ONTONAGON COUNTY RURAL ELECTRIFICATION …threshold by aggregating or summing the Maximum Demands for each metering point occurring during a single month. The applicable rate schedule

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 )

ONTONAGON COUNTY RURAL )

ELECTRIFICATION ASSOCIATION for approval of )

revisions to its Retail Access Service Tariff, Large ) Case No. U-17475

Power Service Rate-Choice Schedule LP-C, and its )

Large Power Service Rate-Choice Schedule LP-1-C. )

)

At the October 17, 2013 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. John D. Quackenbush, Chairman

Hon. Greg R. White, Commissioner

Hon. Sally A. Talberg, Commissioner

ORDER

On September 10, 2013, Ontonagon County Rural Electrification Association (Ontonagon)

filed an application requesting ex parte approval of revisions to Ontonagon’s Retail Access

Service Tariff, Large Power Service Rate-Choice, Schedule LP-1-C, and Large Power Service

Rate-Choice, Schedule LP-C.

In its application, Ontonagon notes that it transitioned to member regulation pursuant to 2008

PA 167 (Act 167) and the Commission’s October 11, 2012 order in Case No. U-17069. Pursuant

to Act 167, Ontonagon is exempt from Commission regulation of rates, charges, accounting

standards, billing practices, and terms and conditions of service. However, the Commission

retains jurisdiction over matters involving customer choice. Ontonagon requests that the

Commission authorize the company to revise its tariffs addressing choice, i.e., its Retail Access

Page 2

U-17475

Service Tariff, Large Power Service Rate-Choice, Schedule LP-1-C, and Large Power Service

Rate-Choice, Schedule LP-C. After filing its application, Ontonagon discovered that in order to

reflect the changes, additional changes to the Index were necessary – Section D Rate Schedules,

and the Energy Optimization Clause Tariff.

Ontonagon’s proposed tariff and Index changes are a result of the 2008 amendment to

MCL 460.10x(1), the statute governing electric choice for electric cooperatives. The statute now

provides that “[a]ny retail customer of a cooperative with a peak load of 1 megawatt or greater

shall be provided the opportunity to choose an alternative electric supplier….” Accordingly,

Ontonagon proposes to increase the Maximum Demand requirement in the Retail Access Service

Tariff from 150 kilowatts (kw) to one megawatt (MW). Ontonagon believes ex parte approval of

the tariff and Index changes is appropriate because the company currently has no customers taking

service under the affected rates.

On September 26, 2013, UP Power Marketing LLC (UP Power) filed a petition to intervene,

stating that it is interested in the implementation of rates, tariffs, operating procedures, standards

of conduct, rules, and policies that “will have an impact on ensuring that retail and open access

customers in Michigan have a meaningful choice of electric suppliers pursuant to PA 286 and PA

141.” Petition, pp. 2-3. UP Power asserts that, if it is allowed to intervene, it will take the position

that “the proposed increase from 150 kw to 1 MW Maximum Demand should not be implemented,

if at all, until the term of already-executed contract(s) between Ontonagon and UPPM has

expired….” Id., p. 5.

The Commission approves Ontonagon’s application and denies UP Power’s petition to

intervene. Pursuant to MCL 460.10x(1), Ontonagon’s requested tariff and Index changes are

specifically authorized by statute: electric cooperatives must provide retail customers with a peak

Page 3

U-17475

load of one MW or more with access to electric choice. The Commission does not have statutory

authority to require electric cooperatives such as Ontonagon to provide electric choice to retail

customers with peak loads of less than one MW.

In addition, the Commission notes that paragraph 1.2 on p. 2 of the September 17, 2013

contract between the parties states that, “The relationship of the parties is governed by this

Agreement, the Act 141, Utility’s effective Retail Access Service Tariff and other tariffs (as

such may be amended from time to time), any other agreements of the parties, as well as

applicable laws, codes and regulations.” The Commission finds that, pursuant to the

contract, UP Power agreed that the Retail Access Service Tariff was subject to amendment

at any time.

Pursuant to MCL 460.6a(1), the Commission finds that ex parte review and approval of the

application is appropriate because the tariff and Index changes will not affect rates or rate

schedules resulting in an increase in the cost of service to customers.

THEREFORE, IT IS ORDERED that:

A. Ontonagon County Rural Electrification Association’s proposed tariff and Index revisions,

as set forth on Exhibit A, are approved.

B. Within 30 days of the date of this order, Ontonagon County Rural Electrification

Association shall file tariff sheets essentially the same as those attached to this order.

C. UP Power Marketing LLC’s petition to intervene is denied.

The Commission reserves jurisdiction and may issue further orders as necessary.

Page 4

U-17475

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 462.26.

