MEGA Electric Utility Tariff Measures For Large Industrial

MEGA Electric Utility Tariff Measures For Large Industrial Customers James A. Ault, President Michigan Electric & Gas Association 110 W. Michigan Avenue, Suite 375 Lansing, MI 48933 517. 484. 7730

MEGA Board of Directors

Michigan Electric & Gas Association (MEGA)

Basic Industrial Tariff Offerings �Time of Use / Peak – Off Peak �Interruptible Service (Curtailment) �Capacity Buyback / Demand Response �Market Pricing Options �Economic Development Rider �Load Retention Contract �Special Contracts

Industrial Tariff Business Issues �Utility in position of offering favorable options to certain customers vs others �Industrial processes limit ability of customer to use interruptible rates �Customer concern with impact of interruptions on work in progress �Legal and regulatory limits on cross subsidies (e. g. Michigan cost of service law – 2008)

Alpena Power Company �Large Industrial Service tariff �Alternate Energy Manufacturing Service �Facility closed 6 or more months �Hemlock variety targeted special contract �Special Power Contracts �Allowed per Tariff �MPSC approval required

Indiana Michigan Power (AEP) �Contract Service Interruptible Power CS-IRP � No MI customers � Buy through option at market prices �Demand Response Service DRS – Indiana � DRS-1 PJM emergencies � DRS-2 curtailment at market price � DRS-3 ancillary markets – few takers �Economic Development Rider EDR � Customer who qualifies given reduced billing demand � 10 new jobs demonstrated (Indiana) � Not presently effective in Michigan (cross subsidy issues)

Xcel Energy (NSP – Wisconsin) �Large Industrial Service MI-1 �Peak Controlled Time of Day MPC 1 �Experimental Market-Based and Real Time Pricing CMP-1; RTP-1 (Wisconsin)

Wisconsin Public Service �Cp-1 M Large Industrial Service �Cp-I 2 M Interruptible Rider (emergency or economic) �Cp-ND Next Day � 1 year term � Pricing for critical (5 days/yr), peak (100), mid-economy (100) and economy (200)pe �OPE Online Power Exchange � Customer load reduction offers �RTMP Real Time Market Pricing (Wisconsin) � Non-firm � LMP + MISO + $10 m. Wh

We Energies �General Primary – Time of Use Cp-1 �General Primary – Interruptible Cp-2 �General Primary – Curtailable Cp-3 �Experimental Dollars for Power DFP �Credits for load reduction �Market prices for curtailment �Experimental Power Market Incentives PMI

Upper Peninsula Power Company �Large Industrial Rate Cp-U �Capacity Buyback Rider Cp-1 B �Interruptible Rider Cp-I �Real Time Market Pricing RTMP

Wisconsin Contract Service Tariff CST �Wis. Stat. 196. 192 �Requires a market compensation option for interruptions �Also contract market pricing options �Allow customers to gain market benefits subject to market risks �PSCW must determine there is no harm to either utility shareholders or other customers