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STATE OF MICHIGAN
Jennifer M. Granholm DEPARTMENTOF LABOR ECONOMIC
ENERGY. & GROWTH STANLEY "SKIP' PRUSS
GOVERNOR PUBLIC SERVICE COMMISSION DIRECTOR
Monica Martinez Ojiakor N. lsiogu Steven A. Transeth
COMMISSIONER OF MICHIGAN
STATE CHAIRMAN COMMISSIONER
Jennifer M. Granholm DEPARTMENT OF ENERGY, LABOR & ECONOMIC GROWTH STANLEY “SKIP” PRUSS
GOVERNOR PUBLIC SERVICE COMMISSION DIRECTOR
Monica Martinez Orjiakor N. Isiogu Steven A. Transeth
COMMISSIONER CHAIRMAN COMMISSIONER

April 14,2009 May 17, 2010

Mr. Loren H. Howard, P.E.
General Manager
Holland In the matter of the application of
Board of Public Works 1
625 Hastings Avenue
CMS ENERGY RESOURCE 1
Michigan 49423
Holland,MANAGEMENT COMPANY )
for approval of a renewable energy plan )
Dear Mr. Howard: with the requirements of
to comply 1
Public Act 295 of 2008. 1
In response to your April 1, 2010, Power Supply Study (Electric Generation Alternatives
Analysis) and April 16, 2010, Supplemental Analysis submittals to the Michigan Public Service
Commission (MPSC) Docket Number U-16077, please find the attached second set of MPSC
Staff ofthe Electric for additional information.
Staff questions and requests Reliability Division have reviewed CMS Energy's application and agree that
CMS Energy does not have retail customers in Michigan, has no affected parties to notify, and is
Please submit your responsesrenewable energy plan. I, therefore, recommend that the Commission find
not required to file a to these questions to MPSC Docket Number U-16077 within 14
days. If you have Enegy is in compliance with the matter, please Act 295 and order CMS Energy to
that CMS any questions or concerns on thisrequirements ofcontact Mr. Steve Kulesia at
(517) 335-4558application for approval of a(517) 241-9338. plan in the event CMS Energy begins
file an or Ms. Shannon Whiton at renewable energy
sewing retail customers in Michigan.
Sincerely,
Sincerely,

Paul Proudfoot, Director
Electric Reliability Division
Michigan Public Service Commission
cc: Shatina Clinton
Enclosure

cc: Mr. Steven Kulesia, MPSC
Ms. Shannon Whiton, MPSC
Mr. G. Vinson Hellwig, MDEQ
Ms. Mary Ann Dolehanty, MDEQ
DELEG is an equal opportunity employerlprogram.
Auxiliary aids, selvices and other reasonable accommodations are available upon request to individuals with disabilities.

-
6545 MERCANTILE WAY P.O. BOX 30221 LANSING, MICHIGAN 48909
DELEG is an equal opportunity employer/program.
w.michigan.gov (517) 2414180
Auxiliary aids, services and other reasonable accommodations are available upon request to individuals with disabilities.

6545 MERCANTILE WAY • P.O. BOX 30221 • LANSING, MICHIGAN 48909
www.michigan.gov • (517) 241-6180
Michigan Public Service Commission (MPSC) Staff Questions regarding
Holland BPW Power Supply Study (Electric Generation Alternatives Analysis)
MPSC Docket No. U-16077

1. If the Michigan Climate Action Council goal of 2% energy reduction per year came to
fruition and became mandatory, how would this impact Holland’s power supply plan as
presented?

2. Please provide the “Peak Demand Adjusted for RAP DSM Savings” in Figure 3-5.

3. The following questions are with respect to Table 3-1, Forecast Results.

a. Explicitly state the algorithm used to develop Total MWh for years 2012-2030.
The current figures are such that the addition of Residential, C&I, Other, and
Future Additions does not equal Total MWh. Please explain this discrepancy.

b. Explicitly state the algorithm used to develop Required MWh for years 2012-
2030. The figures are such that the Total MWh adjusted for line losses does not
equal Required MWh. Please explain this discrepancy.

c. Please specify the method in which energy optimization measures were factored
into the load forecast. Were energy optimization effects included in Table 3-1?
Were energy optimization effects simply subtracted from the Required MWh for
the energy forecast and associated MW for the peak demand forecast?

4. The following questions are with respect to Holland response to Staff Question 15 in first
round of MPSC questions.

a. In Residential, Commercial & Industrial models, were independent variables with
two-tailed significance levels above the 5% level included in the final models? If
they were, were statistically insignificant independent variables tested for joint
significance? (i.e., - In the Residential Energy Sector model were CDD, HDD,
Per Capita Personal Income, and the Dummy Residential recession variables
tested for joint significance against a model with Residential Customers as the
only independent variable?)

b. What is the Durbin-Watson Statistic for the Residential Energy Sector model?

5. Please provide the data sets used to construct Residential, Commercial & Industrial
energy sector models. The data should include figures for all dependent and
independent variables.

6. Please provide the residuals for Residential, Commercial & Industrial energy sector
models. The residuals are the difference between actual historic consumption levels
and contemporaneous consumption levels estimated by the model.

7. Please explain in the Commercial & Industrial and Other energy sector models, why a
lagged dependent variable was used, rather than differencing or simple time trending,
was employed to address autoregressive characteristics within the time-series data.

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8. In addition to the net metering installations referred to in the response to Staff Question
38, have there been any additional inquiries regarding Holland BPW customer-
generated on-site electricity?

a. If yes, please provide a summary of the numbers of customers, dates inquiries
were made, and the type and size of electric generating technologies involved.

b. Does Holland BPW have a process for logging basic information about net
metering inquiries, through which it can confirm recent inquiries of this general
type?