MICHIGAN PUBLIC SERVICE COMMISSION

________________________________________

John D. Quackenbush, Chairman

________________________________________

Greg R. White, Commissioner

________________________________________

Sally A. Talberg, Commissioner

By its action of October 17, 2013.

________________________________

Mary Jo Kunkle, Executive Secretary

No. 4 - ElectricThe Ontonagon County Rural Original Sheet No. D-11.00Electrification Cooperative

(Continued on Sheet No. D-11.01)

Issued Effective for service rendered on andBy: Debbie Miles afterGeneral Manager Issued under the authority of the BoardOntonagon, Michigan of Directors dated

SCHEDULE LP-1-CLARGE POWER SERVICE RATE-CHOICE

Availability:

Subject to the Rules and Regulations of the Cooperative and its Retail Access Service Tariff, this scheduleis available to Member-Consumers eligible to be taking service under the Cooperative’s Large PowerService Rate, Schedule LP-1. Service under this rate is for delivery of power from the Point ofDistribution Receipt to the Point of Distribution Delivery and is subject to the following conditions:

1. The Member-Consumer must have a Maximum Demand of at least 1 MW. Individual Member-Consumers receiving demand metered service at multiple metering points and eligible to betaking service under the Cooperative’s Schedule LP may achieve the 1 MW Maximum Demandthreshold by aggregating or summing the Maximum Demands for each metering point occurringduring a single month. The applicable rate schedule will apply to all aggregated metering pointson an individual account basis.

2. The Member-Consumer must enter a Retail Access Service Agreement with the Cooperative.

3. The transmission of power to the Distribution Point of Receipt and all related costs shall be theresponsibility of the Member-Consumer and/or Alternative Electric Supplier (AES).

4. The Member-Consumer must agree to purchase any default energy delivered pursuant toSchedule RASS-Retail Access Standby Service in addition to the service specified herein.

Billing Rate:

Demand Charge: $1.22 per kW

Variable Distribution Charge: 3.43¢ per kWh

Energy Optimization Surcharge:This rate is subject to the Energy Optimization Surcharge shown on Sheet No. D-1.03.

Determination of Billing Demand:

The billing demand shall be the maximum kilowatt demand established by the Member-Consumer for any period of fifteen consecutive minutes during the month for which the bill is rendered,as indicated or recorded by a demand meter and adjusted for power factor as follows:

EXHIBIT A



Issued March 5, 2013 Effective for service rendered on andBy: Debbie Miles after February 26, 2013General Manager Issued under the authority of the Board

SCHEDULE LP-1-CLARGE POWER SERVICE RATE-CHOICE (Contd)

(Continued from Sheet No. D-11.00)

Power Factor Adjustment

The Member-Consumer agrees to maintain unity power factor as nearly as possible. Power factor may bemeasured at any time. Should such measurements indicate that the power factor at the time of maximumdemand is less than 90 percent, the demand for billing purposes shall be multiplied by the demand asindicated or recorded by the demand meter, multiplied by 90 percent and divided by the percent powerfactor.

Minimum Monthly Charge

The minimum monthly charge shall be the Demand Charge but not less than the Demand Charge for 1MW, plus the Energy Optimization Surcharge amount shown on Sheet No. D-1.03.

Sales Tax

Michigan State Sales Tax will be added where applicable.

Tax Adjustments

A. Bills shall be increased within the limits of political subdivisions which levy specialtaxes, license fees or rentals against the Cooperative’s property, or it operations, or theproduction and/or sale of electric energy, to offset such special charges and therebyprevent other Member-Consumers from being compelled to share such local taxes.

B. Bills shall be increased to offset any new or increased specific tax or excise imposed byany governmental authority which increases the Cooperative’s cost of providingelectric service.

Terms of Payment

A. A one-time late payment charge of two percent of the unpaid balance, net of taxes, willbe assessed on any bill which is delinquent.

B. Billings are due 21 days from the date of rendition for payment in full.




SCHEDULE LP-CLARGE POWER SERVICE RATE - CHOICE

Availability:

Subject to the Rules and Regulations of the Cooperative and its Retail Access Service Tariff, this scheduleis available to Member-Consumers eligible to be taking service under the Cooperative’s Large PowerService Rate, Schedule LP. Service under this rate is for delivery of power from the Point of DistributionReceipt to the Point of Distribution Delivery and is subject to the following conditions:

1. The Member-Consumer must have a Maximum Demand of at least 1 MW. Individual Member-Consumers receiving demand metered service at multiple metering points and eligible to betaking service under the Cooperative’s Schedule LP may achieve the 1 MW Maximum Demandthreshold by aggregating or summing the Maximum Demands for each metering point occurringduring a single month. The applicable rate schedule will apply to all aggregated metering pointson an individual account basis.

