CONSUMERS ENERGY COMPANY

Transcription

1 A CMS Energy Company February 21, 2018 Ms. Kavita Kale Executive Secretary Michigan Public Service Commission 7109 West Saginaw Highway Post Office Box Lansing, MI General Offices: LEGAL DEPARTMENT One Energy Plaza Jackson, MI Tel: Fax: (517) (517) CATHERINE M REYNOLDS Senior Vice President and General Counsel *Washington Office: 1730 Rhode Island Ave. N.W. Tel: (202) MELISSA M GLEESPEN Suite 1007 Vice President, Corporate Washington, DC Fax: (202) Secretary and Chief Compliance Officer Writer s Direct Dial Number: (517) Writer s Address: anne.uitvlugt@cmsenergy.com SHAUN M JOHNSON Vice President and Deputy General Counsel H Richard Chambers Kelly M Hall Eric V Luoma Assistant General Counsel Ashley L Bancroft Robert W Beach Don A D Amato Robert A. Farr Gary A Gensch, Jr. Gary L Kelterborn Chantez P Knowles Mary Jo Lawrie Jason M Milstone Rhonda M Morris Deborah A Moss* Mirče Michael Nestor James D W Roush Scott J Sinkwitts Adam C Smith Theresa A G Staley Janae M Thayer Bret A Totoraitis Anne M Uitvlugt Aaron L Vorce Attorney RE: Case No. U In the matter of the application of CONSUMERS ENERGY COMPANY for Approval of a Gas Cost Recovery Plan and Authorization of Gas Cost Recovery Factors for the 12-Month Period April 2018 March Dear Ms. Kale: Enclosed for electronic filing in the above-captioned case, please find Consumers Energy Company s Application for Leave to Appeal the Administrative Law Judge s Ruling Granting Permissive Intervention to Interstate Gas Supply, Inc. and Direct Energy Services, LLC. This is a paperless filing and is therefore being filed only in PDF. I have also included a Proof of Service showing electronic service upon persons listed in Attachment 1. Sincerely, Anne M. Uitvlugt cc: Hon. Lauren G. VanSteel, ALJ Persons to Attachment 1 to Proof of Service. fl

2 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the application of ) CONSUMERS ENERGY COMPANY for ) Approval of a Gas Cost Recovery Plan and ) Case No. U Authorization of Gas Cost Recovery ) Factors for the 12-Month Period ) April 2018 March 2019 ) ) CONSUMERS ENERGY COMPANY S APPLICATION FOR LEAVE TO APPEAL THE ADMINISTRATIVE LAW JUDGE S RULING GRANTING PERMISSIVE INTERVENTION TO INTERSTATE GAS SUPPLY, INC AND DIRECT ENERGY SERVICES, LLC Consumers Energy Company ( Consumers Energy or the Company ), pursuant to Rule 433 of the Michigan Public Service Commission s ( MPSC or the Commission ) Rules of Practice and Procedure, Mich Admin Code R , respectfully requests that the Commission reverse the ruling of Administrative Law Judge ( ALJ ) Lauren VanSteel granting intervention in this Gas Cost Recovery ( GCR ) Plan case to Direct Energy Services LLC ( Direct Energy ) and Interstate Gas Supply, Inc ( IGS ). The interests of Direct Energy and IGS (referred to collectively as the Alternative Gas Suppliers ) are contrary to the interests of GCR customers. While there may be proceedings where the intervention of the Alternative Gas Suppliers may be appropriate, this is not that case. This case is a GCR Plan proceeding, filed in accordance with Section 6h of 1982 PA 304 ( Act 304 ), as amended, MCL 460.6h. A GCR Plan case is a statutorily defined proceeding that allows a gas utility to recover the booked cost of gas sold, i.e., the commodity cost, through charging a GCR factor to retail GCR customers. In direct contrast, the Alternative Gas Suppliers are alternative gas suppliers in the Commission-approved Gas Customer Choice ( GCC ) ap

3 Program, as defined in Section F of Consumers Energy s Rate Book for Natural Gas Service. By their very nature, the Alternative Gas Suppliers are in direct competition with Consumers Energy for sale of gas commodity to Consumers Energy s retail sales customers. They provide gas at a price that is not regulated by the Commission. Allowing them to intervene is not warranted and is inconsistent with, and detrimental to, the statutory purpose of this Act 304 proceeding. The Alternative Gas Suppliers participation in this Act 304 Plan case would not further the development of the record. Nor would it materially advance resolution of any relevant issue before the Commission in this case. As such, intervention should be denied. I. THE RULING OF THE ALJ ON INTERVENTION AND RELIEF REQUESTED BY CONSUMERS ENERGY At the prehearing conference, the ALJ ruled as follows: As to Interstate, I do not find that the petition for leave to intervene meets the two-prong test for standing as of right, but I do find that it meets the test for permissive intervention, so I will grant the petition. As to the Direct Energy petition, I first find that as to the delayed or untimely petition to intervene, that there is good cause to allow the petition to be considered. The amount of time of delay is minimal and it was prior to the prehearing in this matter, and I have not heard any assertion of prejudice to the other parties, so I find good cause to consider the petition although it is untimely. And I also find that although Direct Energy has not shown that it would meet the two-prong test for intervention as of right, I would find that it would meet the test for permissive intervention, and I will grant that petition. 1 TR Consumers Energy agrees with the ALJ that the Alternative Gas Suppliers do not meet the Commission s two prong-criteria for intervention and do not have standing of right. Consumers Energy disagrees that these Alternative Gas Suppliers should nonetheless be granted discretionary intervention and requests that the Commission reverse that determination and deny ap

4 intervention. The granting of intervention to these competitors of Consumers Energy was in error. II. THE COMMISSION SHOULD GRANT THE COMPANY S APPLICATION FOR LEAVE TO APPEAL Rule 433 of the Commission's Rules of Practice and Procedure provides that a party may appeal an ALJ s ruling to the Commission. Mich Admin Code R This rule states the criteria used by the Commission when reviewing an Application for Leave to Appeal: (2) The commission will grant an application and review the presiding officer's ruling if any of the following provisions apply: (a) A decision on the ruling before submission of the full case to the commission for final decision will materially advance a timely resolution of the proceeding. (b) A decision on the ruling before submission of the full case to the commission for final decision will prevent substantial harm to the appellant or the public-at-large. (c) A decision on the ruling before submission of the full case to the commission for final decision is consistent with other criteria that the commission may establish by order. Mich Admin Code R (2). The Commission should grant the Company s Application for Leave to Appeal the ALJ s ruling because by doing so, the Commission will materially advance a timely resolution of the proceeding and will prevent substantial harm to the public-at-large. A decision denying intervention will avoid the time and expense associated with discovery, testimony, exhibits, cross examination, and pleadings that Alternative Gas Suppliers choose to submit and will materially advance a timely resolution. Moreover, a decision denying intervention will prevent substantial harm to the Company and public at large through: (i) preserving the integrity of the Act 304 GCR Plan case process; (ii) protecting the Company and customers against harm from having a competitor participate in a GCR case; (iii) helping assure Alternative Gas Suppliers do not have access to information that is not otherwise available; and (iv) avoiding harm from Alternative ap

5 Gas Suppliers raising extraneous and irrelevant issues and from advancing positions that are contrary to the goals and purposes of Act 304. III. ARGUMENT It is appropriate to reach the conclusion that these Alternative Gas Suppliers do not satisfy prerequisite criteria for intervention as of right. This is well-supported by prior Commission precedent, prior Court of Appeals decisions, and statutory provisions in MCL 460.6h regarding the nature and scope of GCR Plan cases. The same precedent, decisions, and statutory provisions support the conclusion that these competitors also should not be granted discretionary intervention. A. The Alternative Gas Suppliers are Competitors of Consumers Energy Company Alternative Gas Suppliers are competitors of Consumers Energy. This is a GCR Plan case. It has been filed pursuant to Section 6h of Act 304, as amended, MCL 460.6h. A GCR Plan case is a statutorily defined proceeding that allows a gas utility to recover the booked cost of gas sold, i.e., the commodity cost, through charging a GCR factor. IGS and Direct Energy are both alternative gas suppliers in the Commission-approved GCC Program. See IGS Petition, page 1; Direct Energy s Petition, page 1. Alternative gas suppliers are responsible for arranging for the purchase of the gas that they sell to Consumers Energy GCC customers from sources other than Consumers Energy. Rule C7.1 of Consumers Energy tariffs provides the applicability of the Company s GCR Clause. This provision states: All rates for gas service, unless otherwise provided in the applicable Rate Schedule, shall include a Gas Cost Recovery Factor to allow the Company to recover the booked costs of gas sold by the Company if incurred under reasonable and prudent policies and practices. ap

6 The GCR Factor is charged to those retail sales customers of Consumers Energy to whom Consumers Energy sells the natural gas commodity. In contrast, GCC Rate CC provides that the availability of this rate is for any active desiring gas service where the customer s gas is provided by an Authorized Gas Supplier. With respect to customers participating in the GCC Program, Section F-8, states that: The customer s cost of gas will be as communicated to the Company each month by the customer's Authorized Supplier. No GCR-related costs are charged to GCC customers. GCC customers are supplied gas from alternative gas suppliers. These customers obtain their gas commodity directly from authorized gas suppliers at negotiated prices. Consumers Energy has no involvement in how those prices are established or what amount is charged for the gas commodity. As such, the Alternative Gas Suppliers are in direct competition with Consumers Energy for sale of gas commodity to Consumers Energy s sales customers. The fact that the Alternative Gas Suppliers are competitors of Consumers Energy and interested in the development and maintenance of the competitive market was acknowledged in their Petitions to Intervene. IGS stated that: IGS has an interest in the implementation of rates, tariffs, operating procedures, standards of conduct, rules, and policies that will ensure the development and maintenance of an efficient, reliable, nondiscriminatory, and price competitive natural gas market in Michigan. IGS s license and its ability to participate in the energy market in Michigan will be affected by the outcome of this proceeding. As such, the issues to be addressed in this proceeding could have a direct and substantial impact upon IGS s operations and on its ability to serve customers in Michigan. As a provider with its own distinct property interests, business strategies, and marketplace approaches, IGS s interests in this proceeding cannot be adequately represented or protected by any other party. IGS Petition, page 2. (Emphasis added.) ap

