201 North Washington Square Suite 910 Lansing, Michigan Timothy J. Lundgren Direct: 616 /

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1 201 North Washington Square Suite 910 Lansing, Michigan 489 Telephone 517 / Fax 517 / Timothy J. Lundgren Direct: 616 / tjlundgren@varnumlaw.com April 20, 2018 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 W. Saginaw Highway P.O. Box 0221 Lansing, Michigan Re: MPSC Case No. U-1821 Dear Ms. Kale: Attached for electronic filing in the above-referenced matter, please find the Direct Testimony and Exhibit of Betsy Engelking on behalf of Geronimo Energy, as well as the Proof of Service. Thank you for your assistance in this matter. Sincerely yours, VARNUM TJL/kc Enclosures c. ALJ All parties of record. Timothy J. Lundgren Grand Rapids Detroit Novi Kalamazoo Grand Haven Lansing Ann Arbor Hastings

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own ) motion, regarding the regulatory reviews, ) revisions, determinations, and/or approvals ) Case No. U-1821 necessary for Consumers Energy Company ) to fully comply with Public Act 295 of 2008 ) ) DIRECT TESTIMONY OF BETSY ENGELKING ON BEHALF OF GERONIMO ENERGY

3 BETSY ENGELKING DIRECT TESTIMONY 1 2 Q. Please state your name and business address. A. My name is Betsy Engelking. My business address is 7650 Edinborough Way, Suite 725, Edina, MN Q. By whom and in what capacity are you employed? A. I am currently Vice President of Strategy and Policy for Geronimo Energy, LLC. Geronimo is a wind and solar energy developer operating in Michigan, along with other states in the upper Midwest and elsewhere Q. Please describe your educational background and business experience. A. I obtained a BS in biology from the College of William and Mary in Virginia, and a MBA in finance and economics from the Carlson School of Business at the University of Minnesota. I spent ten years as a principal adviser to the Minnesota Public Utilities Commission, working on issues such as utility rates, energy efficiency, integrated resource planning, renewable energy standards and competitive markets. Thereafter, I joined Great River Energy, a large G&T Cooperative, where I worked on Transmission Service Agreements and later managed GRE s Resource Planning and Acquisition group. Prior to joining Geronimo, I served as Director of Resource Planning and Bidding for Xcel Energy, a large investor-owned utility with operating companies in the upper Midwest, Colorado and the Southwest

4 BETSY ENGELKING DIRECT TESTIMONY Q. Please describe your job responsibilities. A. As VP of Strategy and Policy, I lead Geronimo s legislative and regulatory efforts at both the state and federal level. I also direct the analysis of markets and programs to develop strategies for growth, and assist with energy sales and contract negotiation Q. Have you previously testified before the Michigan Public Service Commission? A. No. However, over my career I have testified on utility and energy matters in over 100 proceedings before the Minnesota Public Utilities Commission, the North Dakota Public Service Commission, the South Dakota Public Utilities Commission, the Colorado Public Utilities Commission and the Federal Energy Regulatory Commission Q. On whose behalf are you submitting your testimony in this proceeding? A. I am submitting testimony on behalf of Geronimo Energy, LLC Q. What is the purpose of your testimony? A. The purpose of my testimony is to discuss the reasonableness of Consumers Energy s Renewable Energy Plan and the relationship between the plan and Qualifying Facilities ( QFs ) from which Consumers will be required to purchase energy and capacity pursuant to the Public Utilities Regulatory Policy Act ( PURPA ) Q. Are you sponsoring any exhibits? A. Yes, I am sponsoring the following exhibit: Exhibit GER-1 (BE-1), Consumers Discovery Response CCR-CE-54 2

