Energy-Intensive Industrial Rates Workgroup Information Session Steve Bakkal Michigan Energy Office Michigan Economic Development Corporation March 24, 2014

Objective: Develop non-legislative options that can reduce electric rates for energy intensive companies, abiding by existing policies and cost-of-service principals.

Process: Establish a workgroup consisting of a manageable number of stakeholders selected through an open, transparent process that develops, analyzes, and reports various options.

Deliverable – Inform Decision Makers: A final report of options that will be used to inform the Governor, legislative staff, MPSC, and stakeholders. This report will detail how various options will impact all ratepayers and their potential implementation methods and timelines. Final report will be issued by the workgroup and should not be construed as being reviewed or approved by MPSC commissioners

Workgroup Scope Workgroup is not replacing existing regulatory process or procedures. Cost allocation, rate design, and other rate options that can be implemented without legislation.

The workgroup will be chaired by Steve Bakkal (MEDC) and consist of participants representing: (2) Large utilities (1)Small utility (2) Legislature (house and senate staff) (2) MPSC staff (Up to 10) Energy intensive business customers representing broad range of industries and geographic locations Workgroup Participants

Workgroup may choose to define specific usage characteristics, but companies will generally have the following in common: 1)Energy costs are significant portion of company's operating costs. This can apply for small and large users. 2)Energy costs are one of the top factors used for investment and location decision for that industry. Potential options developed could benefit a larger group, but should generally focus on the above. Definition of Energy-Intensive Business

Workgroup Selection Process Utility, legislative, and MPSC staff selected with direct outreach Business customers can nominate themselves or other businesses by 5pm March 31, Go to click on Workgroup, scroll down to Apply Now.

Workgroup Selection Process for Businesses Business customer nominees will be asked to submit the following information: Brief description of relevant experience/general knowledge of topics and the regulatory process. Knowledge of respective industry needs, challenges. Preference will be given to nominees recognized by multiple industry peers in addition to their business. Members selected will be contacted directly by April 2, Selections will also be posted on under the Workgroup page.

Commitment to meet with the workgroup bi-weekly on 9:00am in Lansing (preferred) or by phone starting April 7 th through end of May. Active participants at the meetings, offering suggestions and providing input from own company experience and industry peers. 4 workgroup meetings will be closed, but members are encouraged to get input from peers, associations, industry experts, etc. outside of meetings if necessary. Businesses Customer Participant Roles & Expectations

Timeframe March 24 th – Announce workgroup process, solicit businesses to serve on workgroup March 31 st – Deadline for business customer nominations April 2 nd – Workgroup members announced April 7 th * – First workgroup meeting, introduce participants, develop assignments April 21, May 5, May 19 th * – Additional workgroup meetings May 30 th – Draft options finalized by workgroup June 9 th – Draft report available online for stakeholder/public comment June 20 th – Comment period closed June 27 th – Final report issued* Closed meetings

Questions Steve Bakkal Michigan Economic Development Corporation