state of indiana indiana utility regulatory · 07.05.2012 · state of indiana indiana utility ......

STATE OF INDIANA

INDIANA UTILITY REGULATORY

VERIFIED PETITION OF NORTHERN ) INDIANA PUBLIC SERVICE COMPANY )

CAUSE NO. 44 19 8 FOR APPROVAL OF A VOLUNTARY ) GREEN POWER RIDER PILOT PROGRAM. )

SUBMISSION OF DIRECT TESTIMONY AND EXHIBITS

Northern Indiana Public Service Company, by counsel, hereby submits its

Direct Testimony and Exhibits.

Respectfully submitted,

101 W. Ohio Street, Suite 1707 Indianapolis, Indiana 46204 Phone: 317.684.4930 Fax: 317.684.4918 Email: [email protected]

Attorney for Petitioner Northern Indiana Public Service Company

CERTIFICATE OF SERVICE

The undersigned hereby certifies that the foregoing was served by email

transmission upon the following:

A. David Stippler Office of Utility Consumer Counselor 115 W. Washington Street Suite 1500 South Indianapolis, Indiana 46204 dstipp [email protected] [email protected]

Dated this 7th day of May, 2012.

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Petitioner's Exhibit No. TRC Northern Indiana Public Service Company

Page 1

VERIFIED DIRECT TESTIMONY OF TIMOTHY R. CAISTER

1 Q1. Please state your name, business address and title.

2 Al. My name is Timothy R. Caister. My business address is 101 W. Ohio Street, Suite

3 1707, Indianapolis, Indiana 46204. I am Director of Electric Regulatory Policy for

4 Northern Indiana Public Service Company ("NIPSCO" or IICompanyff).

5 Q2. Please briefly describe your educational and business experience.

6 A2. I am a graduate of Alma College in Alma, Michigan, with a Bachelor of Arts

7 degree. I received my Juris Doctor from Chicago-Kent College of Law at the

8 Illinois Institute of Technology in December 2004. I have also taken courses

9 towards a Masters of Business Administration at the Stuart Graduate School of

10 Business at the Illinois Institute of Technology. Upon my graduation from Alma

11 College, I was employed by NiSource Corporate Services Company (IINCSff ) in

12 various positions including Federal Regulatory Policy Specialist and Manager of

13 Regulatory Policy. After graduating from Chicago-Kent, I was employed by

14 NCS as an attorney providing regulatory legal support to NIPSCO's gas and

15 electric businesses, along with Northern Indiana Fuel & Light Company and

16 Kokomo Gas and Fuel Company, in proceedings before the Indiana Utility

17 Regulatory Commission (IICommissionff). In June 2007 I accepted a position as


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1 Associate General Counsel with Ameren Services Company (If Amerenlf) in St.

2 Louis as part of its Federal Regulatory Team. In that position, I handled a variety

3 of legal and regulatory issues including those associated with the Midwest

4 Independent Transmission System Operator, Inc. ("MISOIf), of which Ameren

5 Corp.' s utility subsidiaries are members. Specifically, during my tenure at

6 Ameren I was responsible for advising on matters in front of the Federal Energy

7 Regulatory Commission and associated wholesale power and transmission

8 contracts. I returned to NCS in November 2008 in my current position, and this

9 position was transitioned to NIPSCO in January of 2009.

10 Q3. Have you previously testified before this or any other regulatory commission?

11 A3. Yes. I have previously submitted testimony in requests for approval of new and

12 revised tariffs and riders in Cause Nos. 42348 and 42480. I also previously

13 submitted testimony in Cause No. 43566 regarding the Commission's demand

14 response generic investigation, and in Cause No. 43426-S1 regarding MISO. I

15 also submitted testimony in support of settlement agreements in Cause Nos.

16 38706-FAC80-S1 and 43674. I have submitted testimony regarding demand side

17 management in Cause No. 43912, testimony regarding feed-in tariffs and net

18 metering in Cause No. 43922 and testimony regarding an asset sale in Cause No.

19 43989.


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1 Q4. What is the purpose of your direct testimony in this proceeding?

2 A4. The purpose of my testimony is to (1) provide an explanation of and support for

3 NIPSCO's proposed Green Power Rider ("GPR") pilot program and (2) provide

4 an introduction of the other witness in this proceeding.

5 Q5. What customer option or program is NIPSCO proposing in this proceeding?

6 A5. The GPR pilot program is proposed as an offering to all NIPS CO electric

7 customers in order to allow customers to designate all or some of their electricity

8 usage to be Green Power.