2. The Member-Consumer must enter a Retail Access Service Agreement with the Cooperative.

3. The transmission of power to the Distribution Point of Receipt and all related costs shall be theresponsibility of the Member-Consumer and/or Alternative Electric Supplier (AES).

4. The Member-Consumer must agree to purchase any default energy delivered pursuant toSchedule RASS-Retail Access Standby Service in addition to the service specified herein.

Type of Service

Single or triple-phase, 60 cycle, at Cooperative’s standard or secondary voltages.

Billing Rate

Demand Charge: $0.00 per kW

Variable Distribution Charge: 5.93¢ per kWh

Energy Optimization Surcharge:This rate is subject to the Energy Optimization Surcharge shown on Sheet No. D-1.03.



SCHEDULE LP-CLARGE POWER SERVICE RATE-CHOICE (Contd)


Determination of Billing Demand

The billing demand shall be the maximum kilowatt demand established by the Member-Consumer for any period of fifteen consecutive minutes during the month for which the bill isrendered, as indicated or recorded by a demand meter and adjusted for power factor as follows:


The consumer agrees to maintain unity power factor as nearly as possible. Power factor may bemeasured at any time. Should such measurements indicate that the power factor at the time ofmaximum demand is less than 90 percent, the demand for billing purposes shall be multiplied bythe demand as indicated or recorded by the demand meter, multiplied by 90 percent and dividedby the percent power factor.


The minimum monthly charge shall be the Demand Charge but not less than the Demand Chargefor 1 MW.

Sales Tax


Tax Adjustments

A. Bills shall be increased within the limits of political subdivisions which levyspecial taxes, license fees or rentals against the Cooperative’s property, or itoperations, or the production and/or sale of electric energy, to offset such specialcharges and thereby prevent other Member-Consumers from being compelled toshare such local taxes.

B. Bills shall be increased to offset any new or increased specific tax or exciseimposed by any governmental authority which increases the Cooperative’s cost ofproviding electric energy



SCHEDULE LP-CLARGE POWER SERVICE RATE-CHOICE (Contd)


Determination of Billing Demand

The billing demand shall be the maximum kilowatt demand established by the Member-Consumer for any period of fifteen consecutive minutes during the month for which the bill isrendered, as indicated or recorded by a demand meter and adjusted for power factor as follows:


The consumer agrees to maintain unity power factor as nearly as possible. Power factor may bemeasured at any time. Should such measurements indicate that the power factor at the time ofmaximum demand is less than 90 percent, the demand for billing purposes shall be multiplied bythe demand as indicated or recorded by the demand meter, multiplied by 90 percent and dividedby the percent power factor.


The minimum monthly charge shall be the Demand Charge but not less than the Demand Chargefor 50 kW1 MW.

Sales Tax


Tax Adjustments

A. Bills shall be increased within the limits of political subdivisions which levyspecial taxes, license fees or rentals against the Cooperative’s property, or itoperations, or the production and/or sale of electric energy, to offset such specialcharges and thereby prevent other Member-Consumers from being compelled toshare such local taxes.

B. Bills shall be increased to offset any new or increased specific tax or exciseimposed by any governmental authority which increases the Cooperative’s cost ofproviding electric energy.

M.P.S.C. No. 3 - ElectricThe Ontonagon County Rural Original Sheet No. E-1.00Electrification Cooperative(Reformatted Rate Book)

SECTION ERETAIL ACCESS SERVICE TARIFF

(Continued on Sheet No. E-1.01)Issued September 10, 2013 Effective for service rendered on and afterBy: Debbie Miles October 10, 2007General ManagerOntonagon, Michigan Issued under authority of the Michigan

Public Service Commission dated October

1.0 INTRODUCTION AND DEFINITIONS

This tariff expresses the terms and conditions associated with Retail Access Service and providesinformation regarding the roles of the various market participants. This tariff includes the followingsections:

Introduction and Definitions Section 1.0Member-Consumer Section Section 2.0Alternative Electric Supplier Section Section 3.0Dispute Resolution Section 4.0Liability and Exclusions Section 5.0

When a Member-Consumer participates in Retail Access Service and obtains Generation Services froman Alternative Electric Supplier (AES), the Cooperative will maintain a relationship and interact with theseparate participants – including the Member-Consumer, the Transmission Service Provider, and theAES.

1.1 The Member-Consumer Role

The Member-Consumer is the end-user of Power in the State of Michigan who has facilities connected tothe Cooperative's Distribution System. Under Retail Access Service, the Member-Consumer will conducttransactions with at least two participants – including the Cooperative and an AES. TheMember-Consumer is responsible for choosing an AES. Member-Consumers may receive transmissionservice directly from the Transmission Service Provider or the AES may make such arrangements as partof its service to the Member-Consumer.

