S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * *

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1 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter on the Commission s own motion, ) to consider changes in the rates of all the Michigan ) rate-regulated electric, steam and natural gas utilities ) to reflect the effects of the federal Tax Cuts and Jobs ) Case No Act of 2017: NORTHERN STATES POWER ) COMPANY (Electric) files an application for ) determination of Credit A as described in order ) U ) ) At the May 30, 2018 meeting of the Michigan Public Service Commission in Lansing, Michigan. PRESENT: Hon. Sally A. Talberg, Chairman Hon. Norman J. Saari, Commissioner Hon. Rachael A. Eubanks, Commissioner ORDER APPROVING REVISED SETTLEMENT AGREEMENT On February 22, 2018, the Commission issued an order in Case No. U directing certain utilities, including Northern States Power Company, a Wisconsin corporation (NSP-W), to file no later than March 30, 2018, an application to address going-forward adjustments to its Michigan electric base rates to reflect the reduction in the federal corporate tax rate arising from the Tax Cuts and Jobs Act of 2017 (TCJA). On March 26, 2018, NSP-W filed its application with supporting testimony and exhibits representing that TCJA benefits of $513,313 were included in the settlement agreement filed in Case No. U NSP-W further represented that the settled TCJA benefits in Case No. U included Credit A reductions.

2 A prehearing conference was held on April 18, 2018, before Administrative Law Judge Lauren VanSteel (ALJ). At the prehearing conference, the ALJ granted intervenor status to the Michigan Department of Attorney General. The Commission Staff also participated in the proceeding. Subsequently, the parties submitted a revised settlement agreement resolving all issues in the case. The parties agreed that the $513,313 TCJA benefits approved in Case No. U include NSP-W s electric base rate revenue requirement reduction associated with Credit A and Calculation C. The Commission has reviewed the revised settlement agreement and finds that the public interest is adequately represented by the parties who entered into the revised settlement agreement. The Commission further finds that the revised settlement agreement is in the public interest, represents a fair and reasonable resolution of the proceeding, and should be approved. THEREFORE, IT IS ORDERED that: A. The revised settlement agreement, attached as Exhibit A, is approved. B. The Commission s April 12, 2018 order in Case No. U reflects Tax Cut and Jobs Benefits Act of 2017 benefits inclusive of Credit A, and no adjustment is required to the tariff sheets attached to that order. C. Within 60 days from the date of this order and consistent with the Commission s February 22, 2018 order in Case No. U-18494, Northern States Power Company shall file, in a new docket, its Credit B contested case proceeding and shall triple caption to include Case Nos. U and U D. By October 1, 2018, consistent with the Commission s February 22 order in Case No. U and with the settlement agreement approved in Case No. U-18462, Northern States Page 2 U-20108

3 Power Company shall file, in a new docket, a contested case proceeding for review of its Credit A and Calculation C and shall triple caption that filing to include Case Nos. U and U The Commission reserves jurisdiction and may issue further orders as necessary. Any party desiring to appeal this order must do so in the appropriate court within 30 days after issuance and notice of this order, pursuant to MCL To comply with the Michigan Rules of Court s requirement to notify the Commission of an appeal, appellants shall send required notices to both the Commission s Executive Secretary and to the Commission s Legal Counsel. Electronic notifications should be sent to the Executive Secretary at mpscedockets@michigan.gov and to the Michigan Department of the Attorney General - Public Service Division at pungp1@michigan.gov. In lieu of electronic submissions, paper copies of such notifications may be sent to the Executive Secretary and the Attorney General - Public Service Division at 7109 W. Saginaw Hwy., Lansing, MI MICHIGAN PUBLIC SERVICE COMMISSION Sally A. Talberg, Chairman By its action of May 30, Norman J. Saari, Commissioner Kavita Kale, Executive Secretary Rachael A. Eubanks, Commissioner Page 3 U-20108

4 EXHIBIT A STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION ***** In the matter on the Commission s own ) motion, to consider changes in the rates ) of all the Michigan rate-regulated ) electric, steam and natural gas utilities ) Case No. U to reflect the effects of the federal Tax ) Cuts and Jobs Act of 2017: ) NORTHERN STATES POWER COMPANY (Electric) ) files an application for determination of Credit A ) as described in order U ) REVISED SETTLEMENT AGREEMENT As provided in 78 of the Administrative Procedures Act of 1969 ( APA ), as amended, MCL , and Rule 431 of the Rules of Practice and Procedure Before the Commission, Mich Admin Code, R , Northern States Power Company, a Wisconsin corporation ( NSP- W or the Company ) and the Michigan Public Service Commission ( MPSC or the Commission ) Staff ( Staff ), and Attorney General Bill Schuette ( Attorney General ), hereby agree as follows: 1. On February 22, 2018, the Commission issued an order in Case No. U ( February 22 Order ), directing NSP-W to file no later than March 30, 2018, an application and supporting direct case to address going-forward adjustments to its Michigan electric base rates to reflect the reduction in the federal corporate tax rate arising from the Tax Cuts and Jobs Act ( TCJA ), hereafter referred to as Credit A. 2. On March 22, 2018, NSP-W electronically filed with the Commission in the electronic docket for MPSC Case No. U Settlement Agreement resolving all issues in NSP-W s electric general rate case. Among other things, paragraph 9.a of the Settlement