7 Similarly, Direct Energy stated that Direct Energy s ability to participate in the gas supply market on Consumers system will be affected by the outcome of this proceeding. Direct Energy s Petition, page 1. Direct Energy further stated that, Consumers GCR Plan must be just and reasonable to GCR customers and not unreasonably affect GCC customers. Direct Energy s Petition, page 5. In other words, these Alternative Gas Suppliers are, and intend to continue to be, competitors of Consumers Energy for sale of the natural gas commodity. The price that they charge customers is not regulated by the Commission. Consumers Energy cannot make a profit on the gas commodity cost. Alternative Gas Suppliers can seek to make a profit on the gas commodity cost. In Case No. U-9138, the Commission clearly held that a competitive interest was not sufficient to confer standing. November 10, 1988 Opinion and Order, page 5. The Commission has repeatedly reinforced that standard in a number of cases since then. See, e.g., MPSC Case No. U-15628, February 3, 2009 Order; MPSC Case No. U-9852, September 25, 1991 Opinion and Order; MPSC Case No. U-9804, May 17, 1991 Order Granting Motion to Dismiss; MPSC Case No. U-9503, November 1, 1990 Order Granting Motion to Dismiss; and MPSC Case No. U-9515, November 1, 1990 Order Granting Motion to Dismiss. In Case No. U-9804, a pipeline company tried to persuade the Commission that it would suffer an injury in fact, in part, because the utility s proposal would deprive the pipeline company of potential customers for at least two years. May 17, 1991 Order Granting Motion to Dismiss, page 10. But, the Commission found such speculation to be merely conjectural and stated that those types of future competitive interests do not constitute injury in fact. Id. ap

8 It would, therefore, be to the advantage of Alternative Gas Suppliers for the regulated price of gas charged to GCR customers to be as high as possible. There should be no question that their interests in this case are those of competitors and intervention is inappropriate. B. Alternative Gas Suppliers do not have Standing to Intervene under the Commission s Two-Pronged Test The Commission has long applied what is referred to as a two-pronged test in determining whether a prospective intervenor in a MPSC case has demonstrated a sufficient interest to warrant party status. See MPSC Case No. U-15628, February 3, 2009 Order, page 8. This test is derived from a federal test for standing established in Ass n of Data Processing Serv Org, Inc v Camp, 397 US 150; 90 S Ct 827; 25 L Ed 2d 184 (1970). The test was subsequently applied to utility matters in Drake v The Detroit Edison Co, 453 F Supp 1123 (WD Mich, 1978) and has long been applied by the Commission in reviewing petitions to intervene. In order to meet this two-pronged test, a potential party must demonstrate: (i) it has or will suffer an injury in fact from the complained-of action and (ii) that its alleged interests fall within the zone of interests intended to be protected or regulated by the statute or constitutional guarantee in question. Alternative Gas Suppliers do not meet the Commission s well-established standing test in the context of this case. An injury in fact requires demonstration of an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. MPSC Case No. U-15166, May 22, 2007 Order, page 13. An identified injury must be real and not speculative. Without establishing an actual, concrete injury, the Commission has held that a party s mere interest alone in a proceeding is insufficient to grant intervention. MPSC Case No. U-9433, February 22, 1990 Opinion and Order Granting Leave to Appeal, but Denying Relief, pages 4-5. (Emphasis added.) Similarly, the Court of Appeals has ap

9 held that [t]o be aggrieved, one must have some interest of a pecuniary nature in the outcome of the case, and not a mere possibility arising from some unknown and future contingency. Grace Petroleum Corp v Pub Serv Comm, 178 Mich App 309, ; 443 NW2d 790 (1989). None of the assertions made by these Alternative Gas Suppliers in the Joint Petition for Leave to Intervene demonstrates that the Alternative Gas Suppliers will suffer an injury in fact as a consequence of any action taken in this proceeding. In its January 21, 2010 Michigan Consolidated Gas decision, discussed further below, the Court of Appeals summarized the prerequisite requirements for showing an injury in fact as follows: As appellants acknowledge, for a party to show an injury in fact, it must demonstrate an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical Nat l Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608, ; 684 NW2d 800 (2004) (citations omitted). In the Matter of Application of Michigan Consolidated Gas Company (National Energy Marketers Association, Direct Energy Services, and Interstate Gas Supply v Michigan Public Service Comm), Unpublished Opinion of the Court of Appeals, issued January 21, 2010 (Docket No ) (attached as Attachment A) Opinion, page 5. (Emphasis added). In Grace Petroleum v Public Service Commission, 178 Mich App 309, ; 443 NW2d 790 (1989), the Court of Appeals held that producers (the appellants in that case) lacked standing to appeal a Commission order in a GCR Plan case because they did not have sufficient interest in the subject matter of the litigation. The Court in Grace Petroleum held that a mere possibility arising out of some unknown or future contingency is not sufficient to establish standing. Alternative Gas Suppliers at most raise mere possibilities arising out of unknown or future contingencies. They have not identified any actual or imminent injuries to any legally protected interests. ap

10 Similarly, the Alternative Gas Suppliers failed to establish that their alleged interests fall within the zone of interests intended to be protected by the provisions in MCL 460.6h which govern GCR Plan cases. As previously noted, the Alternative Gas Suppliers are competitors of Consumers Energy and plan to continue to be competitors of Consumers Energy. There is no statute or rule granting unregulated competitors the right to intervene in a GCR Plan case initiated by application of a regulated utility. Nor is there any statutory basis for the Commission to conclude that one of its responsibilities in a GCR Plan case is to protect unregulated gas suppliers. The focus of the review in a GCR Plan case is on evaluating a regulated gas company s GCR Plan and establishing GCR Factors. MCL 460.6h(5). GCR cases do not address the terms and conditions of GCC tariffs. Nor do they address the effects of implementation of GCC tariffs. The Authorized Gas Suppliers have shown no valid basis for intervention of right and no valid basis for permissive intervention. C. The Court of Appeals has previously ruled on this same issue The Court of Appeals has previously ruled on this very issue and upheld the MPSC s denial of interventions by the National Energy Marketers Association ( NEMA ), Direct Energy, and IGS in a GCR Plan proceeding. See In the Matter of Application of Michigan Consolidated Gas Company (National Energy Marketers Association, Direct Energy Services, and Interstate Gas Supply v Michigan Public Service Comm), Unpublished Opinion of the Court of Appeals, issued January 21, 2010 (Docket No ). The appeal arose out of a consolidated proceeding addressing Michigan Consolidated Gas Company s GCR Plan for the 12 months ending March 31, 2008 and a proposed sale of excess gas supply. The decision in the Michigan Consolidated case is on point and supports denial of intervention to the Alternative Gas Suppliers in the current Consumers Energy GCR Plan case. ap

11 In the Michigan Consolidated Gas Company case, the ALJ found that NEMA did not have standing to intervene due to its primary status as a competitor of MichCon. Opinion, page 3. The Court summarized: Approximately one month later, appellants moved to reopen and rehear the consolidated cases, NEMA renewed its motion to intervene, and Direct Energy and IGS also filed late petitions to intervene. The PSC denied the motions to reopen the case, and the petitions to intervene. It found NEMA was correctly denied intervention status because its only interest was that of a competitor... The PSC also found that Direct Energy and IGS had not demonstrated good cause to grant their late-filed intervention requests. Id. The Court of Appeals upheld the conclusions of the MPSC that appellants did not have standing to intervene based on their status as competitors. The Court stated: Appellants argue in the alternative that the ALJ and PSC erred when they determined that, as a competitor, NEMA could not show that it had, or would, suffer an injury in fact.... Appellants maintain that this is not merely a speculative interest, but a discrete and concrete financial interest in the relief sought by MichCon. We disagree. Id. at 6. The same conclusions are appropriate in the current case. 1 The Alternative Gas Suppliers previously attempted to gain a foothold in the Company s GCR proceeding by arguing that they somehow represented GCC customers interests. Although not specifically stated, on pages 4 and 5 of its Petition, Direct Energy seems to make this claim when alleging that it can shed light on GCC customer behavior and insists that the Company s GCR Plan must not unreasonably affect GCC customers. This argument was appropriately rejected when it was raised in the Michigan Consolidated Gas Company case: In this [NEMA s claim of standing] and in other issues raised on appeal, NEMA and the other appellants largely rest their claim that 1 At page 8, the Court of Appeals stated: Moreover, we are not convinced of the propriety of holding that a business competitor is entitled to intervene as a matter of right in a competitor s case absent a showing of something more than possible future damage to the competitor s bottom line. Such a rule could easily lead to abuse. ap

12 they satisfied the actual harm element of the PSC standing test by virtue of their representation of the choice customer s interests. We find this argument unpersuasive. * * * In addition, appellants have presented nothing, apart from supposition, to show that choice customers interests would suffer actual and imminent harm here. Id. at 5. The same conclusions are appropriate in the current case. The Alternative Gas Suppliers are not an association and do not have an identity of interests with their GCC customers. They cannot properly stand in the shoes of those customers in this Act 304 GCR Plan case; but even if they could, this would not provide a basis for their intervention. 2 Neither Direct Energy or IGS have established that GCC customers are within the zone of interests intended to be protected or regulated by GCR Plan cases or that the choice customers interests will suffer any actual or imminent harm as a result of this GCR Plan case. 3 D. The Commission has previously reviewed this exact same issue The Commission has previously considered whether the Alternative Gas Suppliers have standing to intervene in a Consumers Energy GCR Plan proceeding. In Case No. U-16149, a previous Consumers Energy GCR Plan case, the Commission reversed the decision of an ALJ who granted permissive intervention to IGS and Direct Energy in a GCR Plan proceeding. In Case No. U-16149, the Commission has previously spoken on similar claims of alleged injury made by the Alternative Gas Suppliers. A copy of that previous Petition to Intervene is attached as Attachment B. This case is directly on point to the situation at hand. 2 Even an association does not have standing to bring suit on behalf of its members when its members would not have standing to sue on their own behalf. 3 The only difference between the price that a GCR customer pays and the price that a GCC customer pays, is the gas commodity charge, which for the GCR customer is the GCR Factor and for the GCC customer is the non-regulated price the alternative supplier charges. GCC customers are not charged and do not pay gas commodity costs based on the GCR Factor or GCR Clause. The customer charges and distribution charges that GCR customers and GCC customers pay are identical. Neither the customer charge nor the distribution charge is at issue in this GCR Plan case. Any claims to the contrary by Authorized Gas Suppliers are incorrect. This case will not determine any charges paid by GCC customers to Consumers Energy. ap