9 Q6. How is Green Power defined within the context of the GPR?

10 A6. Green Power is defined in the proposed GPR tariff sponsored by NIPS CO

11 witness Curt A. Westerhausen, and it includes energy generated from renewable

12 and/or environmentally friendly sources: solar; wind; geothermal; hydropower

13 that is certified by the Low Impact Hydropower Institute; solid, liquid, and

14 gaseous forms of biomass; and co-firing of biomass with non-renewables. These

15 sources meet the Green-e® National Standard for Renewable Electricity Products

16 in all regions of the United States and are similar to the renewable and

17 environmentally friendly sources identified in approved green power tariffs of

18 Duke Energy Indiana, Inc., and Indianapolis Power & Light Company ("IPL").


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1 Q7. Why is NIPSCO proposing the GPR pilot program?

2 A7. NIPSCO is proposing the GPR pilot program to: (1) provide an additional

3 customer-focused option in its tariff that satisfies a customer expectation or

4 desire that does not exist today; (2) support Indiana's statewide goals to promote

5 renewable and homegrown energy; and (3) support NIPSCO's renewable

6 approach and programs as part of its mission to invest in clean, modern, and

7 affordable energy solutions that support Indiana's long-term economic growth.

8 Q8. Please explain how the proposed GPR pilot program would operate.

9 A8. Customers can voluntarily elect to participate in the program by calling NIPSCO

10 or signing up on NIPSCO.com through their secure online account. If a customer

11 elects to enroll in the program, such customer will have the option to choose

12 from three options - i.e., to designate 25%, 50%, or 100% of their total monthly

13 electricity usage to be Green Power. Commercial and Industrial ("C&I")

14 customers may also choose to designate 5% or 10% of their electricity usage to be

15 attributable to a renewable resource. Customers will be enrolled in the program

16 on the next billing cycle and will see a separate "Green Power" line item on their

17 bill. NIPS CO will purchase a sufficient amount of Renewable Energy Certificates

18 ("RECs") necessary to cover all green power designated by its electing

19 customers.

Petitionerl s Exhibit No. TRC Northern Indiana Public Service Company

Page 5

1 Q9. How can NIPSCO guarantee that electing GPR customersl electricity usage

2 will be attributable to the environmentally friendly or Green sources listed

3 above?

4 A9. NIPSCO will purchase certified RECs on behalf of GPR customers. RECs are the

5 environmental attributes that are derived when electricity is generated from

6 renewable and/or environmentally friendly sources as listed above. These RECs

7 will be certified through Green-e®, a recognized national organization that

8 ensures RECs are created from the proper sources and are properly claimed.

9 QI0. Will NIPSCO's GPR pilot program also be Green-e® certified?

10 A10. Yes. NIPSCO is in the process of working with the Center for Resource Solutions

11 to obtain Green-e® certification. The annual fee for Green-e® certification is

12 approximately $9,000 and certification should take no longer than three months.

13 With anticipated enrollment relatively low in the initial years of the program, a

14 fixed annual fee of $9,000 to certify the program itself would increase the GPR

15 costs to customers. Since any significant increase could potentially deter

16 customers to participate, NIPSCO has decided to not seek recovery for the costs

17 to certify the program in the initial stages. As the program matures, NIPS CO

18 may seek in the fuhlre to recover ongoing certification costs incurred at that time

19 through the GPR.


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1 Qll. Does NIPSCO intend to purchase RECs from sources located in any particular

2 region?

3 All. In order for the CPR to be Creen-e® certified, REC purchases will come from

4 sources within the footprint of MISO (if not Indiana). Although this is not a

5 guarantee that the renewable energy will be generated in Indiana, it increases the

6 likelihood that it may be generated in Indiana.

7 By its July 13, 2011 Order in Cause No. 43922, the Commission approved

8 NIPSCO's renewable feed-in-tariff program, which is designed to encourage

9 renewable development in Indiana and provides for the purchase of RECs by

10 NIPSCO from customers' eligible facilities. However, any RECs purchased by

11 NIPSCO pursuant to the feed-in-tariff will be separate from RECs purchased for

12 the purpose of the CPR. In other words, feed-in-tariff RECs will not be used to

13 satisfy NIPSCO's obligations to acquire RECs under the CPR.

14 Q12. If one of the objectives of the GPR is to support Indiana's statewide goals to

15 promote renewable and homegrown energy, why not require the RECs to be

16 generated from sources in Indiana?