5 Agreement in Case No. U stated that NSP-W s electric rates will be increased to recover additional annual revenue of $300,000, which adjustment reflects $513,313 of TCJA benefits described as addressing Credit A and Calculation C in the February 22 Order. NSP-W further agreed to address any necessary true-ups to the TCJA impact in the Credit A and Calculation C proceedings mandated by the February 22 Order. The Settlement Agreement in MPSC Case No. U was signed by NSP-W, Staff, and the Attorney General. The only other party in Case No. U-18462, the Association of Businesses Advocating Tariff Equity, filed a statement of non-objection to the Settlement Agreement. 3. On March 26, 2018, NSP-W filed with the Commission in this docket its Application, along with the Direct Testimony and Exhibits of its witness Julie A. McRea. In its Application and direct case, NSP-W represented that the annual, going forward TCJA impact for its electric service territory (i.e. Credit A) is $331,666. NSP-W further represented that the tariff sheets filed with the Settlement Agreement in Case No. U reflect changes to the Company s base rates for electric service that incorporate the Credit A tax reduction benefit, and therefore, no further adjustment to base rates is necessary. 4. On April 2, 2018, the Commission s Executive Secretary issued a Notice of Hearing and a correspondence directing NSP-W to mail the Notice of Hearing to all cities, incorporated villages, townships, and counties in its Michigan electric service area, and to all intervenors in Case No. U On April 4, 2018, NSP-W caused to have filed in this docket an affidavit of mailing. 5. On April 12, 2018, the Commission issued its Order in Case No. U-18462, approving the Settlement Agreement as described in paragraph 2 herein and establishing new 2

6 electric rates for NSP-W s service territory to take effect for services rendered during the billing month of May On April 18, 2018, Administrative Law Judge Lauren VanSteel presided over the prehearing conference in this proceeding. Staff appeared and the Attorney General was granted intervention. 7. Subsequently, the parties discussed the issues in this case and have negotiated the terms of this Revised Settlement Agreement, and agree as follows: a. NSP-W s direct case is reasonable and prudent. The TCJA benefits included in the Settlement Agreement approved by the Commission in Case No. U include Credit A TCJA benefits as identified by the Commission in the February 22 Order. Specifically, the parties agree that the $513,313 of TCJA benefits included in the Settlement Agreement in Case No. U include NSP-W s electric base rate revenue requirement reduction associated with Credit A, and the electric base rates approved by Commission Order in Case No. U allocate this revenue requirement reduction on a cost-of-service basis to NSP-W s Michigan electric customers. b. The tariff sheets filed with the Settlement Agreement and approved by the Commission in Case No. U-18462, require no further adjustment and should remain in effect as of May 1, It is the opinion of the parties that this Revised Settlement Agreement will promote the public interest, will aid the expeditious conclusion of this case, and will minimize the time and expense which would otherwise have to be devoted to this matter by the parties. This Revised Settlement Agreement is not severable, and all provisions of the same are dependent upon all other provisions contained herein. 9. This Revised Settlement Agreement has been made for the sole and express purpose of settling this case. All offers of settlement and discussions relating hereto are, and shall be considered, privileged under MRE 408 and shall not be used in any manner, or be 3

7 admissible for any other purpose in connection with this proceeding or any other proceeding hereof. 10. Neither the parties to the settlement nor the Commission shall use this Revised Settlement Agreement or the order approving it as precedent in any case or proceeding, except as necessary to carry out its terms. 11. This Revised Settlement Agreement is intended to be a final disposition of this proceeding, and the parties join in respectfully requesting that the Commission grant prompt approval. The parties agree not to appeal, challenge or contest the Commission s Order accepting and approving this Revised Settlement Agreement without modification. If the Commission does not accept the Revised Settlement Agreement without modification, the Agreement shall be withdrawn and shall not constitute any part of the record in this proceeding or be used for any other purpose whatsoever. 12. Because this Revised Settlement Agreement is uncontested, and because the Commission s February 22, 2018 Order in Case No. U (p. 10) established a schedule whereby the Commission would read the record in this proceeding thus dispensing with the Proposal for Decision, it is on this basis that the parties agree that the issuance of a Proposal for Decision pursuant to Section 81 of the Administrative Procedures Act of 1969 ( APA ), MCL , is unnecessary. Notwithstanding, and alternatively, the parties agree to waive the provisions of Section 81 of the APA in connection with this Revised Settlement Agreement. 4