13 In Case No. U-16149, the Commission found that: The Commission finds that this hypothetical injury is insufficient to confer standing on Direct Energy. As the Court of Appeals has held, [t]o be aggrieved, one must have some interest of a pecuniary nature in the outcome of the case, and not a mere possibility arising from some unknown and future contingency. Grace Petroleum Corp v Public Service Com n, 178 Mich App 309, ; 443 NW2d 790 (1989). Likewise in National Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608, 628; 684 NW2d 800 (2004), our Supreme Court affirmed that standing, in part, consists of an injury in fact -an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. The Commission is likewise unpersuaded by Direct Energy s other alleged injuries that might result from the approval of an incorrect GCR factor. MPSC Case No. U-16149, March 18, 2010 Order, pages 4-5 (attached as Attachment C). The Commission further held: Direct Energy s interests in an Act 304 proceeding are not within the zone of interests to be protected by the statute and indeed are antithetical to its purposes. As the opposing parties have pointed out, the objective of Act 304 is narrow. The focus of the review in a GCR plan case centers on evaluating a regulated gas company s GCR plan and establishing GCR factors. MCL 460.6h(5). GCR cases do not address the terms and conditions of GCC tariffs, nor do they address the effects of implementation of GCC tariffs; these issues should be taken up in a general rate case. MPSC Case No. U-16149, March 18, 2010 Order, page 5. (Emphasis added). The Commission further found that permissive intervention by Alternative Gas Suppliers was inappropriate. The Commission stated that Direct Energy does not meet the Commission s two-pronged test for intervention of right, nor does the Commission find that granting permissive intervention to Direct Energy is justified. Any purported interest that Direct Energy may have in this proceeding is adequately represented by other parties in the case who also seek to establish a reasonable GCR factor. Id. ap

14 E. Act 304 Cases Are Limited Issue Cases with a Narrowly Defined Scope By their nature, Act 304 proceedings are limited in nature. The Alternative Gas Suppliers seek to rely upon various cases that are not Act 304 GCR cases as support for their being allowed to intervene in this GCR Plan case. In attempt to support its intervention, IGS notes that it has been granted party status in other utility proceedings. IGS Petition, page 3. However, the cases relied upon are inappropriate as a review of these cases shows that these proceedings specifically involved the rights of GCC customers. In MPSC Case Nos. U and U-17332, DTE Gas Company requested approval to implement a reservation charge applicable to GCC suppliers in its GCR Plan case. In MPSC Case No. U-15929, the Commission opened a contested case proceeding to investigate whether revisions should be made to the GCC tariffs of the different Michigan gas utilities. And, in MPSC Case Nos. U-15986, U-16418, and U-16855, Consumers Energy filed a general gas rate case where the requested relief was not specific to GCR customers. None of the proceedings cited by IGS were specific solely to the interest of GCR customers, and reliance on intervention in these proceedings is misplaced as the cases they seek to rely upon are inapposite. Similarly, Direct Energy points to its membership in Retail Energy Supply Association s ( RESA ) participation in the Company s current gas rate case proceeding as a means to intervene in this proceeding. This argument is based on the assertion that it meets the definition of an interested person under MCL 460.6h. A review of Section 6h(1) shows that it provides a number of definitions to be used in this statutory provision. One of the definitions to be used in the statute is the term interested persons which is defined as follows: (e) Interested persons means the attorney general, the technical staff of the commission, any intervenor admitted to 1 of the utility s 2 previous general rate cases, any intervenor admitted to 1 of the utility s 2 previous reconciliation hearings, or any ap

15 association of utility customers which meets the requirements to intervene in a reconciliation hearing under the rules of practice and procedure of the commission as applicable. MCL 460.6h(1)(e). While providing this definition, notably, the term interested persons is not used when discussing GCR Plan proceeding. The statute provides in pertinent part: (3) In order to implement the gas cost recovery clause established pursuant to subsection (2), a utility annually shall file, pursuant to procedures established by the commission, if any, a complete gas cost recovery plan describing the expected sources and volumes of its gas supply and changes in the cost of gas anticipated over a future 12-month period specified by the commission and requesting for each of those 12 months a specific gas cost recovery factor. The plan shall be filed not less than 3 months before the beginning of the 12-month period covered by the plan. The plan shall describe all major contracts and gas supply arrangements entered into by the utility for obtaining gas during the specified 12-month period. The description of the major contracts and arrangements shall include the price of the gas, the duration of the contract or arrangement, and an explanation or description of any other term or provision as required by the commission. The plan shall also include the gas utility's evaluation of the reasonableness and prudence of its decisions to obtain gas in the manner described in the plan, in light of the major alternative gas supplies available to the utility, and an explanation of the legal and regulatory actions taken by the utility to minimize the cost of gas purchased by the utility. (4) In order to implement the gas cost recovery clause established pursuant to subsection (2), a gas utility shall file, contemporaneously with the gas cost recovery plan described in subsection (3), a 5-year forecast of the gas requirements of its customers, its anticipated sources of supply, and projections of gas costs. The forecast shall include a description of all relevant major contracts and gas supply arrangements entered into or contemplated between the gas utility and its suppliers, a description of all major gas supply arrangements which the gas utility knows have been, or expects will be, entered into between the gas utility's principal pipeline suppliers and their major sources of gas, and such other information as the commission may require. (5) If a utility files a gas cost recovery plan and a 5-year forecast as provided in subsections (3) and (4), the commission shall conduct a proceeding, to be known as a gas supply and cost ap

16 review, for the purpose of evaluating the reasonableness and prudence of the plan, and establishing the gas cost recovery factors to implement a gas cost recovery clause incorporated in the rates or rate schedule of the gas utility. The gas supply and cost review shall be conducted as a contested case pursuant to chapter 4 of Act No. 306 of the Public Acts of (6) In its final order in a gas supply and cost review, the commission shall evaluate the reasonableness and prudence of the decisions underlying the gas cost recovery plan filed by the gas utility pursuant to subsection (3), and shall approve, disapprove, or amend the gas cost recovery plan accordingly. In evaluating the decisions underlying the gas cost recovery plan, the commission shall consider the volume, cost, and reliability of the major alternative gas supplies available to the utility; the cost of alternative fuels available to some or all of the utility s customers; the availability of gas in storage; the ability of the utility to reduce or to eliminate any sales to out-of-state customers; whether the utility has taken all appropriate legal and regulatory actions to minimize the cost of purchased gas; and other relevant factors. The commission shall approve, reject, or amend the 12 monthly gas cost recovery factors requested by the utility in its gas cost recovery plan. The factors ordered shall be described in fixed dollar amounts per unit of gas, but may include specific amounts contingent on future events, including proceedings of the federal energy regulatory commission or its successor agency. (7) In its final order in a gas supply and cost review, the commission shall evaluate the decisions underlying the 5-year forecast filed by a gas utility pursuant to subsection (4). The commission may also indicate any cost items in the 5-year forecast that on the basis of present evidence, the commission would be unlikely to permit the gas utility to recover from its customers in rates, rate schedules, or gas cost recovery factors established in the future. MCL 460.6h(3)-(7). As the plain statutory language fails to use the definition relied upon, Direct Energy s argument has no merit. The Legislature s failure to use the statutory term interest persons when discussing the GCR Plan is intentional. This is because GCR Plan cases are limited issue cases. As used in Act 304: ap

17 (b) Gas cost recovery clause means an adjustment clause in the rates or rate schedule of a gas utility which permits the monthly adjustment of rates for gas in order to allow the utility to recover the booked costs of gas sold by the utility if incurred under reasonable and prudent policies and practices. (c) Gas cost recovery factor means that element of rates to be charged for gas service to reflect gas costs incurred by a gas utility and made pursuant to a gas cost recovery clause incorporated in the rates or rate schedules of a gas utility. MCL 460.6h(1). A GCR Plan case must be filed not less than 3 months before the 12-month period covered by the Plan. MCL 460.6h(3). The focus of the review in a GCR Plan case is on evaluating a regulated gas company s GCR Plan and establishing GCR factors. MCL 460.6h(5). The interests of Direct Energy, or alternative gas suppliers generally, are not at issue in this proceeding. F. No Valid Basis for Discretionary Intervention has been Established The same reasons that require denial of intervention of right in this Act 304 proceeding also require denial of discretionary intervention. The Court of Appeals provided the following guidance in Grace Petroleum, supra, 178 Mich App 309: A party is aggrieved by a judgment or order when it operates on his rights and property or bears directly on his interest. To be aggrieved, one must have some interest of a pecuniary nature in the outcome of the case, and not a mere possibility arising from some unknown and future contingency. 178 Mich App at As has been addressed above, the claimed interest of Interstate Gas Supply and Direct Energy Services in this Act 304 GCR Plan case at most involves a mere possibility arising from some unknown and future contingency. 4 4 In Michigan Bell Telephone v Public Service Comm, 214 Mich App 1, 4-6; 542 NW2d 279 (1995) the Court reversed an MPSC grant of discretionary intervention to a competitor on the ground it lacked standing because it had not suffered an injury in fact. The Court viewed injury in fact as necessary for intervention in a contested case. ap