17 A12. If all REC purchases are required to come from Indiana, this could place upward

18 pressure on the price of Indiana RECs and ultimately will increase the cost to

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electing customers under this program. Unreasonable REC prices will make

participation in the GPR unattractive to NIPSCO customers. This may be

3 something that NIPSCO considers in the future for the GPR, but at this time

4 NIPSCO believes it is important to move forward as proposed to provide this

5 valuable program and determine how customers value the CPR without this

6 restriction. The decision to not require the RECs to be generated from sources in

7 Indiana will help advance the statewide goals more than if the CPR is not in

8 place. For example, in support of Indiana's statewide goals to support expansion

9 of renewable generation and sources, this proposal helps to advance the

10 marketplace for such sources and, even if the RECs are not always sourced from

11 facilities in Indiana, assists in economic development and other efforts within

12 Indiana to promote manufacturing of green power equipment and its associated

13 jobs.

14 Q13. Is it possible that NIPSCO might purchase some RECs associated with sources

15 in Indiana?

16 A13. Yes. Indiana has a significant portfolio of renewable energy resources, and there

17 are a number of RECs associated with energy generated in Indiana. According to

18 IPL's J'l2009 Green Power Tariff Rider Annual Report" filed at the Commission on

19 October I, 2009, IPL purchased 80% of their RECs from Indiana. Nonetheless,

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IPL's 2010 report states that all purchases came from Iowa and IPL's 2011 report

states that all purchases came from Iowa and North Dakota because the REC

prices in those states were lower. This demonstrates the importance of

4 remaining flexible for the location of the REC purchases.

5 Q14. Will NIPSCO follow a purchasing strategy to acquire RECs to be used for

6 Green Power?

7 A14. Yes. As participation grows, NIPSCO anticipates it will make regular semi-

8 annual REC purchases. However, until that time NIPS CO' s initial REC

9 purchase(s) would occur so as to match the participation and limit transaction

10 costs. The initial quantity purchased would attempt to supply RECs to cover the

11 amount of sales under the program.

12 In terms of pricing, during the initial pilot NIPSCO will acquire RECs at the

13 lowest available cost. As enrollment in the program increases and subject to

14 review by the Commission and interested parties, NIPS CO may shift its

15 purchasing strategy to target RECs from Indiana and/or multiple renewable

16 resources if it does not materially impact the GPR rate to customers. NIPSCO

17 would presumably be able to support these purchases with less impact to the

18 GPR as Green Power sales increase; however, this is something that would need


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1 to be analyzed as participation increases and NIPSCO gathers further

2 information.

3 Q1S. How much of an electing customer's usage will be tied to RECs?

4 A15. Customers will have the option to designate that 25%,50% or 100% of their total

5 monthly usage be attributable to Green Power and NIPS CO will purchase RECs

6 to meet the designated amount. The 25% minimum for residential customers is

7 based on the Green-e® requirement for a certified program. C&I customers may

8 also choose to designate 5% or 10% of their electricity to be from a renewable

9 resource. C&I customers have greater average usage levels than residential

10 customers and a minimum election of 25% may prevent some of these customers

11 from participating in the program.

12 Q16. What is the proposed incremental rate for the usage that an electing customer

13 designates to be Green Power?

14 A16. In the first six months of the program, NIPS CO is proposing a GPR rate of

15 $0.002163 per kilowatt-hour ("kWh"). A customer choosing the 100% option and

16 using 1,000 kWh per month will pay $2.16 in addition to the typical electric bill.

17 A customer choosing the 100% option and using 688 kWh per month (the


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1 average monthly usage from NIPSCO's most recent base rate case test year) will

2 pay $1.49 in addition to the typical electric bill.

3 Q17. How was the proposed CPR rate calculated?

4 A17. First, NIPSCO estimated the amount of kWh it expects customers to designate to

5 be attributable to Green Power during the first year of the GPR pilot program

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(and then divided by two). NIPSCO also estimated the cost of the RECs

(including all brokerage fees and trading commissions) and the incremental cost

of marketing the program using a low-cost marketing approach. As shown in

the table below, the CPR rate was calculated by dividing the Total Costs by the

Estimated CPR Sales in kWh and then adjusting for Utility Receipts Tax. The

costs and revenues will be subject to a "true up" via the CPR in each subsequent

six-month filing via a reconciliation mechanism.