8 NORTHERN STATES POWER COMPANY Rcwn!Eqnnkpu Fkikvcnn{!ukipgf!d{<!Rcwn!Eqnnkpu FP<!EP!?!Rcwn!Eqnnkpu!gockn!?! eqnnkpurboknngtecphkgnf/eqo!e!?! WU Dated: May 11, 2018 By: Fcvg<!3129/16/22!21<15<47!.15(11( One of its Attorneys Sherri A. Wellman (P38989) Paul M. Collins (P69719) Miller, Canfield, Paddock and Stone, P.L.C. One Michigan Avenue, Suite 900 Lansing, MI (517) Dated: May 11, 2018 By: ATTORNEY GENERAL BILL SCHUETTE Okejcgn!Oqqf{! 3129/16/22!21<58<66!.15(11( His Attorney Michael Moody (P51985) Assistant Attorney General Michigan Department of Attorney General Environment, Natural Resources & Agriculture Div. 525 W. Ottawa Street P.O. Box Lansing MI (517) MICHIGAN PUBLIC SERVICE COMMISSION STAFF Dated: May 11, 2018 By: Its Attorney Heather M.S. Durian (P67587) Michigan Public Service Commission 7109 W. Saginaw Highway, 3 rd Floor Lansing, MI (517) \ Jgcvjgt! O/U/!Fwtkcp Fkikvcnn{!ukipgf!d{!Jgcvjgt!O/U/!Fwtkcp! FP<!ep?Jgcvjgt!O/U/!Fwtkcp-!q-! qw?cvvqtpg{!igpgtcn!rwdnke!ugtxkeg! Fkxkukqp-!gockn?fwtkcpjBokejkicp/iqx-! e?wu! Fcvg<!3129/16/22!21<65<23!.15(11( 5

9 P R O O F O F S E R V I C E STATE OF MICHIGAN ) Case No. U County of Ingham ) Lisa Felice being duly sworn, deposes and says that on May 30, 2018 A.D. she electronically notified the attached list of this Commission Order via transmission, to the persons as shown on the attached service list (Listserv Distribution List). Subscribed and sworn to before me this 30th day of May 2018 Lisa Felice Angela P. Sanderson Notary Public, Shiawassee County, Michigan As acting in Eaton County My Commission Expires: May 21, 2024

10 Service List for Case: U Name Heather M.S. Durian Lauren VanSteel Michael E. Moody Northern States Power - Wisconsin 1 of 2 Northern States Power - Wisconsin 2 of 2 Paul M. Collins Sherri A. Wellman Address durianh@michigan.gov vansteell@michigan.gov moodym2@michigan.gov karl.j.hoesly@xcelenergy.com deborah.e.erwin@xcelenergy.com collinsp@millercanfield.com wellmans@millercanfield.com

11 GEMOTION DISTRIBUTION SERVICE LIST ITC Energy Michigan Energy Michigan Mid American Xcel Energy Cloverland Cloverland Village of Baraga Linda Brauker Village of Clinton Tri-County Electric Co-Op Tri-County Electric Co-Op Tri-County Electric Co-Op Aurora Gas Company Citizens Gas Fuel Company Consumers Energy Company SEMCO Energy Gas Company Superior Energy Company Upper Peninsula Power Company WEC Energy Group Upper Peninsula Power Company Midwest Energy Coop Midwest Energy Coop Alger Delta Cooperative Cherryland Electric Cooperative Great Lakes Energy Cooperative Great Lakes Energy Cooperative Great Lake Energy Cooperative Liberty Power Delaware (Holdings) Stephson Utilities Department Ontonagon County Rural Elec Presque Isle Electric & Gas Cooperative, INC Thumb Electric Bishop Energy AEP Energy CMS Energy Just Energy Solutions Constellation Energy Constellation Energy Constellation New Energy DTE Energy First Energy MidAmerican Energy My Choice Energy Updated

12 GEMOTION DISTRIBUTION SERVICE LIST Calpine Energy Solutions Santana Energy Spartan Renewable Energy, Inc. (Wolverine Power Marketing Corp) Xcel Energy City of Escanaba City of Crystal Falls Lisa Felice Michigan Gas & Electric City of Gladstone Integrys Group Lisa Gustafson Tim Hoffman Interstate Gas Supply Inc Thomas Krichel Bay City Electric Light & Power Lansing Board of Water and Light Lansing Board of Water and Light Marquette Board of Light & Power Premier Energy Marketing LLC City of Marshall Doug Motley Dan Blair Marc Pauley City of Portland Alpena Power Liberty Power Wabash Valley Power Wolverine Power Lowell S. Integrys Energy Service, Inc WPSES Realgy Energy Services Volunteer Energy Services First Energy Solutions Hillsdale Board of Public Utilities Michigan Gas Utilities/Upper Penn Power/Wisconsin Michigan Gas Utilities/Qwest Zeeland Board of Public Works Direct Energy Direct Energy Direct Energy Direct Energy Realgy Corp. Jim Weeks Indiana Michigan Power Company Updated

13 GEMOTION DISTRIBUTION SERVICE LIST Santana Energy MEGA ITC Holdings Dickinson Wright Xcel Energy Xcel Energy Matthew Peck Updated

S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * *

S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter, on the Commission s own motion, ) to open a docket to implement the provisions of ) Case No. U-18326