18 Direct Energy points to the pre-filed direct testimony of Company witness Michael H. Ross in this GCR Plan proceeding as support for its permissive intervention. Based on Mr. Ross pre-filed testimony, Direct Energy contends that given the utility s lack of certainty about alternative gas supplier and GCC customer future behavior, its participation would be helpful in this proceeding. Direct Energy, page 4. This claim is based on a misinterpretation and extrapolation of Company witness Ross pre-filed testimony. On page 27 of Mr. Ross pre-filed testimony, line 12-19, Mr. Ross has the following testimony regarding the GCC Program: Q. Please discuss the status of the GCC Program. A. The April 2018 GCC customer count forecast is 178,797 and estimated to decrease to 165,681 by March Exhibit A-28 (MHR-4), line 4, projects GCC sales of approximately 40 Bcf for the GCR Plan period based on the declining trend in participation. The Company does not know, in the current gas price environment, how either customers or GCC suppliers will react in the future. Additional uncertainty results due to the Company s role as supplier of last resort if a supplier defaults or a customer returns to sales service in some other way. The cited single question and answer, taken in context, does not offer an opportunity for an Alternative Gas Supplier to provide a unique prospective. The statement simply expresses the fact that the GCC customer count and associated load, may vary due to the fact that this is a forecast. Regardless as to whether these customers remain GCC customers or GCR customers, the Company needs to forecast GCC activity to estimate how much of total sales use GCR sales to prepare the GCR supply plan. This is irrespective of any information provided by Direct Energy. ap

19 III. REQUEST FOR RELIEF Consumers Energy Company requests that the Commission find that the Petitions for Leave to Intervene filed by Direct Energy Services and Interstate Gas Supply should be denied and reverse the ruling of the ALJ allowing these parties permissive intervention in this case. Respectfully submitted, CONSUMERS ENERGY COMPANY Dated: February 21, 2018 By: Anne M. Uitvlugt (P71641) Bret A. Totoraitis (P72654) One Energy Plaza Jackson, Michigan Attorneys for Consumers Energy Company (517) ap

20 ATTACHMENT A

21 Attachment A Page 1 of 11 STATE OF MICHIGAN COURT OF APPEALS In the Matter of APPLICATION OF MICHIGAN CONSOLIDATED GAS COMPANY FOR SALE OF EXCESS GAS. NATIONAL ENERGY MARKETERS ASSOCIATION, DIRECT ENERGY SERVICES, L.L.C., and INTERSTATE GAS SUPPLY, INC., UNPUBLISHED January 21, 2010 Appellants, v No MPSC LC Nos MICHIGAN PUBLIC SERVICE COMMISSION, and ATTORNEY GENERAL, and Appellees, MICHIGAN CONSOLIDATED GAS COMPANY, Petitioner-Appellee. Before: Bandstra, P.J. and Sawyer and Owens, JJ. PER CURIAM. I. Facts Appellants National Energy Marketers Association (NEMA), Direct Energy Services, L.L.C. (Direct Energy), and Interstate Gas Supply, Inc. (IGS) 1 appeal by right a portion of an 1 NEMA is a non-profit trade association represented wholesale and retail marketers of natural gas and electricity. Its membership includes independent power producers, advanced metering, demand and load management firms, billing back office, customer service and related information technology providers. IGS and Direct Energy are alternative gas suppliers who (continued ) -1-

22 Attachment A Page 2 of 11 August 21, 2007 order entered by appellee Michigan Public Service Commission (PSC) approving a settlement agreement between appellees Michigan Consolidated Gas Company (MichCon) and the Attorney General (AG) in the combined PSC proceedings concerning MichCon s proposed sale of excess gas supply (PSC Docket No. U-14800) and its request for approval of its natural gas cost recovery plan (GCR) and related actions for the 12 months ending March 31, 2008 (PSC Docket No. U-15042). We affirm. 2 On August 23, 2006, MichCon filed an application to gain PSC approval of the sale of four billion cubic feet (Bcf) of excess natural gas in its underground storage supplies. It planned on ultimately removing seventeen Bcf from storage. However, MichCon planned to include the remaining thirteen Bcf of the removal, and the revenues generated by the sale of this portion of the gas, in its next GCR plan, since MichCon had purchased that gas separately. Unlike the sale of the remaining gas, MichCon wanted to keep the proceeds from the sale of the four Bcf of native base gas 3 to offset its capital improvements to its storage facilities rather than pass them on to the GCR customers. The AG filed a petition to intervene and a motion for a contested case hearing on the sale. Petitions to intervene were then filed by the Residential Ratepayers Consortium (RCC), the Michigan Community Agency Action Association (MCAAA), the Michigan Public Service Commission staff (Staff), and NEMA. The Administrative Law Judge (ALJ) granted all of the intervention petitions except NEMA s, after finding that it did not have standing due to its primary status as a MichCon competitor. Counsel for NEMA then stated that it wished to make a statement of position without becoming a party pursuant to R and the ALJ granted the request. RRC moved to consolidate Docket U with the upcoming GCR plan case, U , and the ALJ agreed. MichCon then filed its plan case. While the other parties petitioned to intervene and were permitted to do so, NEMA did not again move to intervene. It instead renewed its request to file a statement of position and later did so. The parties to the consolidated cases signed a settlement of all of the issues, which the PSC subsequently adopted. Under the terms of the agreement, MichCon was permitted to make a total decrement of seventeen Bcf, with 7.2 Bcf allotted to native base gas and 9.8 Bcf allotted to working gas. MichCon was allowed to then sell 3.2 Bcf of the native base gas and keep the proceeds, and sell ( continued) provide natural gas to MichCon s choice customers. 2 We note that appellees argue that this Court lacks jurisdiction to hear appellants appeal because they lack standing to appeal the PSC s order since they were not parties to the proceedings below and were not aggrieved by the PSC s decision. However, our clerk s office has determined otherwise, and we concur with this decision. MCR Base gas is the minimum volume of gas required in a gas storage field to maintain sufficient pressure to operate the field and recover the working gas (i.e., the gas which can be cycled, injected into and withdrawn from, a natural gas storage field as a source of supply), and native base gas as the base gas that existed in the field at the time the gas storage field was originally certificated and developed. -2-

23 Attachment A Page 3 of 11 the remaining native base gas to GCR customers at a fixed rate and use the proceeds to provide funding for residential energy efficiency programs. 4 Approximately one month later, appellants moved to reopen and rehear the consolidated cases, NEMA renewed its motion to intervene, and Direct Energy and IGS also filed late petitions to intervene. The PSC denied the motions to reopen the case, and the petitions to intervene. It found that NEMA was correctly denied intervention status because its only interest was that of a competitor. The PSC also noted that NEMA did not timely challenge the denial of its petition to intervene. The PSC also found that Direct Energy and IGS had not demonstrated good cause to grant their late-filed intervention requests. The PSC then stated that, because appellants were not parties to the actions, they did not have standing to request rehearing or reopening of the proceedings under R (governing reopening of proceedings) or R (governing rehearing). II. Denial of NEMA s Initial Petition to Intervene. On appeal, petitioners first argue that the PSC erred when it agreed with the ALJ s determination that NEMA did not have standing to intervene in the U application. We disagree. In In re Application of Detroit Edison Co, 276 Mich App 216, ; 740 NW2d 685 (2007), this Court explained the applicable standard of review: The standard of review for PSC orders is narrow and well-defined. Pursuant to MCL , all rates, fares, charges, classification and joint rates, regulations, practices, and services prescribed by the PSC are presumed, prima facie, to be lawful and reasonable. Michigan Consolidated Gas Co v Public Service Comm, 389 Mich 624, ; 209 NW2d 210 (1973). A party aggrieved by an order of the PSC has the burden of proving by clear and satisfactory evidence that the order is unlawful or unreasonable. MCL (8). To establish that a PSC order is unlawful, the appellant must show that the PSC failed to follow a mandatory statute or abused its discretion in the exercise of its judgment. In re MCI Telecom Complaint, 460 Mich 396, 427; 596 NW2d 164 (1999). And, of course, an order is unreasonable if it is not supported by the evidence. Associated Truck Lines, Inc v Public Service Comm, 377 Mich 259, 279; 140 NW2d 515 (1966). In sum, a final order of the PSC must be authorized by law and supported by competent, material, and substantial evidence on the whole record. Const 1963, art 6, 28; Attorney General v Public Service Comm, 165 Mich App 230, 235; 418 NW2d 660 (1987). However, an agency s interpretation of a statute, while entitled to respectful consideration, is not binding on the courts, and it cannot conflict with the Legislature s intent as expressed in the language of the statute at issue. Mich Envtl Council v Public Service 4 The 9.8 Bcf of working gas would take the place of what would have been presumably more expensive future gas purchases. -3-