Estimated REC Purchases Marketing Expenses Adjustment from 6-month prior period

Total Costs (Line 1 + Line 2 + Line 3)

Estimated GPR Sales (kWh) Green Power Factor (Unadjusted - Line 4/Line 5)

Green Power Factor (Adjusted for URT)

$3,847

$250 $0

$4,097 1,923,597

$0.002130

$0.002163 per kWh I

14 Q18. How were the Estimated CPR Sales (kWh) determined?


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1 A18. NIPSCO estimated that for the first year of the program, 25 new residential

2 customers and two new C&I customers on average would enroll in the GPR each

3 month. It is difficult to estimate the level of usage each customer would elect so

4 NIPSCO used the average use per customer from IPL's 2010 Green Power Tariff

5 Rider Annual Report. IPL's 2011 Green Power Tariff Rider Annual Report was

6 not used because it includes the participation of a larger customer, and NIPS CO

7 chose to utilize a conservative approach when estimating participation in the

8 GPR program. In future filings, NIPSCO will have a better understanding of

9 average usage per customer in its own territory and the GPR will be adjusted

10 accordingly.

11 Q19. How were the Estimated REC Purchases determined?

12 A19. At the time of this filing, Midwest RECs were trading at roughly $0.85 per

13 megawatt-hour ("MWh") including brokerage fees, but that price assumes a

14 minimum purchase of 50,000 RECs. The price has the potential to increase

15 significantly with smaller purchases. NIPSCO's projected REC purchases for the

16 first year of the program is well under 50,000, so an estimate of $2.00 per REC

17 was used. NIPSCO will need to wait until the time of executing the purchases to

18 determine how much the RECs will cost for a lower quantity.

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Q20.

A20.


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How were the Marketing Expenses determined?

NIPSCO will use a variety of existing marketing approaches to communicate the

existence of the GPR program to customers and provide opportunities to enroll

in the GPR program. Some of these approaches may be the following: (1)

separate webpage on NIPSCO.com, (2) web banner on NIPSCO.com homepage,

(3) customer newsletter article, (4) bill messages, (5) NIPSCO's voice recognition

system, (6) Facebook/Twitter, (7) window decals/lawn signs for participating

individuals and organizations, (8) supporting material for NIPSCO Major

Accounts, and (9) emails from NIPSCO's Economic Development and Public

Affairs groups. All of these approaches are intended to be low-cost methods that

will allow the marketing expense to remain low in the initial stages of the

program. Some of these approaches represent actual costs to NIPS CO, but no

recovery above the low semi-annual amount of $250 is being sought in this filing.

14 Q21. Is NIPSCO requesting to recover the incremental costs of administering this

15 program?

16 A21. No. At this time, NIPSCO does not know the impact this program will have on

17 employee workload so no recovery of incremental administrative costs is

18 included in the GPR calculation. There will be a cost resulting from the changes


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1 in the Customer Information System, but NIPSCO is not seeking recovery of

2 these costs through the GPR.

3 Q22. Is there a market for Green Power purchases through utility programs?

4 A22. Yes. Utility green power programs have gained in popularity throughout the

5 country. The United States Environmental Protection Agency provides a website

6 tool to find programs throughout the country. This tool can be found at

7 http://www.epa.gov/greenpowerlpubs/gplocator.htm.

8 Q23. Does NIPS CO believe that its customers would like to participate in this type

9 of program?

10 A23. Yes. In NIPSCO's electric Demand Side Management Market Potential

11 Assessment and Action Plans analysis, which was completed in May 2010,

12 NIPSCO's customers indicated that they would be willing to pay more on their

13 electric bills to support renewable energy. Specifically, 23% of sampled

14 residential customers responded in this manner. This would indicate that at least

15 80,000 residential customers would consider this type of program. Although

16 NIPS CO does not expect to see this amount of subscription in the near term of

17 the program, this does indicate that this program will have value in many

18 customers'views.


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1 Q24. How can customers elect to participate in the GPR program?

2 A24. Customers will be able to enroll by telephone or Internet.

3 Q25. Do customers have to sign a contract with a minimum term to participate in

4 the GPR?

5 A25. No. Customers have the ability to withdraw from the program at any time

6 through their secure online account or by calling a NIPSCO customer service

7 representative. They will remain on the GPR through the then-current billing

8 cycle in order to allow NIPSCO to properly account for RECs on a month-to-

9 month basis.

10 Q26. "Vill NIPSCO earn any income from the GPR program?

11 A26. No. NIPSCO will purchase the RECs directly from the market and these costs

12 will be passed through to GPR customers on an actual dollar-for-dollar basis.

13 The program will be revenue neutral and will include a reconciliation

14 mechanism.

15 Q27. How often does NIPSCO plan to revise the GPR rate?

16 A27. NIPSCO intends to revise the GPR rate no later than six (6) months after the

17 effective date of the proposed GPR and every six (6) months thereafter. The

18 revised rate will be calculated using the same methodology as described above


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1 and will include reconciliation of any over- or under-recovery of program costs

2 during a prior period. NIPSCO proposes to file a petition requesting approval of

3 the revised GPR rate in an expedited docketed proceeding via a subdocket in this

4 Cause.

5 Q28. Why is NIPSCO proposing to make changes in a subdocket to this Cause

6 rather than in a new proceeding?