5 BETSY ENGELKING DIRECT TESTIMONY 1 2 Q. Based on your evaluation of Consumers Renewable Energy Plan, do you believe that Consumers has demonstrated that its plan to construct and own 575 MW of new wind and 100 MW of new solar is reasonable? A. No. According to its response to Cypress Creek s data request 1821-CCR-CE-5, which I have attached as Exhibit GER-1 (BE-1), Consumers has not evaluated the availability and cost of utilizing additional third party unbundled RECs, especially those RECs generated by QFs that are already selling capacity and energy to the Company under PURPA, to meet its renewable energy credit portfolio standard. The failure to consider this important source of RECs raises questions as to whether the costs of Consumers plan are reasonable Q. Has Geronimo publicly proposed any solar energy development projects in Consumers service territory? A. Yes. Geronimo has proposed six solar projects in Consumers service territory: Q. Have you communicated to Consumers your intent to sell energy and capacity the utility during the period covered by this Renewable Energy Plan, i.e., though 2029? A. Yes. We sent letters to Consumers regarding our intent provide the output of four solar generating projects, all of which are certified PURPA QFs, pursuant to the utility s obligations to purchase under PURPA and state law. Those letters were sent on December 1, We sent letters to Consumers on the remaining two projects on February 22,

6 BETSY ENGELKING DIRECT TESTIMONY Q. Does Geronimo intend to make the Renewable Energy Credits from these projects available for purchase by Consumers? A. Yes. We expect that there will be approximately 190,000 RECs available annually to Consumers to purchase from these projects and we have explicitly offered those to Consumers Q. Where are the proposed locations of these projects? A. The projects are located in the following counties: Bingham Solar Clinton County Temperance Solar Monroe County White Pine Solar St Joseph County Burlington Solar Branch County Sandstone Creek Solar Eaton County Genesee Solar Genesee County Q. Does the sale of power and renewable energy credits from these facilities encourage private investment in the state by Geronimo? A. Yes. Geronimo intends to invest approximately $140 million in the state to develop the six projects Q. Will the purchase of renewable energy credits help Consumers diversify the resources used to reliably meet the energy needs of consumers in this state? A. Yes. These RECs will be generated from solar projects that will also be delivering energy and capacity to Consumers. The purchase will diversify the resources from both a fuel standpoint and an economic standpoint, in that it will introduce resources into the 4

7 BETSY ENGELKING DIRECT TESTIMONY 1 2 Renewable Energy Plan that are owned and operated by third parties rather than the utility Q. Who will undertake the operational and performance risks if Consumers enters into PPAs for the power and RECs from these facilities? A. The owner and operator of the generating facility ordinarily is subject to the risks of operational failure. That is one of the advantages of an independently owned and operated generating facility over one which is owned and operated by the public utility. With independently owned facilities, ratepayers are much more insulated from risk than they are when the utility owns and operates the generating facilities, as Consumers has proposed to do here Q. In your experience with PURPA contracts, do ratepayers pay any risk premium for purchasing under a PURPA PPA, such as the 10.7% return that the utility receives for the risks it takes when it invests in its own projects? A. No. PURPA PPAs allow for energy and capacity sales at no more than the utility s avoided cost; that is, the cost that they would have paid for the energy and capacity from other sources but for the availability of the QF Q. How will ratepayers benefit from Consumers purchasing RECs from Geronimo s QFs rather than building new utility-owned renewables? A. Consumers notes that its purpose for procuring new renewables is for the most part to obtain the RECs needed to meet its expanded renewable energy standard. Ratepayers 5

8 BETSY ENGELKING DIRECT TESTIMONY should not have to pay for the construction of new facilities for this purpose when lowcost RECs are already available from QFs that are selling capacity and energy to Consumers. Purchasing QF RECs will result in a lower RPS compliance cost and will avoid over-procurement of capacity and energy in order to obtain sufficient RECs to meet the RPS Q. What recommendations do you make regarding Consumers Renewable Energy Plan? A. I recommend that Consumers be required to evaluate the availability and likely cost of purchasing unbundled RECs, in particular from QFs proposing to operate in its service territory, to determine whether this strategy would improve the cost and risk profile of its Renewable Energy Plan Q. Does this conclude your testimony? A. Yes it does _.docx 6