24 Attachment A Page 4 of 11 Comm, 281 Mich App 352, 357; 761 NW2d 346 (2008), quoting SBC Michigan v Public Service Comm (In re Complaint of Rovas Against SBC Michigan), 482 Mich 90, 93, 103; 754 NW2d 259 (2008). As to this Court s review of the PSC s factual determinations: Judicial review of administrative agency decisions must not invade the province of exclusive administrative fact-finding by displacing an agency s choice between two reasonably differing views. MERC v Detroit Symphony Orchestra, 393 Mich 116, 124; 223 NW2d 283 (1974); see also In re Payne, 444 Mich 679, ; 514 NW2d 121 (1994) ( When reviewing the decision of an administrative agency for substantial evidence, a court should accept the agency s findings of fact if they are supported by that quantum of evidence. A court will not set aside findings merely because alternative findings also could have been supported by substantial evidence on the record. ). [In re Application of Detroit Edison Co, 483 Mich 993, 993; NW 2d (2009).] In addition, [w]hether a party has legal standing to assert a claim [is] a question of law that we review de novo. Heltzel v Heltzel, 248 Mich App 1, 28; 638 NW2d 123 (2001). In general, intervention in a PSC proceeding is governed by R , which provides: (1) A person who is not a complainant, respondent, protestant, applicant, or staff, as defined in these rules, and who claims an interest in a proceeding may petition for leave to intervene. Unless otherwise provided in the notice of hearing, a petition for leave to intervene shall be filed with the commission not less than 7 days before the date set for the initial hearing or prehearing conference, and the petition shall be served on all parties to the proceeding. All parties shall have an adequate opportunity to file objections to, and to be heard with respect to, the petition for leave to intervene. A petition for leave to intervene that is not filed in a timely manner may be granted upon a showing of good cause and a showing that a grant of the petition will not delay the proceeding or unduly prejudice any party to the proceeding. Except for good cause, an intervenor whose petition is not filed in a timely manner, but who is nevertheless granted leave to intervene, shall be bound by the record and procedural schedules developed before the granting of leave to intervene. (2) A petition for leave to intervene shall set out clearly and concisely the facts supporting the petitioner s alleged right or interest, the grounds of the proposed intervention, and the position of the petitioner in the proceeding to fully and completely advise the parties and the commission of the specific issues of fact or law to be raised or controverted. If affirmative relief is sought, the petition for leave to intervene shall specify that relief. Prayers for relief may be stated in the alternative. Although the rule speaks in terms of leave to intervene, the PSC has indicated that it considers the ability to intervene to be one of right under circumstances where a party can -4-

25 Attachment A Page 5 of 11 demonstrate that (1) it has suffered or will suffer an injury in fact, and (2) the interests allegedly affected fall within the zone of interests intended to be protected or regulated by the statute or constitutional guarantee in question. See PSC Order, U-10030, 6/12/92, 3. This test is taken from the federal test for establishing standing to bring an action established by the Supreme Court in Ass n of Data Processing Service Orgs, Inc v Camp, 397 US 150, 90 S Ct 827; 25 L Ed 2d 184 (1970). It was subsequently applied to utility matters in Drake v Detroit Edison Co, 443 F Supp 833(WD Mich, 1978). See Michigan Bell Telephone Co v Public Service Comm, 214 Mich App 1, 4; 542 NW2d 279 (1995). As appellants acknowledge, for a party to show an injury in fact, it must demonstrate an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical. Nat l Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608, ; 684 NW2d 800 (2004) (citations omitted). A. NEMA s Claim of Standing In this and in the other issues raised on appeal, NEMA and the other appellants largely rest their claim that they satisfied the actual harm element of the PSC standing test by virtue of their representation of the choice customer s interests. We find this argument unpersuasive. We note that NEMA did not raise this as a reason to grant its motion to intervene in its initial petition. When discussing whether a contested case hearing was warranted, NEMA stated that it was concerned about whether MichCon s direct customers would benefit from the sale more than the choice customers. However, it did not claim to represent these customers. Rather, it described itself as a representative of a regionally diverse group of providers of energy and energy-related services and listed its membership to include gas marketers and providers of energy-related services and technologies. As to its actual interest in the proceedings, NEMA stated [t]he ability of NEMA s members to participate in a competitive retail gas market in Michigan will be affected by the outcome of this proceeding. During the hearing on its petition, NEMA s counsel attempted to broaden NEMA s interest to include that of representing the choice customers and averred that it had at least one member that would be a choice customer. However, when the ALJ stated that it struck him that NEMA s interests here are primarily a competitive one (sic), counsel conceded, I think that s fair in this case, yes. Generally, a party may not take a position below or stipulate to a matter and then argue on appeal that the resultant action was error. Holmes v Holmes, 281 Mich App 575, 587, 588; 760 NW2d 300 (2008). In addition, while NEMA continues to assert that at least one of its members is a choice customer, it has not presented any evidence to support this assertion, such as the name of that member. In their opposition to appellants late-filed motions to intervene and to reopen the proceedings, the PSC Staff asserted that they, the AG, the RRC, and the MCAAA were the parties that actually represented the interests of gas customers. This assertion is supported by the statement of interests in the intervention petitions filed by the RRC, the MCAAA, and the AG. Thus, contrary to appellants arguments, they have not shown that NEMA s intervention was essential to protect the choice customers interests. In addition, appellants have presented nothing, apart from supposition, to show that choice customers interests would suffer actual and imminent harm here. While appellants maintain that inequities must have occurred, they provided no direct evidence of this below, and do not do so now. Nor have appellants adequately addressed their theory that choice customers suffer an inequity generally. Appellants have presented no authority to support the claim that -5-

26 Attachment A Page 6 of 11 choice customers are somehow legally entitled to present rate decreases due to their actions in the past in helping pay for the gas in storage. Appellants have not addressed MichCon s assertion that the gas, at least the portion of it discussed in U that was apparently included when MichCon initially purchased the facility, was somehow the property of choice customers, or customers generally. Appellants have not provided citation to authority to counter the argument that choice customers pay for the service and do not acquire any interest in MichCon s property. See e.g. Bd of Public Utilities Comm rs v New York Telephone Co, 271 US 23, 32; 46 S Ct 363; 70 L Ed 808 (1926). Perhaps most importantly, appellants do not refute the AG s argument below that any alleged benefit solely to GCR customers can be acquired by a choice customer if the choice customer wants to become a GCR customer. It is not sufficient for a party simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position. Wilson v Taylor, 457 Mich 232, 243; 577 NW2d 100 (1998), quoting Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). Failure to brief a question on appeal is tantamount to abandoning it. Mitcham, supra. B. Competitor Standing Appellants argue in the alternative that the ALJ and the PSC erred when they determined that, as a competitor, NEMA could not show that it had, or would, suffer an injury in fact. However, this argument is largely based on the above assertion that appellants represent choice customers coupled with a claim that the choice customers were entitled to a portion of the revenue from the sale of the gas, and that the customers and the suppliers were harmed by inequitable treatment that creates an unfair market environment. Appellants maintain that this is not merely a speculative interest, but a discrete and concrete financial interest in the relief sought by MichCon. We disagree. As noted above, appellants position as choice customer representatives directly contradicts NEMA s position before the ALJ. Further, NEMA has not presented clear and satisfactory evidence that any of its members is a choice customer. As to the stand-alone claim that NEMA or its members could show that they were in danger of suffering a concrete injury, we find it to be without merit. The future possibility of rate decreases for direct customers, which in turn might lead to a future loss of customers for NEMA s members, is too attenuated to constitute a clearly actual and imminent harm. As to the second part of the test used by the PSC, appellants raise for the first time on appeal a claim that NEMA s interests are within the zone of interests of the statutes at issue, by claiming that the case involves the PSC s statutory regulatory authority under 1929 PA 9 (Act 9), particularly MCL and MCL However, while appellants cite to the provisions they believe apply, they provide no other support for their contention that this case involves this provision, rather than a general disagreement with the prior PSC cases that held to the contrary. 5 Contrary to its assertion on appeal, NEMA did not raise this before the ALJ, but argued generally that its interests, or rather the choice customers interests, were within the zone of interests involved in the case. -6-

27 Attachment A Page 7 of 11 See e.g., PSC Order, U-10030, 6/12/92, 7-8; PSC Order, U-9804, 5/17/91, 13-14; PSC Order U- 9852, 9/25/91, In addition, to the extent appellants attempt to explain the application of Act 9, and the duty of the PSC to prevent inequity, appellants couch them in terms of the effect on the interests of choice customers. As discussed above, NEMA has not shown that it represents the interests of the choice customers. Appellants further argue that, even if this Court agrees with the PSC s determination that competitors generally do not have standing to intervene in a PSC proceeding, other jurisdictions have held that a claim of unfair and unlawful competition is distinct from the assertion of a mere competitive interest and that a competitor has standing to intervene in such a case. However, we note that in its initial petition, NEMA did not specifically allege that MichCon s actions amounted to unfair or unlawful competition, and raised only a general allegation of possible unfair competition during a latter filing concurring with the AG s request for a contested case hearing. Thus, to the extent this issue was raised before the ALJ, it was little more than a claim that NEMA s members were likely to lose revenues if MichCon lowered the price of its gas to direct customers. Competition does not equal unfair competition. Therefore, even were we to credit appellants assertion that competitors raising valid claims of unfair competition should be treated differently, appellants have not shown that the ALJ s or the PSC s decisions were improper for this reason. We further note that the PSC s determination here is also consistent with its prior rulings concerning intervention as a matter of right by competitors. See Order U-9852, 9/25/91, Thus, we conclude that appellants have not shown that the PSC acted unlawfully or unreasonably in applying its historical test to NEMA s initial request to intervene by right. C. Use of MCR 2.209(A) Appellants also appear to argue that the PSC erred when it did not use the intervention test set forth in MCR 2.209(A). Appellants did not raise this issue below. Therefore, it is unpreserved. Walters v Nadell, 481 Mich 377, 387; 751 NW2d 431 (2008). Although this Court has inherent power to review an issue not raised in the trial court to prevent a miscarriage of justice, generally a failure to timely raise an issue waives review of that issue on appeal. Id. (citations omitted). Appellants have not shown that the PSC s decision to rely on its traditional test for standing was erroneous. R provides in pertinent part, In areas not addressed by these rules, the presiding officer may rely on appropriate provisions of the currently effective Michigan court rules. However, as discussed above, a specific rule exists regarding intervention in PSC proceedings. R In addition, to the extent that R permits the use of the court rules to decide when intervention is appropriate, the use of the court rules is permissive, not mandatory. Nor can appellants show that, even under MCR 2.209(A), NEMA was entitled to intervention as of right such that the PSC s decision to deny NEMA standing was unlawful or unreasonable. MCR 2.209(A)(3) states that a person has the right to intervene: -7-