7 A28. NIPSCO believes that a subdocket similar to the process employed for other

8 NIPSCO riders, will allow for easier tracking of proceedings that relate to

9 NIPSCO's GPR.

10 Q29. Why is NIPSCO proposmg to file the semi-annual GPR rate updates and

11 reconciliation via a subdocket to this Cause?

12 A29. NIPS CO believes an expedited docketed proceeding is the most appropriate

13 process for NIPSCO to periodically update the GPR rate to reflect changes in

14 costs of RECs and marketing expenses and to reconcile any over- or under-

15 collection of program expenses during the period ending 6 months prior (i.e.,

16 GPR-3 will include a reconciliation of GPR-l). NIPSCO and its customers will

17 benefit from the routine periodic updates because it will make the GPR more

18 responsive to changes in program costs, while giving the Commission, OUCc,


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1 and other interested parties significant time to review the proposed adjustment.

2 Although NIPSCO will utilize the same methodology as approved in this Cause

3 to calculate the revised rate, an expedited docketed proceeding will also allow

4 for the proposal of minor enhancements to the program/ if any/ that are deemed

5 necessary as experience in administering the program is gained. NIPSCO is

6 cognizant of the fact that this GPR program is voluntary and customers may

7 choose to withdraw at any time if it becomes too expensive.

8 Q30. What is the time frame for the proposed pilot program?

9 A30. The proposed pilot period will begin on the date the tariff sheets proposed in this

10 Cause are stamped approved by the Commission and will extend through

11 December 31/ 2014. I( based upon review of the program's results/ customer

12 interest and other factors surrounding the performance of the program during

13 the pilot period/ NIPS CO believes this program should continue/ NIPSCO

14 proposes to submit a request by July 1/ 2014/ seeking an extension or

15 modification of the program.

16 Q31. Please introduce the other witness in this Cause.

17 A31. Curt A. Westerhausen provides testimony regarding the addition of a new GPR

18 tariff and sponsors the proposed new tariff and related revisions.


Page 17

1 Q32. Does this conclude your prefiled direct testimony?

2 A32. Yes.

VERIFICATION

I, Timothy R. Caister, Director, Electric Regulatory Policy for Northern Indiana

Public Service Company, affirm under penalties of perjury that the foregoing

representations are true and correct to the best of my knowledge, information and

belief.

Timothy R. Caister

Date: May 7, 2012

Petitioner's Exhibit No. CAW Northern Indiana Public Service Company

Page 1

VERIFIED DIRECT TESTIMONY OF CURT A. WESTERHAUSEN

1 Q1. Please state your name, business address and title.

2 AI. My name is Curt A. Westerhausen. My business address is 801 East 86th

3 Avenue, Merrillville, Indiana 46410. I am Director of Rates and Contracts in the

4 Rates and Regulatory Finance Department for Northern Indiana Public Service

5 Company ("NIPSCO").

6 Q2. Please briefly summarize your educational and business experience.

7 A2. I received a Bachelor of Science degree in Electrical Engineering from Valparaiso

8 University and a Masters of Business Administration from Indiana University. I

9 am also a Licensed Professional Engineer in the State of Indiana. I began my

10 employment with NIPSCO in 1978 in the Plant Engineering Department. Since

11 joining NIPS CO, I have held various engineering positions in the Plant

12 Engineering, Plant Construction and the Power Engineering Departments. Since

13 2002, I have been a Lead Regulatory Analyst, Manager, and Director in the Rates

14 Department.

15 Q3. What are your responsibilities as Director of Rates and Contracts?

16 A3. The Rates and Contracts group is responsible for rates and contract

17 administration for all of NIPSCO's electric and gas rate rules and contract filings

18 with the Indiana Utility Regulatory Commission ("Commission"). My

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responsibilities also include the interpretation, application and administration of

NlPSCO's rates, rules and regulations, terms and conditions of service and tariffs

filed with the Commission for retail gas and electric service. I am also

4 responsible for recommending tariff revisions, preparing and coordinating

5 filings with regulatory agencies, implementing and complying with state and

6 federal regulatory orders and assisting in the interpretation and implementation

7 of state and federal regulatory requirements regarding utilities.

8 Q4. Have you previously testified before this or any other regulatory commission?

9 A4. Yes. I have submitted testimony numerous times in support of various rate and

10 regulatory filings before this Commission.

