PUBLIC SEVICE COMMISSION * * * * * In the matter of the application of ) UPPE PENINSULA POWE COMPANY ) for authority to amend its street lighting tariffs ) Case No. U to provide expanded use of light emitting diode ) street lighting service and related approvals. ) APPLICATION Upper Peninsula Power Company ( UPPCO or the Company ), requests that the Michigan Public Service Commission ( MPSC or the Commission ) grant ex parte approval to amend the Company s ate Book for Electric Service ( Tariff ) to permit: (i) the expansion of its Light Emitting Diode ( LED ) street lighting and dusk to dawn area lighting service, and (ii) the replacement or conversion of existing Company-owned street and dusk to dawn area lighting from Sodium Vapor, Mercury Vapor, and Metal Halide fixtures to Company-approved LED units. In support of this Application, the Company respectfully represents as follows: 1. UPPCO is a Michigan corporation, with its principal offices located at 1002 Harbor Hills Drive, Marquette, Michigan, and is engaged as a public utility in the generation, purchase, distribution, and sale of electric energy in its service territory in the Upper Peninsula of Michigan. UPPCO serves certain cities, villages, and townships located in the counties of Alger, Baraga, Delta, Houghton, Iron, Keweenaw, Marquette, Menominee, Ontonagon, and Schoolcraft. 2. UPPCO rates and tariffs are subject to the jurisdiction of the MPSC pursuant to 1909 PA 106, as amended, MCL , et seq.; 1919 PA 419, as amended MCL et seq.; and 1939 PA 3, as amended, MCL et seq.

3 3. As described in greater detail below, UPPCO seeks to offer an additional dusk to dawn area lighting option to its Michigan electric customers in response to multiple customer requests for LED technology. 4. As shown in Attachment 1 hereto, proposed Tariff Sheets D and D-59.00, UPPCO seeks to add the following additional sections to the Z-3 and Z-4 tariffs: (a) Z-3 Dusk to Dawn Outdoor Security Lighting (Integrated) LED 9,000* 100* $18.08/Lamp 14,000* 150* $21.45/Lamp 27,000* 250* $25.24/Lamp * The wattages and lumens listed under the LED lamps are wattages and lumens of sodium vapor lamps to which the LED lamps are considered equivalent. Actual wattages and lumens of LED lamps may vary. If the equivalent wattages installed are not representative of tariff wattages listed, UPPCO will bill on the lower of the two options. For example, if a 400 Watt equivalent is installed, UPPCO will bill on the lower of the following the 400 Watt actual equivalent and the 250 Watt tariff listed equivalent. (b) Z-4 Dusk to Dawn Outdoor Security Lighting (Iron iver) LED 9,000* 100* $17.05/Lamp 14,000* 150* $21.45/Lamp 27,000* 250* $25.24/Lamp * The wattages and lumens listed under the LED lamps are wattages and lumens of sodium vapor lamps to which the LED lamps are considered equivalent. Actual wattages and lumens of LED lamps may vary. If the equivalent wattages installed are not representative of tariff wattages listed, UPPCO will bill on the lower of the two options. For example, if a 400 Watt equivalent is installed, UPPCO will bill on the lower of the following the 400 Watt actual equivalent and the 250 Watt tariff listed equivalent. 2

4 5. The monthly lamp charges that UPPCO is proposing to include in its Z-3 and Z-4 rates are equal to the existing LED tariff rates included in the Company s current SL-6 tariff, supported by the cost of service study and Commission Order in UPPCO s most recent general rate case, U In its next general rate proceeding, UPPCO intends to revisit its portfolio of lighting tariffs, and consolidate them into a more streamlined, easily understandable tariff structure with updated monthly charges that are reflective of the energy and maintenance expense savings experienced by replacing traditional lighting fixtures with LED technology. Until such time that the Company has a Commission-approved cost of service study that is reflective of the cost savings associated with the transition to LED lighting fixtures, UPPCO contends that the currently approved LED rates for SL-6 are appropriate for use in the dusk to dawn outdoor security lighting tariff, and will result in a net decrease in charges to all street/security lighting customers. 6. The Company intends to move all customers that are scheduled to receive a LED replacement fixture, in place of their existing high-pressure sodium lights, to the lower LED rate coincident with the Commission s approval in this proceeding. Doing so will accomplish two primary objectives: First, any concerns pertaining to which customer receives an LED replacement first will be mitigated; all customers will receive the lower LED rate on day one, and, therefore, be indifferent to whether they receive the new LED fixtures in year one or year three. Second, this method will provide relief to any municipalities who are experiencing financial hardship, and choosing to remove public lighting service as a cost-saving measure. 7. In response to an increasing amount of customer requests, UPPCO intends to initiate a lighting fixture replacement program, whereby the Company will replace all of its Company-owned lighting fixtures from the current Sodium Vapor, Mercury Vapor, or Metal 3