28 Attachment A Page 8 of 11 when the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the applicant s ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. For the reasons discussed above, even were we to find that the court rule can or does grant a more liberal ability to intervene than that of our Supreme Court s standing test, appellants arguments are not persuasive. NEMA has no interest in the gas itself or in the storage facility. Also as noted above, NEMA has not convincingly shown that it, rather than the AG, the RRC, and the MCAAA, represents the interest of the choice customers, and in fact admitted as much in the proceedings below. Any member s competitive interest, or damage thereto, is speculative. Moreover, we are not convinced of the propriety of holding that a business competitor is entitled to intervene as a matter of right in its competitor s case absent a showing of something more than possible future damage to the competitor s bottom line. Such a rule could easily lead to abuse. For these reasons, we find that appellants have failed to meet their burden of demonstrating by clear and satisfactory evidence that the PSC s decision affirming the ALJ s denial of NEMA s initial intervention petition was unlawful or unreasonable. III. Late Intervention Appellants next argue that the PSC erred when it denied appellants late-filed motions to intervene. We disagree. Pursuant to R , [a] petition for leave to intervene that is not filed in a timely manner may be granted upon a showing of good cause and a showing that a grant of the petition will not delay the proceeding or unduly prejudice any party to the proceeding. The PSC s decision that appellants could not satisfy this test was not erroneous. First, appellants have not shown good cause in seeking late intervention. Appellants arguments that they did not have an earlier chance to intervene due to the timing of the consolidation of the cases is specious. The ALJ agreed to consolidate the cases on December 29, 2006, and to suspend the previously set schedule. RRC, ABATE, the Staff, and the AG petitioned to intervene in the new GCR plan case and the ALJ granted the petitions to intervene in February of At that time, NEMA could have again moved to intervene, and Direct Energy and IGS could have also tried to intervene. 6 Instead, NEMA chose to simply file a position statement, and moreover, waited until two months later to do so. In addition, appellants 6 We do not necessarily agree with appellees contention that NEMA waived any objection to the denial of its motion to intervene in case U because it did not appeal the ALJ s denial of that decision to the PSC, and did not attempt to intervene in case U-15042, see PSC rule R (5). However, the PSC s notation that NEMA s response was untimely was not erroneous, see R (1), and supports the PSC s subsequent decision that NEMA could not show good cause for late intervention. -8-

29 Attachment A Page 9 of 11 did not attempt to intervene after the settlement agreement was proposed. They instead waited a month until after the PSC approved it. Appellants apparent claim that any new attempt to intervene would have been futile is speculative. Nor did appellants raise anything new when they later moved to intervene. Their arguments were essentially the same as those presented in NEMA s initial position statement, albeit coupled with a claim that the ALJ should have let NEMA intervene initially. Appellants have not shown that the PSC erred when it determined they did not have good cause for late intervention. In addition, appellants have not shown that a grant of the petition would not have delayed the proceeding or unduly prejudiced any party to it. The case had been concluded by settlement after lengthy proceedings and considerable effort by the parties. Appellants contention that the settlement agreement could have simply been tweaked to provide more relief to the choice customers directly contradicts appellants own claim that more discovery was needed to discover the inequities they claim exist here. We also find such a contention without merit considering what would most likely have been strenuous objections by the parties, as shown by their vehement opposition to the late intervention motions. In summary, appellants have not presented clear and satisfactory evidence that the PSC s denial of appellants late petitions to intervene was unlawful or unreasonable. MCL (8). IV. Appellants Petitions on PSC Proceedings Appellants next argue that the PSC erred in denying appellants motion to reopen proceedings and petition for rehearing. They contend that the PSC erroneously found that appellants could not move to reopen proceedings or to seek rehearing under R and R We disagree. A motion to reopen PSC proceedings is governed by R , which provides in pertinent part: (1) A proceeding may be reopened for the purpose of receiving further evidence when a reopening is necessary for the development of a full and complete record or there has been a change in conditions of fact or law such that the public interest requires the reopening of the proceeding. (2) After providing due notice and an opportunity for the parties to be heard, the presiding officer, upon his or her own motion or upon motion of any party, may reopen the proceeding at any time before the date for the filing of exceptions to a proposal for decision or, if provided for, replies to exceptions. After the date for filing exceptions or replies to exceptions and until the expiration of the statutory time period for filing a petition for rehearing, the commission may reopen a proceeding upon its own motion or motion of any party. Thus, to move to reopen a proceeding, the movant must be a party to the proceeding. Rehearings are governed by R , which provides: 1) A petition for rehearing after a decision or order of the commission shall be filed with the commission within 30 days after service of the decision or -9-

30 Attachment A Page 10 of 11 order of the commission unless otherwise specified by statute. A petition for rehearing based on a claim of error shall specify all findings of fact and conclusions of law claimed to be erroneous with a brief statement of the basis of the error. A petition for rehearing based on a claim of newly discovered evidence, on facts or circumstances arising subsequent to the close of the record, or on unintended consequences resulting from compliance with the decision or order shall specifically set forth the matters relied upon. The petition shall be accompanied by proof of service on all other parties to the proceeding. While this provision does not state who can move for rehearing, the PSC found below that this was governed by MCL (1), which provides that [a]n agency may order a rehearing in a contested case on its own motion or on request of a party. As noted by appellants, MCL (6) defines party in pertinent part as a person or agency named, admitted, or properly seeking and entitled of right to be admitted, as a party in a contested case. Under these provisions, the resolution to the question whether the PSC erred in finding that appellants could not move to reopen the proceedings or to request rehearing depends on appellants status. They were not parties, and we have concluded that the PSC did not act clearly unreasonably or unlawfully when it refused to allow appellants to intervene. Thus, we find that appellants cannot show that, under MCL (6), they were entitled of right to be admitted. Therefore, the PSC did not err when it would not allow appellants to move for rehearing or to reopen the case. Appellants also contend that the PSC erred when it ignored its power to sua sponte reopen the proceedings or grant rehearing. However, the fact that the PSC could have acted on its own motion does not equate to a finding that its decision not to do so is unreasonable or unlawful. Appellants point to the PSC s obligation to implement the power given it in 1929 PA 9, presumably a reference to MCL (providing the PSC the right to regulate gas supplies), and MCL (disallowing preferences) to support their position that the PSC has authority, and a responsibility, to require rehearing to explore whether the settlement agreement inappropriately benefited MichCon s customers over the choice customers. However, appellants did not raise this claim in their motion to reopen or for rehearing. And appellants cannot show that the PSC s actions clearly contradict the language of these provisions, or that the PSC was clearly derelict in its responsibilities. While appellants maintain that inequities must have occurred, they provided no direct evidence of this below, and do not do so now. Nor, as noted above, do appellants explain how the actual parties to the proceedings failed to advocate for choice customers. In addition, their claim that the PSC failed to consider the rights, if any, of the choice customers when deciding whether to approve the settlement agreement appears to be supported only by the somewhat circular argument that the PSC did not provide the relief appellants now seek. The approval of a proposed settlement agreement, which directly involves the PSC s administrative expertise, is entitled to great deference by this Court. This Court should not substitute its judgment for that of the PSC. Attorney General v Pub Service Comm, 237 Mich App 82, 94; 602 NW2d 225 (1999). Appellants have not shown the PSC s refusal to sua sponte reopen the proceedings or to rehear the case was clearly unlawful or unreasonable. V. Remand for Evidentiary Hearing Citing the lack of evidence concerning the fees and charges paid by choice customers or any corresponding benefits to them in the settlement agreement reached by the parties, appellants -10-

31 Attachment A Page 11 of 11 next argue that a remand for further evidentiary proceedings are required because the PSC s decision was not supported by any evidence on the record. We disagree. Appellants have not presented anything to support their position that this Court should or could simply order a remand to help appellants more fully develop their claims on appeal. In effect, such an action would amount to this Court stepping into the shoes of the PSC and granting appellants motion to reopen the case. Appellants have failed to introduce any supporting authority to show that this Court can sua sponte take notice of appellants alleged inequities between the choice and direct gas customers and direct the PSC to admit or consider specific evidence about this issue. Accordingly, we need not address this issue. Wilson, 457 Mich at 243. Even were we to reach this issue, appellants have failed to show that the PSC acted unlawfully or unreasonably. As discussed above, appellants claim that their interests are intertwined with those of the choice customers is at odds with NEMA s acknowledgement below to the contrary and is unpersuasive. In addition, appellants have presented no evidence to support a claim that MichCon s decision, or the settlement, treats choice customers unfairly. Appellants request for a remand appears to be a fishing expedition to enable them to obtain some support for their speculative assertions, which we decline. Affirmed. /s/ Richard A. Bandstra /s/ David H. Sawyer /s/ Donald S. Owens -11-

32 ATTACHMENT B

33 Attachment B Page 1 of N. Washington Square Suite 810 Lansing, Michigan Telephone 517 / Fax 517 / Eric J. Schneidewind ejschneidewind@varnumlaw.com February 2, 2010 Ms. Mary Jo Kunkle Michigan Public Service Commission 6545 Mercantile Way P.O. Box Lansing, MI Re: Case No. U Dear Ms. Kunkle: Attached for paperless electronic filing is Direct Energy Services LLC And Interstate Gas Supply, Inc.'s Joint Petition For Leave To Intervene. Also attached is the original Proof of Service indicating service on counsel. Thank you for your assistance in this matter. EJS/mrr Very truly yours, V ARNUM, LLP Eric J. Schneidewind Digitally signed by Eric J. Schneidewind DN: cn=eric J. Schneidewind, o, ou, =ejschneidewind@varnumla w.com, c=us Date: :49:11-05'00' Eric J. Schneidewind cc: ALJ parties Grand Haven Grand Rapids Kalamazoo Lansing Novi

