Collaborative Report. Gas Choice Price Comparison Website

Collaborative Report to the Michigan Public Service Commission Gas Choice Price Comparison Website Case No. U-17580 Prepared by Michigan Public Service Commission Staff Financial Analysis & Audit Division July 22, 2014

Table of Contents Acknowledgements... 3 Executive Summary... 4 History and Background... 4 Benefits of a Gas Choice Comparison Website... 5 Consensus Items 1. Administration of the Website... 6 2. Participation by AGSs... 7 3. Data Reporting Requirements... 7 4. Scope of Staff Review... 8 5. Enforcement of the Website... 9 6. Website Design... 10 Non-Consensus Items 1. Compare MI Gas Website Reference and Promotion... 12 2. Historical Rate Information... 15 Attachment A Terms and Conditions of the Compare MI Gas Website... 21 Attachment B AGS Licensing Application (Retail Access Participation Agreement)... 24 Attachment C Proposed Tariff Language... 31 Attachment D Glossary of Terms, Frequently Asked Questions and Questions to Ask an Alternative Gas Supplier... 35 Attachment E Disclaimers... 43 Attachment F Utility Proposed Methodology to Calculate AGS Historical Rate Data... 45 Attachment G Ohio Example of Utility Historical Rate Data... 48 2

Acknowledgements The Michigan Public Service Commission (MPSC or Commission) Staff (Staff) would like to thank the participants of the Gas Choice Comparison Website Collaborative (Collaborative). This report is the product of several extensive discussions which resulted in the recommendations contained in this report. The Collaborative consisted of representatives from twelve alternative gas suppliers (AGS), four regulated gas utilities, two customer choice groups, and Staff. These entities are referred to collectively as the Participants throughout this report. The AGSs included representatives from Constellation Energy Gas Choice, Inc. (Constellation), Grand Rapids Energy (GRE), Integrys Energy Services (Integrys), Interstate Gas Supply, Inc. (IGS), Just Energy Michigan Corp. (Just Energy), Lakeshore Energy Services (Lakeshore), Michigan Gas & Electric (MIG&E), Michigan Natural Gas (MNG), My Choice Energy, LLC (My Choice), Stand Energy Corporation (Stand Energy), United Energy Trading d/b/a Kratos Gas & Power (Kratos) and Volunteer Energy Services (Volunteer). The gas utilities included Consumers Energy (CE), DTE Gas Company (DTE), Michigan Gas Utilities (MGU), and SEMCO Energy Company (SEMCO). American Coalition of Competitive Energy Suppliers (ACCES) and Reliable Choice Energy participated on behalf of the choice program and in support of customer education. 3

Executive Summary The Commission opened Case No. U-17580 on its own motion to study the benefits of the creation of a price comparison website to benefit customers from the service areas of all regulated utilities. Pursuant to the Commission order, Staff convened a collaborative to discuss the creation of a gas choice price comparison website for use by customers. Participants engaged in meaningful discussion on a wide range of issues related to a central price comparison website including participation requirements, site administration and funding, data reporting requirements, scope of Staff review, and site design and enforcement. Participants were able to reach consensus on all but two items, those being (i) website reference and promotion and (ii) the presence of historical rate information on the website. This report will provide a brief summary of the consensus items and a more detailed discussion of the two non-consensus items. Interested parties may submit comments to the Commission regarding this report on or before August 5, 2014. Comments may be submitted via email or in written format and should reference Case No. U-17580. Comments may be emailed to mpscedockets@michigan.gov or mailed to: Mary Jo Kunkle, Executive Secretary Michigan Public Service Commission PO Box 30221 Lansing, MI 48909 History and Background In Case No. U-17487, DTE filed an application seeking approval for changes to its gas customer choice (GCC) program, including the creation of a utility run gas choice price comparison website. On March 18, 2014, the Commission closed that docket with respect to a DTE Gas-managed website and opened Case No. U-17580 in favor of studying the benefits of the creation of a price comparison website to benefit customers from the service areas of all regulated utilities. Pursuant to the March 18, 2014 order in Case No. U-17580, Staff convened a collaborative to discuss the creation of a gas choice price comparison website for use 4