9. In addition to the two net metering customers referred to in the response to Staff
Question 38, has Holland BPW received any additional customer inquiries about net
metering?

a. If yes, please provide a summary of the numbers of customers, dates inquiries
were made, and the type and size of electric generating technologies involved.

b. Does Holland BPW have a process for logging basic information about net
metering inquiries, through which it can confirm recent inquiries of this general
type?

10. Have there been any inquiries from renewable energy independent power producers
regarding the provision of renewable energy to Holland BPW?

a. If yes, please provide a summary of the numbers of inquiries, dates inquiries
were made, and type and size and proposed location of the electric generating
technologies involved

b. Does Holland BPW have a process for logging basic information about
independent power producer inquiries, through which it can confirm recent
inquiries of this general type?

11. Has Holland approached any renewable energy independent power producers to inquire
about purchasing renewable energy?

a. If yes, please provide a summary of the numbers of inquiries, dates inquiries
were made, and type and size and proposed location of electric generating
technology inquired about.

12. In Section 1.4 of the Power Supply Study, the findings conclude that Holland has more
than sufficient peaking resources at this time. Has Holland studied an alternative where
one or more peaking resources are paired with new wind generating facilities, or wind
and solar, to achieve a combined-resource production of electric generation that would
be similar to a single base load power supply resource?

13. Has Holland BPW conducted, or obtained from any other entity, any surveys or analyses
of the potential for hydroelectricity or hydrokinetic electricity production (that is, for
production with or without any dam or impoundment, including energy from waves or
currents), in or near Holland’s service territory? If yes, please provide a copy of the
surveys or analyses.

3
14. Figure 5-3 indicates biomass co-firing to be a lowest-cost renewable energy resource.
Please provide all information and analysis regarding biomass co-firing which Holland
has completed itself or obtained from others. Has Holland analyzed the option of co-
firing in quantities larger than what is anticipated in the current air emissions permit
application? If yes, please explain the results of that analysis.

15. In comparing Figures 5-3 and 5-4, it appears that as many as four renewable energy
options (biomass co-firing, landfill gas, new hydro, and onshore wind) are modeled as
being fully cost competitive or very nearly cost competitive compared to the lowest cost
fossil fuel options. Please describe Holland’s plans for maximizing its production and
use of all cost-effective renewable energy options, during the study period.

16. What assumptions are used for future costs of electricity from each renewable energy
resource and technology included in this Electricity Resource Plan assessment? For
each of the renewable energy resources that have been evaluated for this Electricity
Resource Plan, please provide the estimated or forecast cost of production of electricity
produced from systems entering commercial production each year during the planning
period.

17. On Page 100 of the Black and Veatch Energy Market Perspective, Attachment A, is a
statement that solar energy contributes only 20%, on average, of its nameplate capacity
value to meeting peak capacity needs. The report further states, “In application, this
factor will vary by region and by site.” Please provide all supporting documentation and
estimates or calculations of the solar energy capacity contribution to meeting peak
demands in the Holland BPW service territory.

18. In Holland BPW’s response to Staff Question 42, Holland BPW indicates it “has
considerable investments (up to 10.4 megawatts) in landfill gas generation based
PPAs.” Are these the same PPA’s discussed in Holland BPW’s response to Staff
Question 34?

19. In Holland BPW’s response to Staff Question 34, current operating agreements (PPA’s)
are mentioned, between Holland BPW and North American Natural Resources, Granger
and CMS-Grayling. Please provide details for each of those agreements, and any other
recent PPA’s, including:

a. The location of the renewable energy systems.

b. The quantities of power and/or energy provided through each PPA.

c. The price structure for each agreement.

d. Please also provide a copy of each PPA.

20. In Holland BPW’s response to Staff Question 35, a PPA with NANR is discussed. Is this
the same PPA discussed in the answer to Question 34, or is it another, new PPA? If it is
not the same PPA discussed in the answer to Question 34, please provide the following
information about that PPA:

a. What is the location of the renewable energy facility(ies)?

4
b. Holland BPW indicates this PPA is for an amount of capacity “4.8 and 6.4
megawatts of landfill gas generation.” Please explain how the delivered capacity
will be determined.

c. Please provide a copy of this PPA.

21. In Holland BPW’s response to Staff Question 41, a biomass energy survey is discussed.
Regarding that survey, please answer:

a. Did Holland BPW use a request for proposals process or a bid process for
selecting the contractor to undertake this study? If yes, please provide a copy of
the RFP or bid request document.

b. Who is the contractor selected to complete this study? Please provide a copy of
the contract.

c. Please provide a copy of the work plan for the study.

d. How will biomass fuel prices be estimated?

e. What biomass resources are being included in this survey?

f. When will the survey be completed?

22. In Holland BPW’s response to Staff Question 43, fuel options for the proposed CFB unit
are discussed, including “biomass (up to 30% by heat input) and wastewater treatment
biosolids (up to 20% by heat input).” When considering the operations of the proposed
CFB unit, please answer:

a. Are these possible fuel mixtures possibly additive? That is, can both biomass
and wastewater treatment biosolids be blended at the same time? Or, are they
mutually exclusive at any particular time? That is, can one or the other be used
at a given time, but not both?

b. What price has Holland BPW assumed for the biomass fuel?

c. What price has Holland BPW assumed for the wastewater treatment biosolids?

d. What is/are the expected source(s) for wastewater treatment biosolids?

e. What is Holland BPW’s plan for optimizing the blending of these renewable fuels
in the proposed CFB unit?