9 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own ) motion, regarding the regulatory reviews, ) revisions, determinations, and/or approvals ) Case No. U-1821 necessary for Consumers Energy Company ) to fully comply with Public Act 295 of 2008 ) ) EXHIBIT OF BETSY ENGELKING ON BEHALF OF GERONIMO ENERGY

10 MPSC Case No. U-1821 Exhibit GER-1 (BE-1) Page 1 of CCR-CE-54 Question: 4. Please provide a copy of all documents, if any, wherein Consumers evaluated the purchase of renewable energy credits from PURPA qualifying facilities to comply with the Michigan renewable energy credit portfolio standard. Response: The Company forecasts the procurement of 80% of the Renewable Energy Credits (RECs) produced by PURPA qualifying facilities with existing contracts through the term of the existing contracts. The RECs from existing PURPA contracts that the Company expects to receive are included in lines 9 through 21 of Exhibit A-9 (YFK-4, Revised 0/2018). Attachment 1 entitled Estimated Renewable Energy Credits Available from Existing Counterparties shows the estimated quantity of RECs available in Michigan for years 2017 through 200 from entities with which the Company has contracted for the purchase of renewable energy. The RECs shown in the attachment represent the estimated amount of RECs available from each supplier (in excess of the amount currently under contract to the Company) during and after the completion of their existing contract, as applicable. I am not aware of any other evaluation that the Company has completed for the purchase of RECs from other PURPA qualifying facilities to comply with the Michigan renewable energy credit portfolio standard. Keith G. Troyer April 16, 2018 Transactions and Wholesale Settlements

11 1821 CCR CE 054 Attachment 1 CONSUMERS ENERGY COMPANY Estimated Renewable Energy Credits Available from Existing Counterparties MPSC Case No. U-1821 Exhibit GER-1 (BE-1) Page 2 of Sources RECs RECs RECs RECs RECs RECs RECs RECs RECs RECs RECs RECs RECs RECs Adrian 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 2,00 17,800 Beebe Black River 400,00,00,00,00,00,00,00,00,00,00,00,00,00 Brook View Dairy Cadillac 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 17,000 17,000 Beaverton ,100 2,100 2,100 2,100 2,100 2,100 2,100 Irving LaBarge 500 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 Middleville Elk Rapids GRS 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 12,800 Genesee 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 Grand Blanc 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 22,700 Pinconning 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 18,100 18,100 18,100 Byron Center,000,000,000,000,000,000,000,000,000 2,900 2,900 2,900 2,900 2,900 Ottawa,800,800,800,800,800,800,800,800,800,800,800,800,800 0,200 Seymour 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Grayling 16,200 16,200 16,200 16,200 16,200 16,200 16,200 16,200 16,200 16,200 16, , , ,600 Grenfell ,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 Harvest II Garden Stoney Corners Ph 2 Stoney Corners Ph Hillman 1, , , , , , , , , , , , , ,000 Kent 12,800 12,800 12,800 12,800 12, , , , , , , , , ,900 Michiana Michigan Wind 2 Lennon Peoples 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Cascade 1,000 1,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Fallasburg 600 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 Morrow ,500,500,500,500,500,500,500,500,500,500,500 Filer City,100,100,100 Ada 800 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 Lincoln 15,200 15, ,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 120,00 McBain 14,000 14,000 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 11,700 White's Bridge 450,600,600,600,600,600,600,600,600,600,600,600,600,600 Venice Park 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 11,900 11,900 11,900 11,900 Pine Tree Acres 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 Northern Oaks 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 Zeeland 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 Total 141, , , , , , , , , , ,900 77, ,200 91,100 Cumulative 141, , ,50 1,400,100 1,890,850 2,469,700,048,550,629,150 4,209,750 4,811,250 5,42,150 6,160,50 7,018,550 7,949,650