34 Attachment B Page 2 of 10 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION *********************** In the matter of the application of ) CONSUMERS ENERGY COMPANY ) for approval of a gas cost recovery plan ) and authorization of gas cost recovery ) Case No. U factors for the 12-month period ) April March ) ) DIRECT ENERGY SERVICES LLC AND INTERSTATE GAS SUPPLY, INC.'S JOINT PETITION FOR LEAVE TO INTERVENE Direct Energy Services LLC ("Direct Energy") and Interstate Gas Supply, Inc. ("IGS Energy"), collectively "Gas Choice Intervenors", by and through their counsel Varnum hereby file this Petition for Leave to Intervene (the "Petition") requesting that the Michigan Public Service Commission ("Commission") grant their intervention in these proceedings pursuant to Rule of the Commission Rules of Practice and Procedure and the Michigan Administrative Procedure Act MCL , et seq. In support of this Petition, Gas Choice Intervenors state as follows: 1. Direct Energy is an independent retail supplier of natural gas and electricity. Direct Energy is licensed to operate as an Alternate Gas Supplier ("AGS") within Michigan pursuant to 2002 PA 634 by Order of the Commission. Case U-14537, June 16, Direct Energy serves thousands of Gas Customer Choice customers on the system of Consumers Energy Company ("Consumers "). 2. Interstate Gas Supply Inc. ("IGS") is an independent retail supplier of natural gas. IGS is licensed to operate as an Alternate Gas Supplier ("AGS") within Michigan pursuant to 2002 PA 634 by Order of the Commission. Case U-14075, March 29, IGS serves thousands of Gas Customer Choice customers on the system of Consumers. 1

35 Attachment B Page 3 of Case U was initiated by Consumers on December 30, 2009 to request approval of its 2010 through 2011 Gas Cost Recovery ("GCR") Plan, five year forecast and monthly GCR factor for the 12 months ending March 31, Among the provisions of the filing which may directly affect Gas Choice customers served by Gas Choice Intervenors are projections of Gas Choice load as well as the method used to collect under charges and refund over charges. Provisions of the filing directly affecting Gas Choice Intervenors include the GCR factor proposed by Consumers. 4. As suppliers of thousands of Gas Choice customers on the Consumers system, Gas Choice Intervenors assert that the Gas Choice customers of Gas Choice Intervenors will be directly affected by proposals contained in the Consumers filing. This is because the projections of Gas Choice customer usage may be inaccurate causing misallocation of costs to Gas Choice customers. Also, the overcharge refund and under charge collection practices employed by Consumers may force Gas Choice customers returning to bundled service to pay commodity costs incurred at a time when they did not purchase bundled service. 5. Gas Choice Intervenors are directly and potentially adversely affected by the proposed GCR factor contained in the Consumers filing because the specific Gas Cost Recovery factors ("GCR factors") directly affect the price paid by Consumers to Gas Choice Intervenors for gas supplies which they deliver to Consumers each month and the cost of penalties paid by Gas Choice Intervenors to Consumers. Under Consumers General Tariff Provisions F1L and F1M Gas Choice Intervenors are required to deliver supplies of natural gas to Consumers each month for the GCC customers served by Gas Choice Intervenors. The price paid by Consumers to Gas Choice Intervenors each month under Tariff Provision F1L and the price paid for excessive deliveries under Tariff Provision F1M are directly linked to the cost of gas billed to sales customers by Consumers pursuant to Rule C7 (the "GCR Rule"). The monthly payment to Gas Choice Intervenors is the lower of the price per Mcf billed to Gas Choice Intervenors' customers charge schedules or 110% of the cost established in the GCR process. Consumers Tariff Provision F1L.. 2

36 Attachment B Page 4 of 10 In the annual reconciliation for Gas Choice providers, where excess deliveries have occurred and the weighted price billed to customers is higher than the GCR price, the excess amount is returned to Gas Choice Intervenors. Consumers Tariff Provision F1M. Therefore, the price of gas established in this GCR proceeding has a direct and potentially adverse impact upon the Gas Choice Intervenors regarding the price paid for their gas deliveries to Consumers. Finally, if Gas Choice Intervenors deliver less gas than is used by their customers during a month, the Intervenors must pay $6 per MMBTU plus the higher of the spot market price or the GCR price. Consumers Tariff Provision F1J. 6. Gas Choice Intervenors therefore satisfy the so-called "two prong" test for intervention "of right" set forth in Association of Data Processing Service Organization, Inc. v Camp, 397 US 150; 90 S Ct 827; 25 L. Ed. 184 (1970) ("Associated Data"). The Associated Data two prong test requires a showing that: a. The petitioner would likely suffer an injury in fact because its interests are at stake or are threatened; and b. The interests of the petitioner are within the zone of interest to be protected or regulated by the statute under consideration. 7. Injury In Fact Gas Choice Intervenors supply retail natural gas Customer Choice service throughout the Consumers service territory and intend to actively pursue offering and providing this service to customers served by Consumers. Moreover, Gas Choice Intervenors represent the interests of thousands of Gas Choice customers who would likely suffer an injury in fact caused by proposals contained in the filing of Consumers in this matter. 3

37 Attachment B Page 5 of 10 Impact on GCC Customers Consumers' practice of refunding amounts collected directly and adversely affects the price paid for gas by the customers of the Gas Choice Intervenors who discontinue taking service under the Gas Choice program. Those customers may suffer an injury in fact because they are forced to pay out of period costs of gas. Also, the Consumers' projections of Gas Choice customer usage appear to be inaccurate and these projections may be used to allocate unreasonable amounts of system costs including storage costs to Gas Choice customers. Impact on GCC Suppliers The price set for the GCR in this proceeding will have a direct impact on the price paid by Gas Choice Intervenors to Consumers for under deliveries under Tariff Provision F1J and the price paid each month to Gas Choice Intervenors by Consumers for supplies of gas which they deliver to Consumers for the reasons stated in Paragraph 5 above. See Consumers Tariff Provisions F1J and F1L. Also the GCR rate will have a direct impact on the adjustments made to monthly remittances to Gas Choice Intervenors under Provision F1M as part of the annual reconciliation. Therefore the specific level of the GCR set in this case will have a direct and potentially adverse impact on remittances paid to and by Gas Choice Intervenors under Consumers Tariff Provisions F1J, F1L and F1M. 8. Zone of Interest Gas Choice Customers The interests of customers of Gas Choice Intervenors in fair and reasonable cost allocation and surcharge and refund procedures are within the Zone of Interest encompassed by the GCR statutes. Gas Choice customers benefit from surcharge and refund procedures and usage estimates which correctly match costs of service to Gas Choice customers with revenue from those customers and avoid imposing unfair prices or penalties on Gas Choice customers who return to GCR service. 4

38 Attachment B Page 6 of 10 Gas Choice Intervenors The interest of the Gas Choice Intervenors in fair and reasonable GCR levels are within the zone of interest encompassed by the GCR statutes and the tariff provisions of Consumers at F1J, F1l and F1M because the GCR rate governs charges which are paid by and to Gas Choice Intervenors. Therefore, Gas Choice Intervenors have much the same interest as GCR customers in achieving a fair and reasonable GCR since the GCR is used to set the price that Gas Choice Intervenors will pay to Consumers for under deliveries and that Gas Choice Intervenors will receive for supplies of gas which they deliver to Consumers. Permissive Standing 9. Gas Choice Intervenors also satisfy the requirements for "permissive" standing. As major suppliers of Gas Choice service in Michigan and throughout the United States, Gas Choice Intervenors possesses experience and background which will enable them to provide unique and useful information to the Commission in this proceeding and thus will further the development of a complete record. Precedent 10. There is substantial precedent for the grant of intervenor status to Alternate Gas Suppliers in utility rate related proceedings. Since Gas Choice Intervenors serve thousands of customers directly affected by the utility proposals in this case they are entitled to intervenor status In a Michigan Consolidated case involving the sale of gas intervention was denied to National Energy Markers ("NEMA") on the basis that NEMA did not have customers. U-15628, 1 Tr 27. Therefore, intervention on a permissive basis should be granted to Gas Choice Intervenors because they serve thousands of Consumers customers. In Case U regarding the rates of Michigan Consolidated, the Commission granted intervenor status to the Constellation NewEnergy Gas Division, LLC ("CNE") and Interstate Gas 5

39 Attachment B Page 7 of 10 Service on a permissive basis without limitation regarding subject matter. 2 Tr Both of these entities are licensed Alternate Gas Suppliers ("AGSs") of natural gas to customers on the Michigan Consolidated system. The presiding ALJ cited, among other things, the possibility that the AGSs will bring issues that are not stated in the Application and may not be put in the first round of Testimony. 2 Tr 52. In Case U NEMA was granted intervenor status on the grounds that the case would affect customers served by members of NEMA. Order U-15768, January 11, 2010, p. 8. In this case both Gas Choice Intervenors have thousands of customers taking Gas Choice service from Consumers. The rates paid by these customers may be directly affected by Consumers' projections of GCC sales and by the Consumers GCR surcharge and refund practices which do not charge costs to the customers causing those costs. In two other rate cases for Michigan Gas Utilities the Commission granted intervenor status on a permissive basis to CNE because the relief requested by the utility potentially affected the interests of Constellation customers. See Cases U and U Finally, under Consumers Tariff Provisions F1J, F1L and F1M, the GCR price established in this case can be used as a basis for billings to and payments by Gas Choice Intervenors. These tariff provisions place Gas Choice Intervenors in the position of GCR customers who are directly affected by the GCR prices established in this case. 11. As a party to this proceeding Gas Choice Intervenors will take the position that the terms of the GCR pricing process and related programs must be just, reasonable and not unduly burdensome on Gas Choice Intervnors or their customers who take service under the Gas Choice program. 12. The interests of Gas Choice Intervenors and their customers as set forth above are not adequately represented by other parties and therefore it would be detrimental to the public interest to deny this Petition to Intervene. 6

40 Attachment B Page 8 of 10 WHEREFORE, Petitioner Gas Choice Intervenors respectfully request that the Commission: A. Grant the Gas Choice Intervenors Petition for Intervention; and B. Grant such other and further relief as deemed lawful and appropriate. Respectfully submitted, February 2, 2010 Varnum, LLP Attorneys for Gas Choice Intervenors Eric J. Schneidewind Digitally signed by Eric J. Schneidewind DN: cn=eric J. Schneidewind, o, ou, =ejschneidewind@varnumlaw. com, c=us By: Date: :49:27-05'00' Eric J. Schneidewind (P20037) The Victor Center, Suite N. Washington Square Lansing, Michigan /