by customers. The order indicates that the Commission sees value in the creation of such a website that expands to all regulated gas utilities. Staff held collaborative meetings on May 7, May 28, and June 11, 2014 and approximately 45 people participated at each meeting, either in person or by phone. Participants engaged in meaningful discussion on a wide range of issues related to a central price comparison website including participation requirements, site administration and funding, data reporting requirements, scope of Staff review, and site design and enforcement. Participants were able to reach consensus on all but two items, those being (i) website reference and promotion and (ii) the presence of historical rate information on the website. For purposes of this report, CE, DTE, SEMCO and MGU form a unified position on all topics and are referred to collectively as the The Utilities or Utilities throughout the report. For purposes of this report, RESA members (Constellation, IGS, Integrys and Just Energy) and other non-resa AGSs (Kratos, Lakeshore, My Choice and Volunteer) form a unified position on all topics and are referred to collectively as The Suppliers or Suppliers throughout the report. For purposes of this report, the other participating AGSs (those not grouped with the Suppliers) did not express the desire to identify a position for the two nonconsensus items unless specifically mentioned in this report. Benefits of a Gas Choice Comparison Website This collaborative was conducted, in part, to study the perceived benefits of the creation of a price comparison website. Participants agree that consolidating natural gas pricing information into one central location can provide a benefit to customers who choose to compare gas supply options by creating transparency and a means of researching AGS offerings in a simplified and streamlined fashion. The proposed website is designed to be a user-friendly resource available to assist customers in making informed decisions. 5

CONSENSUS ITEMS 1. Administration of the Website A. Name Participants recommend that the Commission name the website Compare MI Gas (referred to throughout as the website or site ) and to use the web address: MI.gov/CompareMIGas as long as the name is available at the time of a final Commission order. This name indicates the purpose of the site and is also short enough to fit onto materials that reference the site. B. Development and Administration Though timing is dependent on multiple aspects including a final Commission Order, participants recommend that the ideal timeframe for the website to be fully operational is prior to the next heating season (preferably by October 2014). (i) (ii) Primary Plan: Participants recommend that Staff will be responsible for the development and administration of the website. The Utilities do not want a role in the development or the administration of the website. Staff is working with the Department of Technology, Management & Budget (DTMB) to create a website that is very similar to the functionality of the Ohio Apples to Apples site. At present, it is estimated that the website will take three months and approximately $30,000 to build. Funding of the website would be through the Public Utility Assessment (PUA). Back-up Plan: In the event that the Staff or DTMB are unable to develop the website, Participants recommend that the Commission subcontract the development of the website to a third party. Staff will still be responsible for administering the website once it has been developed. Funding of the website would be through the PUA, although an additional step may be required for the MPSC to secure the services of a third-party developer. 6

2. Participation by AGSs Participants recommend that any AGS that is actively marketing and/or enrolling customers will be required to submit pricing information for the website. Mandatory participation will ensure that the website contains comprehensive pricing information for customers. 3. Data Reporting Requirements A. Uploading Offers to the Website Participants recommend that an AGS be required to submit its own pricing information to the website. An AGS will do this electronically by logging into the web-based interface with its own username and password. B. Frequency of Posting Offers to the Website Participants recommend that AGSs should be permitted to submit offers as often as technically feasible. Although subject to change in working with DTMB, the working assumption is that offers could be updated as frequently as daily. When an AGS desires to populate or expire pricing information, it would submit the change electronically. The change would then be held in queue until Staff reviews the submission. Once reviewed by Staff, the submission becomes live on the website. C. Types of Offers Required Participants recommend that generally available fixed price offers (fixed offers) and generally available variable price offers (variable offers) should be required to be posted to the website for both residential and small commercial customers. Variable offers include, but are not limited to, month to month contracts, a month to month variable rate plus a green adder, capped variable rates, managed price variable rates, NYMEX + Cap variable rate, etc. In the event an AGS is unclear as to what offer type category an offer falls under, the AGS will communicate with Staff prior to submitting pricing information. 7

D. Number of Offers Participants recommend that each AGS be allowed to post up to five offers per offer type within each utility service territory. This will ensure that the website does not become overly populated or cumbersome for customers. E. Honoring Rates Posted on the Website Participants recommend that AGSs must honor the rates and all terms and conditions of the products posted to the website. Participants also recommend that AGSs be allowed to offer products in the marketplace that reflect lower prices than those posted on the website, but in no instance be allowed to offer products in the marketplace that reflect higher prices than those currently posted on the website. 4. Scope of Staff Review Participants recommend that Staff review the website, both prior to rates being posted to the website and also after. The Utilities do not want a role in the review or monitoring of the website. The Staff review process is described as follows: First, a cursory review of an AGS submitted offer. This cursory review will occur after an AGS submission but prior to the submission becoming live on the website. This cursory review would seek to catch obvious errors (such as $60 gas vs. $6 gas, or 122-month terms vs. 12-month terms) and to ensure that offers are consistent with the tariff. This cursory review will help to ensure that the information posted to the website is accurate and intentional. Second, a dormancy review for AGS activity on the website. This dormancy review will seek to identify any AGS that has not made a single action related to its web-posting function, such as populating or expiring information it posts to the website. If an AGS is considered dormant, Staff will contact the AGS to discuss the situation and to develop an appropriate path of correction. An AGS will not be considered dormant if, within the most recent 90-day period, it has made at least one web-posting function (such as populating or expiring data) for any of its products within any utility service territory. This dormancy review will ensure that the information on 8