11 Q5. What is the purpose of your direct testimony in this proceeding?

12 A5. The purpose of my testimony is to describe NlPSCO's proposed Green Power

13 Rider ("GPRI!) pilot program and sponsor proposed Rider 686 - Green Power

14 Rider, Original Sheet No. 199.3 of NlPSCO's lURC Electric Service Tariff,

15 Original Volume No. 12. I also sponsor necessary revisions to the Table of

16 Contents, Second Revised Sheet No.3 and Appendix A - Applicable Riders,

17 Second Revised Sheet No. 201, of NlPSCO's lURC Electric Service Tariff, Original


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1 Volume No. 12. A copy of the proposed tariff sheets are attached to hereto as

2 Petitioner's Exhibit No. CAW-l

3 Q6. Please describe the provisions of NIPSCO's proposed GPR.

4 A6. NIPSCO is proposing a CPR as a pilot program to be available to all electric

5 customers on a voluntary basis as a rider to their current applicable rate that

6 allows them to designate all or portions of their electricity usage to be

7 attributable to renewable energy resources. The proposed CPR is discussed in

8 greater detail by NIPSCO witness Timothy R. Caister.

9 Q7. How will the GPR be applied to a customer's bill?

10 A7. Participating customers will continue to be billed under their current applicable

11 rate, with a separate line item showing the premium to participate in the CPR.

12 This premium will be calculated by multiplying the CPR rate by the kilowatt

13 hours the customer specifies to be subject to the CPR. Customers have the

14 option to designate 25%, 50% or 100% of their total monthly electricity usage to

15 be from a renewable resource. In addition, Commercial and Industrial ("C&I")

16 customers also have the option to designate that 5% or 10% of their total monthly

17 electricity usage comes from a renewable resource.

18 Q8. Does the proposed GPR require execution of a contract?


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1 A8. No. The customer will enroll by secure Internet or telephone, but no signed

2 contract will be necessary. If a customer notifies NIPS CO that it wants to

3 terminate its participation in the program, termination from the program will

4 occur on the beginning of the next billing cycle.

5 Q9. Which customer classes will be eligible for the GPR?

6 A9. All customer classes (Residential, Commercial and Industrial) taking service

7 under Rate 611, 612, 613, 620, 621, 622, 623, 624, 625, 626, 632, 633, 634, 641, 642, 644,

8 647,650, 655, 660 and Rider 676 are eligible to participate. No limit is being placed

9 on purchases from customers as it does not impact the integrity of the electric

10 distribution system because Renewable Energy Certificates ("RECs") purchasing

11 is purely an administrative function.

12 QI0. Will NIPSCO receive financial benefit from the GPR?

13 A10. No. The GPR program will be revenue neutral. The GPR rate is intended to

14 cover all costs associated with the program including the cost of RECs (which

15 includes all brokerage fees and trading commissions associated with purchasing

16 the RECs), marketing and all applicable taxes. The costs and revenues will be

17 subject to a "true up" in subsequent six-month filings via a reconciliation

Petitioner's Exhibit N o. CAW Northern Indiana Public Service Company

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1 mechanism (the "GPR Filing"). Mr. Caister provides additional details relating

2 to the GPR Filing.

3 Qll. Will the GPR economically benefit the state of Indiana?

4 A11. The proposed GPR may result in greater expansion of electricity generated from

5 wind, solar and biomass from Indiana facilities. Mr. Caister provides additional

6 details relating to the purchase of RECs from sources located in any particular

7 region.

8 Q12. Do the RECs purchased under NIPSCO's current wind power purchase

9 agreements affect the GPR?

10 A12. No. Although NIPSCO has a current REC inventory from wind power purchase

11 agreements, the total cost of generation is currently recoverable through the Fuel

12 Adjustment Clause proceedings. This would continue to be the case. All RECs

13 created from NIPSCO's wind purchases would be completely separate from the

14 GPR program.

15 Q13. Does this conclude your prefiled direct testimony?

16 A13. Yes.

VERIFICATION

If Curt A. Westerhausen, Director of Rates and Contracts in the Rates and

Regulatory Finance Department for Northern Indiana Public Service Company, affirm

tmder penalties of perjury that the foregoing representations are true and correct to the

best of my knowledge, information and belief.

&j)~ Curt A. vVesterhausen

Dated: May 4, 2012

NORTHERL'J INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff Original Volume No. 12 Cancelling All Previously Approved Tariffs

TO WHOM AVAILABLE

RIDER 686 GREEN POWER RIDER

Petitioner's Exhibit No. CAW-1 Page 1 of 7

Original Sheet No. 199.3

No.1 of2 Sheets

This Rider shall be applicable to the Rate Schedules as defined in Appendix A.