5 Halide fixture to an equivalent LED fixture. LED lighting options are becoming an increasingly popular choice in outdoor lighting applications as LED lights provide significant advantages over traditional lighting options, such as decreased energy usage, decreased maintenance expense, and a longer useful life of the fixture. 8. The inclusion of an LED rate equivalent in Z-3 and Z-4 will provide for operational efficiencies as UPPCO proceeds with its fixture replacement program. By allowing the Company to replace all fixtures residing within the established cyclical maintenance polygons, regardless of rate category, the lighting fixture replacement project plan can be executed in a manner that minimizes employee hours, vehicle expense and mileage, and warehouse inventory overhead thereby minimizing costs for customers. Unlike traditional lighting options, which require periodic replacement of bulbs and other maintenance, LED equivalent fixtures do not require significant expense related to maintenance. Therefore, in addition to requiring less electrical energy to provide an equivalent amount of light, LED fixtures provide for a longer life, and thus greater energy cost savings. Current market evaluation suggests that the incremental savings associated with decreased energy usage and maintenance cost savings outweigh the upfront capital cost of the LED fixtures over the life of the asset. 9. UPPCO anticipates that a large-scale conversion of its existing fixtures (approximately 6,500 in SL-6; 1,500 in Z-3, and 200 in Z-4) to LED will occur as soon as spring of UPPCO s current lighting fixture maintenance program operates on a five-year cycle, meaning that the Company replaces a bulb and performs other necessary maintenance to onefifth of the all Company-owned lighting fixtures each year. By prioritizing the conversion to LED fixtures consistent with the required maintenance schedule of the existing lights, UPPCO intends to systematically progress through the entirety of its lighting assets, replacing those with 4

6 imminent maintenance requirements first, thereby mitigating any instances of replacing a fixture that has recently received a new bulb and maintenance, and preventing any future issues by extending the maintenance interval of a particular asset beyond its expected useful life. 10. The Power Supply Cost ecovery ( PSC ) mechanism will remain unchanged for its Z-3 and Z-4 tariff rates until the time of the Company s next general rate proceeding. UPPCO intends to revisit its portfolio of lighting tariffs, and consolidate them into a more streamlined, easily understandable tariff structure with updated monthly charges that are reflective of the energy and maintenance expense savings experienced by replacing traditional lighting fixtures with LED technology. 11. The Energy Waste eduction ( EW ) surcharge mechanism will remain unchanged for its Z-3 and Z-4 tariff rates until the time of the Company s next general rate proceeding. UPPCO intends to revisit its portfolio of lighting tariffs, and consolidate them into a more streamlined, easily understandable tariff structure with updated monthly charges that are reflective of the energy and maintenance expense savings experienced by replacing traditional lighting fixtures with LED technology. 12. UPPCO represents that the approval applied for herein is reasonable in that it will not increase existing rates or costs of service to existing ratepaying customers. 13. Because approval of this Application will not result in an increase in existing rates to current or future ratepaying customers, UPPCO requests the Commission to grant ex parte approval of this Application as soon as practicable to allow the Company to meet the needs and desires of its existing and future customers without the time and expense of notice and a hearing. 5

7 WHEEFOE, Upper Peninsula Power Company requests that this Commission: A. Approve the Application; B. Authorize UPPCO the addition of the 100, 150, and 250 watt equivalent LED fixture monthly charges to the Z-3 and Z-4 tariff, and approve the tariff sheets attached hereto as Attachment 1; C. Grant such other and further relief and authorizations as may be lawful and proper. espectfully submitted, UPPE PENINSULA POWE COMPANY Dated: May 18, 2018 By: Its Attorney Sherri A. Wellman (P38989) MILLE, CANFIELD, PADDOCK AND STONE, PLC One Michigan Avenue, Suite 900 Lansing, MI (517) Attorney for Upper Peninsula Power Company 6