the website remains current and valid, and in turn increases the likelihood of customer satisfaction with the website. Third, Staff will monitor all GCC complaints related to the website. Staff will contact the appropriate AGS and/or utility if Staff becomes concerned about a particular trend or situation. This monitoring should allow Staff to get in front of any developing situations and to minimize the chance of any major problems. Fourth, Staff will maintain a record of all posted offers for a minimum of two years. This will ensure that prior information is obtainable for any reason, most notably for possible complaints. 5. Enforcement of the Website Participants recommend the Commission adopt the document titled, Terms and Conditions of the Compare MI Gas Website which is included as Attachment A. These Terms and Conditions currently contain one non-consensus item (website reference and promotion) that will be updated after the final order in this case to reflect the Commission order on the issue. The Terms and Conditions of the Compare MI Gas Website (T&C) outline and describe the purpose, content, rules of participation and enforcement of the website. Key provisions include: A. AGS Licensing Application Requirement Participants recommend the Commission update the AGS Licensing Application as outlined in Attachment B. The proposed Licensing Application requires that new AGSs licensed after this order will be required to participate in the website and describes the procedures and requirements of such participation. All currently licensed AGSs will be required to abide by the T&C and the updated AGS Licensing Application. The updated Licensing Application contains one non-consensus item (website reference and promotion) that will be updated after the final order in this case to reflect the Commission order on the issue. 9

B. Tariff Requirement Participants recommend that the Commission require each utility to update its tariffs to include the additional language reflected in the DTE Tariff Sheets (Attachment C). The additional language reflects the tariff-relevant portions of the outcome of this collaborative and includes updates to Customer Protections, Solicitation Requirements and Supplier Licensing and Code of Conduct. All currently licensed AGSs will be required to abide by the tariffs that reflect the Commission order in this case. CE, DTE, MGU and SEMCO will be required to submit updated tariff sheets within 30 days of the final order in this case. The updated tariff sheets contain one non-consensus item (website reference and promotion) that will be updated after the final order in this case to reflect the Commission order on the issue. C. Consequences for Failure to Abide by the Terms and Conditions Participants recommend that Staff provide an AGS with timely notice and opportunity to cure any alleged violations of the Terms and Conditions, including the failure to report information or for reporting inaccurate information to the website. After timely notice and opportunity to cure, Staff may suspend AGS customer enrollments within the impacted utility service territory. Staff would do so through a letter in the AGS licensing docket. Staff and/or the Commission will be able to remove a Staff-issued suspension. Participants also recommend that the Commission exercise its discretion to impose consequences through Commission order for continuous and/or repeated failures to abide by the Terms and Conditions. These consequences may include, but are not limited to: 6. Website Design i. Suspend AGS customer enrollments within the impacted utility service territory. ii. Revoke AGS eligibility within the impacted utility service territory. A. Interactive Design 10

Participants recommend an interactive site, similar to the Ohio Apples to Apples website, 1 which allows an AGS to upload its own product pricing information and provides customers with sortable information in a designfriendly and function-friendly layout. B. Educational Content Participants recommend that the Commission adopt the following educational content into the website. Noteworthy content includes: i. Detailed specifics of each offer (particularly variable rate offers). At minimum, this will include all variable rate components that go into the calculation of the rate. ii. Customer friendly generic energy choice video clips: http://youtu.be/xhrxuyrjzlm http://youtu.be/mwcju-gtmig iii. Glossary of Terms, Frequently Asked Questions and Questions to ask the AGS (Attachment D) iv. A list of disclaimers that will be incorporated throughout the website (Attachment E) C. Company Logos Participants recommend that the Commission require a graphic logo be included on the website for all utility companies and AGSs. All utilities and AGSs will be required to submit their logo in a format acceptable to Staff. 1 http://www.energychoice.ohio.gov/applestoapplescategory.aspx?category=naturalgas 11