The Cooperative’s principal requirement is that the Member-Consumer must be eligible to be takingservice under the Cooperative’s Schedule Large Power Service Schedules (Schedule LP or Schedule LP-1) and have a Maximum Demand of at least 1 MW. An Individual Member-Consumer currently demandmetered and taking service under the Cooperative’s Schedule LP may achieve the 1 MW MaximumDemand threshold by aggregating or summing the Maximum Demands for each metering point occurringduring a single month. All charges or fees specified herein and all related rate schedules apply toaggregated metering points on an individual account basis.

M.P.S.C. No. 3 - ElectricThe Ontonagon County Rural Original Sheet No. E-1.07Electrification Cooperative(Reformatted Rate Book)

RETAIL ACCESS STANDBY SERVICESCHEDULE RASS

(Continued from Sheet No. E.-1.06

Issued September 10, 2013 Effective for service rendered on and afterBy: Debbie Miles October 10, 2007General ManagerOntonagon, Michigan Issued under authority of the Michigan

Public Service Commission dated October

2.0 MEMBER-CONSUMER SECTION

2.1 Availability

Retail Access Service is available to all existing or new Member-Consumers that meet the terms andconditions of this Retail Access Service tariff and other applicable Cooperative tariffs, subject tocontracting with an AES.

2.2 Eligibility

2.2.1 A Member-Consumer’s eligibility to take Retail Access Service is subject to the fullsatisfaction of any terms or conditions imposed by pre-existing contracts with or tariffs of theCooperative. Member-Consumers must have satisfied any past due amounts for RegulatedElectric Service owed to the Cooperative under any other arrangements or provisions forRegulated Electric Service before taking service under this tariff.

2.2.2 An Individual Member-Consumer who is eligible to be taking service under theCooperative’s Schedules LP or LP-1, and having a demand meter registering with aMaximum Demand of at least 1 MW is eligible to take service under this tariff. AnIndividual Member-Consumer receiving demand metered service at multiple metering pointsand who is eligible to be taking service under the Cooperative’s Schedule LP may achievethe 1 MW Maximum Demand threshold by aggregating or summing the Maximum Demandsfor each metering point occurring during a single month. All charges or fees specified hereinand all related rate schedules apply to aggregated metering points on an account individualbasis.

No. 4 - Electric

The Ontonagon County Rural Original Sheet No. A-2.05

Electrification Association

INDEX

(Continued from Sheet No. A-2.04)

SECTION D

RATE SCHEDULES

Sheet No.

(Continued on Sheet No. A-2.06)

Issued October 10, 2013May 1, 2013

By: Debbie Miles

General Manager

Power Supply Cost Recovery Clause D-1.00

Requirements for Pole Attachments D-2.00

Requirements for Operation of Parallel Generation Facilities D-3.00

Schedule A D-4.00

Schedule AH D-5.00

Schedule AS – Seasonal Residential Service D-6.00

Schedule B – General Service D-7.00

Schedule LP – Large Power Service D-8.00

Schedule LP-1 – Large Power (Over 150 kW) D-9.00

Schedule SA-A – Street Lighting Service D-10.00

Schedule LP-1-C – Large Power Service Rate – Choice (Over 1 MW) D-11.00

Schedule LP-C – Large Power Service Rate – Choice D-12.00

Net Metering Program D-13.00

No. 4 - Electric

The Ontonagon County Rural Original Sheet No. D-1.03

Electrification Association

LAN01\323070.1 ID\SMJO - 025203\0999

ENERGY OPTIMIZATION PROGRAM CLAUSE

This clause permits, pursuant to Section 89 of 2008 PA 295, the adjustment of distribution rates, via the

application of an Energy Optimization Surcharge, to allow recovery of the energy optimization program

costs incurred by the Cooperative in compliance with Section 89 of 2008 PA 295.

An energy optimization cost reconciliation shall be conducted annually.

The approved Energy Optimization Surcharges are shown below.

ENERGY OPTIMIZATION SURCHARGES

2012-2015

Sheet No. Rate Schedule $/kWh

D-4.00 Schedule A $0.00275

D-5.00 Schedule AH $0.00275

D-6.00 Schedule AS – Seasonal Residential Service $0.00275

2012-2015

Sheet No. Rate Schedule $/meter/month

D-7.00 Schedule B – General Service $1.85

D-8.00 Schedule LP –Large Power Service $19.25

D-9.00 Schedule LP 1 – Large Power Service (over 150 kW) $140.03

D-11.00 Schedule LP-1-C – Large Power (Over 1 MW – Choice ) $140.03

D-12.00 Schedule LP-C - Large Power Service Rate – Choice $19.25

Documents

ONTONAGON COUNTY RURAL ELECTRIFICATION …threshold by aggregating or summing the Maximum Demands for each metering point occurring during a single month. The applicable rate schedule