8 ATTACHMENT 1

9 UPPE PENINSULA POWE COMPANY MPSC Vol No 8-ELECTIC 7th ev. Sheet No. D eplaces 6th ev. Sheet No. D D2. Dusk To Dawn Outdoor Security Lighting Z-3 WHO MAY TAKE SEVICE: Any customer for dusk to dawn outdoor security lighting where customer takes service at the same premises under a standard rate schedule. Additions to mercury vapor lighting services are closed to new customers. TEITOY APPLICABLE All territory served in the Company's Integrated System. HOUS OF SEVICE: Daily from dusk to dawn. CHAACTE OF SEVICE: Single-phase, alternating current, 60 hertz, nominally at 120 volts. ATE: Sodium Vapor 9, $21.71/Lamp 27, $33.27/Lamp 45, $40.26/Lamp Mercury Vapor 7, $19.26/Lamp 20, $35.96/Lamp Metal Halide 36, $39.99/Lamp 110,000 1,000 $73.62/Lamp LED 9,000* 100* $18.08/Lamp 14,000* 150* $21.45/Lamp 27,000* 250* $25.24/Lamp SPECIAL TEMS AND CONDITIONS The above charges are for lighting on existing company-owned distribution facilities. The Company will own and install the luminaire, complete with lamp, control device and up to and including a 6-foot mast arm, mounted on an existing company pole. If the customer requests a mast arm in excess of 6 feet it will be considered special facilities. If the customer requests an additional pole and span, the monthly charges listed below shall be added to the above charges. Type of Facility Additional Wood Pole Span of Conductor (200 feet) Monthly Charge $4.51/pole $3.26/span * The wattages and lumens listed under the LED lamps are wattages and lumens of sodium vapor lamps to which the LED lamps are considered equivalent. Actual wattages and lumens of LED lamps may vary. Continued on Sheet No. D Issued: XX-XX-18 By G Haehnel Director - egulatory Affairs Marquette, Michigan Effective for Service On and After: XX-XX-18 Issued Under Auth. of Mich Public Serv Comm Dated: XX-XX-18 In Case No: U-XXXXX

10 UPPE PENINSULA POWE COMPANY MPSC Vol No 8-ELECTIC 7th ev. Sheet No. D eplaces 6th ev. Sheet No. D D2. Dusk To Dawn Outdoor Security Lighting Z-4 WHO MAY TAKE SEVICE: Any customer for dusk to dawn outdoor security lighting where customer takes service at the same premises under a standard rate schedule. Additions to mercury vapor lighting services are closed to new customers. TEITOY APPLICABLE: All territory served in the Company's Iron iver District. HOUS OF SEVICE: Daily from dusk to dawn. CHAACTE OF SEVICE: Single-phase, alternating current, 60 hertz, nominally at l20 volts. ATE: Sodium Vapor 9, $17.05/Lamp 27, $30.72/Lamp 45, $32.28/Lamp Mercury Vapor 7, $17.59/Lamp Metal Halide 36, $32.13/Lamp 110,000 1,000 $54.71/Lamp LED 9,000* 100* $17.05/Lamp 14,000* 150* $21.45/Lamp 27,000* 250* $25.24/Lamp SPECIAL TEMS AND CONDITIONS The above charges are for lighting on existing company-owned distribution facilities. The Company will own and install the luminaire, complete with lamp, control device and up to and including a 6-foot mast arm, mounted on an existing company pole. If the customer requests a mast arm in excess of 6 feet it will be considered special facilities. If the customer requests an additional pole and span, the monthly charges listed below shall be added to the above charges. Type of Facility Additional Wood Pole Span of Conductor (200 feet) Monthly Charge $4.51/pole $3.26/span * The wattages and lumens listed under the LED lamps are wattages and lumens of sodium vapor lamps to which the LED lamps are considered equivalent. Actual wattages and lumens of LED lamps may vary. Continued on Sheet D Issued: XX-XX-18 By G Haehnel Director egulatory Affairs Marquette, Michigan Effective for Service On and After: XX-XX-18 Issued Under Auth. of Mich Public Serv Comm Dated: XX-XX-18 In Case No: U-XXXXX