12 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own ) motion, regarding the regulatory reviews, ) revisions, determinations, and/or approvals ) Case No. U-1821 necessary for Consumers Energy Company ) to fully comply with Public Act 295 of 2008 ) ) PROOF OF SERVICE STATE OF MICHIGAN ) ) ss. COUNTY OF INGHAM ) Kimberly Champagne, the undersigned, being first duly sworn, deposes and says that she is a Legal Secretary at Varnum LLP and that on the 20th day of April, 2018, she served a copy of the Direct Testimony and Exhibit of Betsy Engelking on behalf of Geronimo Energy upon those individuals listed on the attached Service List via at their last known addresses. Kimberly Champagne

13 SERVICE LIST MPSC CASE NO. U-1821 Administrative Law Judge Hon. Sharon L. Feldman Administrative Law Judge Michigan Public Service Comm W. Saginaw Highway, rd Floor Lansing, MI Counsel for Consumers Energy Company Gary A Gensch Jr. Anne M. Uitvlugt One Energy Plaza EP Jackson, MI Gary.genschjr@cmsenergy.com Anne.uitvlugt@cmsenergy.com mpsc.filings@cmsenergy.com Counsel for MPSC Staff Amit T. Singh Spencer Sattler 7109 W. Saginaw Highway, rd Floor Lansing, MI sattlers@michigan.gov singha9@michigan.gov Counsel for Cadillac Renewable Energy, LLC, Genesee Power Station LP, Grayling Generating Station LP, Hillman Power Company, LLC, TES Filer City Station LP, Viking Energy of Lincoln, Inc. and Viking Energy of McBain, Inc. Thomas J. Waters Aaron L. Davis Anita G. Fox Fraser Trebilcock Davis & Dunlap, P.C. 124 West Allegan Street, Suite 1000 Lansing, Michigan 489 twaters@fraserlawfirm.com adavis@fraserlawfirm.com afox@fraserlawfirm.com Counsel for Michigan Environmental Council Christopher M. Bzdok Tracy Jane Andrews Lydia Barbash-Riley Olson, Bzdok & Howard, P.C. 420 E. Front Street Traverse City, MI chris@envlaw.com tjandrews@envlaw.com lydia@envlaw.com karla@envlaw.com kimberly@envlaw.com marcia@envlaw.com Counsel for Midland Cogeneration Venture, LP Jason Hanselman Richard Aaron Dykema Gossett PLLC Capitol View 201 Townsend Street, Suite 900 Lansing, MI 489 jhanselman@dykema.com raaron@dykema.com Counsel for Great Lakes Renewable Energy Association Don L. Keskey Brian W. Coyer Public Law Resource Center PLLC University Office Place Albert Avenue, Suite 425 East Lansing, MI 4882 donkeskey@publiclawresourcecenter.com bwcoyer@publiclawresourcecenter.com Counsel for Cypress Creek Renewables, LLC Jennifer Utter Heston, Esq. Fraser Trebilcock Davis & Dunlap, P.C. 124 West Allegan, Suite 1000 Lansing, MI jheston@fraserlawfirm.com

14 Counsel for Environmental Law & Policy Center Margrethe Kearney Environmental Law & Policy Center 1514 Wealthy Dr. SE, Ste. 256 Grand Rapids, MI Bradley Klein Jeffrey Hammons Environmental Law & Policy Center 5 E. Wacker Drive, Suite 1600 Chicago, IL bklein@elpc.org jhammons@elpc.org Counsel for Invenergy Renewables, LLC Brandon C. Hubbard Nolan J. Moody Dickinson Wright PLLC 215 South Washington Square, Suite 200 Lansing, MI 489 bhubbard@dickinsonwright.com nmoody@dickinsonwright.com Kristin Field, Legal Assistant Environmental Law & Policy Center kfield@elpc.org

201 North Washington Square Suite 910 Lansing, Michigan April 5, 2019

201 North Washington Square Suite 910 Lansing, Michigan 48933 Telephone 517 / 482-6237 Fax 517 / 482-6937 www.varnumlaw.com Timothy J. Lundgren tjlundgren@varnumlaw.com April 5, 2019 Ms. Kavita Kale Executive