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Exhibit D-8
STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
* * * * *
In the matter of the application of)
EDISON SAULT ELECTRIC COMPANY)
for the classification of its transmission and)
Case No. U-12690
distribution facilities and related transactions.)
At the December 20, 2000 meeting of the Michigan Public Service Commission
in Lansing, Michigan.
PRESENT: Hon. John G. Strand, Chairman
Hon. David A. Svanda, Commissioner
Hon. Robert B. Nelson, Commissioner
OPINION AND ORDER
On October 27, 2000, Edison Sault Electric Company (Edison Sault) filed an
application requesting ex parte approval of the classification of its electric
transmission and distribution facilities.
The application states that Edison Sault, a Michigan corporation with
principal offices located in Sault Ste. Marie, Michigan, is a wholly-owned
subsidiary of Wisconsin Energy Corporation and an affiliate of Wisconsin
Electric Power Company (Wisconsin Electric) that is engaged in the generation,
purchase, transmission, distribution, and sale of electric energy. The
application represents that Edison Sault owns approximately 340 miles of
transmission facilities with ratings from 69 kilovolts (kV) to 138 kV.
According to the application, Edison Sault and Wisconsin Electric have
joined in the formation of the American Transmission Company LLC (ATCLLC).(1)
Further, on August 28, 2000, Edison Sault filed an application with the Federal
Energy Regulatory Commission for
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authorization to transfer jurisdictional transmission assets to the ATCLLC.(2)
Because Wisconsin Electric made a similar filing with the FERC and received
authority to transfer its transmission assets to the ATCLLC and because the
Public Service Commission of Wisconsin (PSCW) classified Wisconsin Electric's
facilities that are designed and operated at a nominal voltage of 50 kV or
higher as transmission facilities, Edison Sault seeks approval from this
Commission to classify and transfer control of its assets on the same basis as
prescribed by the PSCW for Wisconsin Electric.(3) According to Edison Sault, if
this Commission were to classify all of its facilities with voltages of 50 kV or
higher as transmission facilities, then all assets transferred to the ATCLLC by
Edison Sault and Wisconsin Electric would be subject to consistent treatment.
Additionally, Edison Sault indicates that its application constitutes
notice of the transfer of its assets that is required by the guidelines for
affiliate transactions established by the Commission in its May 3, 2000 order in
Case No. U-11916. Edison Sault also maintains that its application includes the
submission of preliminary journal entries in accordance with the requirements of
the Uniform System of Accounts (USOA). Finally, Edison Sault represents that all
utility assets classified as transmission facilities will be conveyed to the
ATCLLC at net book value.
Effective June 5, 2000, Public Act 141 of 2000 (Act 141) became law. Act
141 permits all retail electric customers in Michigan to have the choice of
electric suppliers. By no later than January 1, 2002, the Commission must issue
orders establishing rates, terms, and conditions to allow all retail customers
to choose an alternative electric supplier. In order to facilitate the
implementation of customer choice provided for in Act 141, it is necessary and
appropriate for the Commission to classify utility transmission and distribution
facilities.
However, the Commission is concerned that Edison Sault filed its Section
203 application with the FERC on August 28, 2000, or approximately two months
prior to seeking a determination by this Commission of the Michigan assets that
were to be categorized as transmission assets. In so doing, Edison Sault
presumed a Michigan result in its FERC filing that was different from prior
rulings this Commission had made in cases concerning The Detroit Edison
Company,(4) Consumers Energy Company,(5) and Alpena Power Company.(6)
For regulatory expediency, and without passing upon the merits of the
Wisconsin methodology, the Commission finds that it should approve Edison
Sault's application. However, in the future, Edison Sault must be cognizant of
and operate consistent with both Michigan and Wisconsin laws where the two
jurisdictions require coordinated approaches. Future disregard of this
Commission's authority will be handled in a manner consistent with Michigan law.
Specifically, the Commission concludes the proposal to classify Edison Sault's
facilities with voltages of 50 kV or higher as transmission is reasonable and in
the public interest, and should be approved. Further, although the Commission
has reviewed Edison Sault's preliminary journal entries, because those entries
may change, the Commission finds that it should reserve judgment until final
entries are filed. Approval of Edison Sault's application will not increase its
current
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rates and charges. Further, approval of this application will not result in an
increase in the cost of service to its customers. Therefore, pursuant to MCL
460.6a; MSA 22.13(6a), the Commission may approve the application without
providing notice or opportunity for hearing. The Commission FINDS that: a.
Jurisdiction is pursuant to 1909 PA 106, as amended, MCL 460.551 et seq.; MSA
22.151 et seq.; 1919 PA 419, as amended, MCL 460.51 et seq.; MSA 22.1 et seq.;
1939 PA 3, as amended, MCL 460.1 et seq.; MSA 22.13(1) et seq.; 1969 PA 306, as
amended, MCL 24.201 et seq.; MSA 3.560(101) et seq.; and the Commission's Rules
of Practice and Procedure, as amended, 1992 AACS, R 460.17101 et seq.
b. Edison Sault's proposal to classify its facilities with voltages of 50
kV or higher as transmission is reasonable and in the public interest, and
should be approved. c. Judgment on Edison Sault's accounting journal entries is
reserved pending the filing of final journal entries. d. Ex parte approval of
the application is appropriate. THEREFORE, IT IS ORDERED that: A. Edison Sault
Electric Company's application for classification of its transmission and
distribution facilities is approved. B. Edison Sault Electric Company shall,
within 90 days, file an inventory classifying its facilities with voltages of 50
kilovolts or higher as transmission facilities. C. Edison Sault Electric Company
shall, within six months after the asset transfer to the American Transmission
Company LLC, file with the Commission for approval its final journal entries.
The Commission reserves jurisdiction and may issue further orders as necessary.
Any party desiring to appeal this order must do so in the appropriate court
within 30 days after issuance and notice of this order, pursuant to MCL 462.26;
MSA 22.45. MICHIGAN PUBLIC SERVICE COMMISSION
/s/
John G. Strand Chairman ( S E A L ) /s/ David A. Svanda Commissioner /s/ Robert
B. Nelson Commissioner By its action of December 20, 2000. /s/ Dorothy Wideman
Its Executive Secretary C. Edison Sault Electric Company shall, within six
months after the asset transfer to the American Transmission Company LLC, file
with the Commission for approval its final journal entries. The Commission
reserves jurisdiction and may issue further orders as necessary. Any party
desiring to appeal this order must do so in the appropriate court within 30 days
after issuance and notice of this order, pursuant to MCL 462.26; MSA 22.45.
MICHIGAN PUBLIC SERVICE COMMISSION
Chairman Commissioner Commissioner By its action of December 20, 2000. Its
Executive Secretary In the matter of the application of) EDISON SAULT ELECTRIC
COMPANY ) for the classification of its transmission and)
Case No. U -12690 distribution facilities and related transactions.) Suggested
Minute: "Adopt and issue order dated December 20, 2000 approving the application
filed by Edison Sault Electric Company for classification of its transmission
and distribution facilities, as set forth in the order."
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1. Wisconsin legislation, 1997 Act 204, requires Wisconsin public utilities
to transfer control of their transmission facilities to either an
independent system operator or an independent transmission owner.
2. See, FERC Docket No. EC-131-000, which involves Edison Sault's
application pursuant to Section 203 of the Federal Power Act to transfer
transmission assets to ATCLLC.
3. See, the PSCW's July 13, 2000 order in Docket No. 05-E1-119.
4. January 14, 1998 order in Case No. U-11337.
5. January 14, 1998 order in Case No. U-11283.
6. March 8, 1999 order in Case No. U-11856.
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