CHARACTER OF SERVICE

This Rider shall provide Customers with the option to designate a specific percentage of their energy consumption as associated with Green Power. Customers shall pay a surcharge for energy consumption associated with Green Power.

Green Power includes energy generated from renewable and/or environmentally friendly sources, including: solar; wind; geothermal; hydropower that is certified by the Low Impact Hydropower Institute; solid, liquid, and gaseous forms of biomass; and co-firing of biomass with nonrenewables.

Green Power includes the purchase of Renewable Energy Certificates from the sources described above.

All Customers selecting Green Power will be able to designate 25%, 50% or 100% of their energy consumption to be attributable to Green power. Commercial and Industrial Customers will also have the option of designating 5% or 10% of their energy consumption to be attributable to Green Power. The minimum purchase requirement for Residential Customers shall be 25%.

Customer participation is completely voluntary and Customers can sign up for Green Power at any point in time. Customers may withdraw from the program at any time. However, changes will take effect in the upcoming billing cycle after the request for withdrawal has been received by the Company.

CALCULA nON OF GREEN POWER RIDER RATE

Energy Charges in the Rate Schedules included in this Tariff are subject to charges approved by the Commission to reflect Green Power consumption. Such charges shall be increased or decreased to the nearest 0.001 mill ($.000001) per kilowatt-hour ("kWh") in accordance with the following:

Green Power Rider ("GPR") = [(ES x REC) + M]/ES

Issued Date Effective Date


NORTHERl~ INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff

Original Sheet No. 199.4

Original Volume No. 12 Cancelling All Previously Approved Tariffs

Where:

"GPR"

"ES"

"REC"

"NI"

RIDER 686 GREEN POWER RIDER

No.2 of 2 Sheets

is the rate adjustment for each Rate Schedule representing the premium for Green Power consumption.

is the estimated annual sales of Green Power based on estimate of the number of participants and usage level.

is the estimated cost of purchasing Renewable Energy Certificates.

is the marketing costs of the Green Power program.

GREEN POWER RIDER RATE

The rates defmed in Appendix A are subject to a Green Power Rider rate. The Green Power Rider rate stated in Appendix H is applicable hereto and is issued and effective at the dates shown on Appendix H.

The Green Power Rider rate as computed above shall be further modified to allow the recovery of gross receipts taxes and other similar revenue based tax charges occasioned by the Green Power Rider revenues and later reconciled with actual sales and costs.

See Appendix H for the Green Power Rider charge per kWh for each Rate Schedule.


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NORTHERl'l" INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff Original Volume No. 12 Cancelling All Previously Approved Tariffs

APPENDIXH


Original Sheet No. 208

GREEN POWER RIDER RATE

No.1 of 1 Sheet

The Green Power Rider Rate in Rates 611, 612, 613, 620, 621, 622, 623, 624, 625, 626, 632, 633, 634, 641, 642, 644, 650, 655 and 660, Rate Code 647 and Rider 676, shall be computed in accordance with Rider 686.

Effective for all bills rendered during the through , 2012 billing months, the Green Power Rider Rate shall be a charge of $0.002163 per kilowatt hour.


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Petitioner's Exhibit No. CAW-1 Page 4 of7

NORTHERN INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff

Second Hrs-t-Revised Sheet No.3 Superseding

First Revised Original Sheet No.3 Original Volume No. 12 Cancelling All Previously Approved Tariffs

Rider 678 COG Purchases from Cogeneration and Small Power Production 127, 128, 129, 130 Facilities

Rider 679 IS Interconnection Standards 131,132,133,134, 135,136,137,138, 139,140, 141, 142, 143, 144, 145

Rider 680 NM Net Metering 146,147 Rider 681 DRR-l Demand Response Resource Type 1 (DRR 1) - Energy Only 148,149,150, 151,

152,153, 154, 155, 156, 157, 158, 159, 160,161, 162, 163, 164,165, 166, 167, 168,169, 170, 171

Rider 682 EDRR Emergency Demand Response Resource (EDR) - Energy 172,173,174,175, Only 176,177,178,179,

180,181,182,183, 184,185,186,187, 188,189,190,191, 192,193, 194, 195, 196,197

Rider 683 DSMA Demand Side Management Adjustment Factors 198 Rider 684 DLC Credits for Direct Load Control Progran1 199 Rider 685 PEV Plug-In Electric Vehicle Off-Peak Charging Rider (Pilot 199.1,199.2