41 Attachment B Page 9 of 10 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION *********************** In the matter of the application of ) CONSUMERS ENERGY COMPANY ) for approval of a gas cost recovery plan ) and authorization of gas cost recovery ) Case No. U factors for the 12-month period ) April March ) ) Monica Robinson, duly sworn, deposes and says that on February 2, 2010 she served a copy of Direct Energy Services LLC And Interstate Gas Supply, Inc.'s Joint Petition For Leave To Intervene upon the individuals listed on the attached service list by and regular mail at their last known addresses. Monica Robinson Digitally signed by Monica Robinson DN: cn=monica Robinson, o, ou, =mrrobinson@varnumlaw. com, c=us Monica Robinson Date: :49:49-05'00' Subscribed and sworn to before me this 2nd day of February Eric J. Schneidewind Digitally signed by Eric J. Schneidewind DN: cn=eric J. Schneidewind, o, ou, =ejschneidewind@varnumlaw.com, c=us Date: :50:01-05'00' Eric J. Schneidewind, Notary Public Eaton County, Michigan Acting in Ingham County, Michigan My Commission Expires: April 24, 2012

42 Attachment B Page 10 of 10 SERVICE LIST CASE U Consumers Energy H. Richard Chambers Consumers Energy Company One Energy Plaza Jackson, MI hrchambers@cmsenergy.com mpscfilings@cmsenergy.com Anne Uitvlugt Patricia S. Barone Assistant Attorney General-PSC Division 6545 Mercantile Way, Suite 15 Lansing, MI uitvlugta@michigan.gov baronep@michigan.gov

43 ATTACHMENT C

44 Attachment C Page 1 of 8 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter of the application of ) CONSUMERS ENERGY COMPANY for ) approval of a gas cost recovery plan and ) Case No. U authorization of gas cost recovery factors for the ) 12-month period April 2010 through March ) ) At the March 18, 2010 meeting of the Michigan Public Service Commission in Lansing, Michigan. PRESENT: Hon. Orjiakor N. Isiogu, Chairman Hon. Monica Martinez, Commissioner Hon. Greg R. White, Commissioner ORDER History of Proceedings On December 30, 2009, Consumers Energy Company (Consumers) filed an application, with supporting testimony and exhibits, requesting approval of its gas cost recovery (GCR) plan and factors for the 12-month period ending March 31, Consumers application was filed pursuant to Section 6h of 1982 PA 304 (Act 304), MCL 460.6h. A prehearing conference was held February 9, 2010 before Administrative Law Judge Mark D. Eyster (ALJ). At the prehearing conference, the ALJ granted petitions to intervene filed by Attorney General Michael A. Cox (Attorney General), the Residential Ratepayer Consortium (RRC), and the Michigan Community Action Agency Association (MCAAA). The Commission Staff (Staff) also participated in the proceedings. Over the objections of Consumers, the Staff, and

45 Attachment C Page 2 of 8 the Attorney General, the ALJ also granted permissive intervention to Direct Energy Services, LLC, and Interstate Gas Supply, Inc. (together, Direct Energy). On February 23 and 24, 2010, Consumers, the Staff, and the Attorney General filed applications for leave to appeal the grant of permissive intervention to Direct Energy, pursuant to 1999 AC, R (Rule 337). On March 4, 2010, Direct Energy filed a response to those applications. Positions of the Parties The Staff, Consumers, and the Attorney General claim that the Commission should grant their respective applications for leave to appeal because doing so would materially advance a timely resolution of the case and would prevent substantial harm to the public. The Staff posits that absent timely resolution, Direct Energy could use the discovery process to obtain information useful to them as competitors. In addition, the Staff asserts that Direct Energy could impede the speedy resolution of the case by raising tariff matters that are outside the scope of an Act 304 proceeding. Consumers and the Staff argue that the ALJ correctly found that Direct Energy did not have standing as of right to intervene in this Act 304 proceeding because Direct Energy does not purchase gas from Consumers, nor does it supply gas to Consumers. They assert, however, that the ALJ erred in granting permissive intervention because Direct Energy s interests are contrary to the interests that Act 304 is intended to protect. Specifically, the Staff points out that the purpose of this proceeding is to evaluate the reasonableness of Consumers forecast and purchasing strategies and to set a reasonable GCR factor for the plan year for Consumers GCR customers. Consumers observes that it would be to Direct Energy s competitive advantage to have the GCR factor set as high as possible, and the Staff adds that Direct Energy s stated reasons for Page 2 U-16149

46 Attachment C Page 3 of 8 intervention (fees, fines, and reimbursements that are tied to the GCR factor) are tariff issues that should be addressed in a general rate case. As such, Consumers and the Staff maintain that Direct Energy does not meet the two-prong test for intervention in this proceeding. Likewise, the Attorney General argues that permissive intervention should not have been granted because Direct Energy did not allege an injury-in-fact, nor did it show that its interests are within the zone of interests to be regulated or protected by Act 304. In response, Direct Energy argues that the ALJ correctly granted permissive intervention in accordance with the facts presented in this case. Direct Energy claims that the ALJ properly found that: 1) the standard for permissive intervention is much lower than that for intervention of right; 2) the facts alleged by Direct Energy in support of its petition to intervene are unique; 3) Direct Energy has something to add to the proceeding; and 4) Direct Energy s participation should be limited to the interests of the alternative gas suppliers (AGSs) and should not extend to competitive issues. Direct Energy claims that issues regarding the fees, fines, and reconciliations that are directly affected by the GCR factor have never been raised before in a GCR proceeding and therefore the opposing parties citations to prior cases, where intervention was denied, are inapplicable. Direct Energy further asserts that because its customers would be prejudiced by the inaccurate projection of gas customer choice (GCC) usage, with the possibility of fees or fines imposed by Consumers, it demonstrated an injury analogous to the possible injury to GCR customers if the company s projections are incorrect. Moreover, because any fines paid by Direct Energy are tied to the approved GCR factor, Direct Energy has shown that its interests are within the zone to be regulated or protected by Act 304. Page 3 U-16149

47 Attachment C Page 4 of 8 Discussion The Commission has consistently applied a two-pronged test in determining whether a prospective intervenor in a Commission proceeding has demonstrated a sufficient interest to merit intervention. See, e.g., February 3, 2009 order in Case No. U-15628, p. 8. The test is derived from a federal test for standing established in Association of Data Processing Service Organizations, Inc v Camp, 397 US 150; 90 S Ct 827; 25 L Ed 2d 184 (1970). To meet this test, a potential intervenor must show that it has or will suffer an injury-in-fact from the complained-of action and that its interests fall within the zone of interests intended to be protected or regulated by the statute in question. Direct Energy argues that pursuant to various tariffs, if it fails to deliver sufficient gas to Consumers each month, it must pay a fine equal to $6.00 per million British thermal units plus the higher of the spot market price or GCR price. In addition, Consumers is required to pay Direct Energy for monthly gas deliveries an amount that is the lesser of the price billed to Direct Energy s customers or 110% of the GCR price, and the annual reconciliation of the fees paid by Consumers to Direct Energy is in part dependent on the GCR factor set in this case. Direct Energy therefore maintains that if the GCR factor is improperly set, it will harm Direct Energy and its customers. As such, Direct Energy asserts that it has alleged a concrete injury that meets the requirements of the first prong of the test for intervention. The Commission disagrees. The injuries that Direct Energy complains of are speculative at best, and largely under the control of Direct Energy. Indeed, Direct Energy piles supposition on top of supposition (i.e., if the GCR factor is set too high and if Direct Energy falls short in its deliveries, then a fine tied to the GCR factor will have to be paid) to finally arrive at its alleged injury-in-fact. The Commission finds that this hypothetical injury is insufficient to confer standing on Direct Energy. As the Court Page 4 U-16149

48 Attachment C Page 5 of 8 of Appeals has held, [t]o be aggrieved, one must have some interest of a pecuniary nature in the outcome of the case, and not a mere possibility arising from some unknown and future contingency. Grace Petroleum Corp v Public Service Com n, 178 Mich App 309, ; 443 NW2d 790 (1989). Likewise in National Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608, 628; 684 NW2d 800 (2004), our Supreme Court affirmed that standing, in part, consists of an injury in fact -an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. The Commission is likewise unpersuaded by Direct Energy s other alleged injuries that might result from the approval of an incorrect GCR factor. The Commission further finds that Direct Energy s interests in an Act 304 proceeding are not within the zone of interests to be protected by the statute and indeed are antithetical to its purposes. As the opposing parties have pointed out, the objective of Act 304 is narrow. The focus of the review in a GCR plan case centers on evaluating a regulated gas company s GCR plan and establishing GCR factors. MCL 460.6h(5). GCR cases do not address the terms and conditions of GCC tariffs, nor do they address the effects of implementation of GCC tariffs; these issues should be taken up in a general rate case. In summary, the Commission finds that Direct Energy does not meet the Commission s twopronged test for intervention of right, nor does the Commission find that granting permissive intervention to Direct Energy is justified. Any purported interest that Direct Energy may have in this proceeding is adequately represented by other parties in the case who also seek to establish a reasonable GCR factor. Page 5 U-16149

49 Attachment C Page 6 of 8 THEREFORE, IT IS ORDERED that: A. The applications for leave to appeal filed by Consumers Energy Company, the Commission Staff, and the Attorney General are granted, and the relief requested is also granted. B. The decision of the Administrative Law Judge to grant the joint petition to intervene filed by Direct Energy Services, LLC and Interstate Gas Supply, Inc. is reversed, and the joint petition to intervene is denied. 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, under MCL MICHIGAN PUBLIC SERVICE COMMISSION Orjiakor N. Isiogu, Chairman Monica Martinez, Commissioner By its action of March 18, Greg R. White, Commissioner Mary Jo Kunkle, Executive Secretary Page 6 U-16149