Program) Rider 686 GPR Green Power Rider 199.'\.199.4 Appendix A Applicable Riders 200-201 AJ2P~ndixB FAC Fuel Cost Charge 202 AJ2Pendix C RTO Regional Transmission Organization Factor 203 AQpendix D ECRM Environmental Cost Recovery Mechanism Factor 204 Appendix E EERM Environmental Expense Recovery Mechanism Factor 205 AppendixF RA Resource Adeguacy Adjustment Factor 206 AppendL,( G DSMA Demand Side Management Adjustment Mechanism Factor 207 ADuendixH GPR Green Power Rider Rate 708


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NORTHER1~ INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff

Second Revised Sheet No.3 Superseding

First Revised Sheet No.3 Original Volume No. 12 Cancelling All Previously Approved Tariffs

Rider 678 COG

Rider 679 IS

Rider 680 NM Rider 681 DRR-1

Rider 682 EDRR

Rider 683 DSMA Rider 684 DLC Rider 685 PEV

Rider 686 GPR Appendi'\.A Appendix B FAC Appendix C RTO Appendi'\.D ECRM Appendix E EERM Appendix F RA Appendix G DSMA AppendixH GPR

Issued Date Pending, 2012

Purchases from Cogeneration and Small Power Production Facilities Interconnection Standards

Net Meterina Demand Response Resource Type 1 (DRR 1) - Energy Only

Emergency Demand Response Resource (EDR) - Energy Only

Demand Side Management Adjustment Factors Credits for Direct Load Control Program Plug-In Electric Vehicle Off-Peak Charging Rider (Pilot Program) Green Power Rider Applicable Riders Fuel Cost Charge Regional Transmission Organization Factor Environmental Cost Recovery Mechanism Factor Environmental Expense Recovery Mechanism Factor Resource Adequacy Adjustment Factor Demand Side Manaaement Adjustment Mechanism Factor Green Power Rider Rate

127, 128, 129, 130

131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145 146, 147 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170,171 172,173,174,175, 176, 177, 178, 179, 180,181,182,183, 184,185, 186,187, 188,189, 190, 191, 192, 193, 194, 195, 196, 197 198 199 199.1,199.2

199.3, 199.4 200-201 202 203 204 205 206 207 208

Effective Date Pending, 2012

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NORTHERN INDIANA PUBLIC SERVICE COMPAL'!Y IURC Electric Service Tariff Original Volume No. 12 Cancelling All Previously Approved Tariffs


Second fflst-Revised Sheet No. 201 Superseding

First Revised Original Sheet No. 201

Rider 681 DRR 1 Demand Response Resource Type 1 (DRR 1)- 623,624,625,626,632, Ener:gy Only 633,634

Rider 682 EDR-l Emergency Demand Response Resource (EDR) - 623,624,625,626,632, Energy Only 633,634

Rider 683 DSMA Adjustment of Charges for Demand Side 611,612,613,620,621, Management Adjustment Factors 622,623,624,625,626,

632,633,634,641,644, 647, Rider 676

Rider 684 DLC Credits for Direct Load Control Program 611,612,613,620,621, 622,623,624,625,626, 632,633,634,641,644 and 647

Rider 685 PEV Plug-In Electric Vehicle Off-Peak Charging Rider 611,612 (Pilot Pro[!ram)

Rider 686 .QER Green Power pjder 611.612.613.620.621. 622.623.624. 625. 626. 63~.633.634. 641.642. 644. 650. 655 and 660. Rate Code 64 7 and Rider 676


NIPSCO'

NORTHERl~ INDIANA PUBLIC SERVICE COMPANY IURC Electric Service Tariff Original Volume No. 12 Cancelling All Previously Approved Tariffs


Second Revised Sheet No. 201 Superseding

First Revised Sheet No. 201

Rider 681 DRR1 Demand Response Resource Type 1 (DRR 1) - 623,624,625,626,632, Energy Only 633, 634

Rider 682 EDR-1 Emergency Demand Response Resource (EDR) - 623,624,625,626,632, Energy Only 633,634

Rider 683 DSMA Adjustment of Charges for Demand Side 611,612,613,620,621, Management Adjustment Factors 622,623,624,625,626,

632,633,634,641,644, 647, Rider 676

Rider 684 DLC Credits for Direct Load Control Program 611,612, 6l3, 620, 621, 622,623,624,625,626, 632,633,634,641,644 and 647

Rider 685 PEV Plug-In Electric Vehicle Off-Peak Charging Rider 611,612 (Pilot Program)

Rider 686 GPR Green Power Rider 611,612,613,620,621, 622,623,624,625,626, 632,633,634,641,642, 644, 650, 655 and 660, Rate Code 647 and Rider 676


state of indiana indiana utility regulatory · 07.05.2012 · state of indiana indiana utility ......

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