NON-CONSENSUS ITEMS Participants were unable to reach consensus on two items. The two items include website reference and promotion and the use of historical rate information. Each item is discussed below. 1. Compare MI Gas Website Reference and Promotion Background Participants agree that the website should be marketed and promoted in order to benefit and inform customers of its existence. Participants encourage Commission sponsored efforts to that end. However, disagreement exists as to the AGS and utility company roles for marketing and reference of the website. The recommendations and arguments on this issue are outlined below. For context, the arguments below are based on the working version of this topic that was used to frame the discussion which is: The AGS is required to reference the website in its contracts and on any printed advertising flyers, handouts and direct mailers for residential and small commercial customers. (Excludes: radio, TV ads, billboards, telemarketing and door-to-door marketing scripts, confirmation letters, TPV scripts, and AGS s website, social media or texts). The Suppliers The Suppliers recommend that the website be referenced on residential and small commercial contracts and also on all choice-eligible customer utility bills. Pursuant to the working version on this topic, an AGS would be required to include a reference to the website on any print marketing materials distributed as a condition of compliance with the website. Suppliers maintain objection to this approach, emphasizing that such a requirement would be a counterproductive business practice in a competitive market. Suppliers used the example of soda products, stating that such a requirement would be akin to requiring Pepsi to include the Coca-Cola website on its printed material. In early discussions on this topic, Suppliers maintained that the website reference should not be included on any AGS materials. In an effort to achieve 12

compromise and consensus, Suppliers agreed to include the website reference on residential and small commercial contracts. This compromise promotes awareness among these customers and allows them the opportunity to reconsider their enrollment decisions within the rescission period. The Suppliers recommendation also includes that a website reference be placed on all choice-eligible customer utility bills. This would ensure that every single choice-eligible customer would receive a notification that this website exists, fully accomplishing the goal of notification and customer awareness. Suppliers also note that the Utilities did not propose or agree to any measures that would require a utility to promote the website. The Utilities did, however, assert that they have the right to promote the website in various venues if they so choose. Therefore, the Suppliers support the requirement that the website be referenced on residential and small commercial contracts and also on all choice-eligible customer utility bills. This compromise would ensure that every customer receives ample notification of the website and that the website would be promoted by both AGSs and utility companies. Michigan Natural Gas MNG strongly disagrees that information concerning the website should be required to be on the marketing materials of an AGS. These materials are being paid for with AGS marketing dollars and AGSs should not be shouldered with a requirement to share pricing options for competitors. MNG agrees that the site should be included in contracts. Further, if the MPSC desires to establish other references or public awareness campaigns, it should be free to do so on its own. Therefore, MNG supports the requirement that the website be referenced only on residential and small commercial contracts. The Utilities The Utilities recommendation can be summarized as follows: The AGS is required to reference MI.gov/CompareMIGas on its website, contracts, and on any printed advertising flyers, handouts, direct mailers and AGS confirmation letters for residential and small commercial customers. 13

The Utilities believe that requiring AGSs to reference the website on written materials is essential to providing customers with knowledge of the price comparison website and to provide customers with the information necessary to make an informed choice on the gas supply options available to them. For example, customers who are solicited in person or via telephone may not be aware of the price comparison website until and unless it appears on the confirmation letter sent to them. Including reference to the website on confirmation letters and other written materials provided by AGSs to customers will provide customers with the information which is critical to making an informed choice in their AGS. Staff Staff believes there is a measureable difference between marketing/promoting the website for purposes of general customer awareness versus referencing the website on materials at different stages of the enrollment process (pre-sale vs post-sale). As such, Staff s recommendations are summarized as follows: Primary Recommendation (identical to the working version): The AGS is required to reference MI.gov/CompareMIGas in its contracts and on any printed advertising flyers, handouts and direct mailers for residential and small commercial customers. (Excludes: radio, TV ads, billboards, telemarketing and door-to-door marketing scripts, confirmation letters, TPV scripts, and AGSs website, social media or texts) Secondary Recommendation: The AGS is required to reference MI.gov/CompareMIGas in its residential and small commercial contracts. Staff s recommendations would require pre-sale disclosure of the website which will help customers make an informed decision. By way of comparison, the Utilities recommendation includes pre-sale and postsale references (confirmation letters) to the website. Staff fears that post-sale references on enrollment materials would lead to customer confusion and customer complaints. For example, a customer who receives a confirmation letter has already made their purchase decision by signing up to receive service from an AGS. If the confirmation letter then prompts them to review the website (possibly for the first time), and should they decide to switch to another AGS, 14

this may lead to a switching fee charged by the utility. Staff can foresee this adding to the current switching complaints and inquiries. Staff is neutral to any recommendation that would require (a) an AGS to reference the Compare MI Gas website on the AGSs website or (b) a utility company to reference the website on the customer bill or as a bill insert. Staff believes these are reasonable measures of website promotion that would not impact the enrollment process. 2. Historical Rate Information Background Participants engaged in considerable discussion relating to whether or not the website should include any historical rate information, and if so, should such information be posted for each utility and/or each AGS. Disagreement exists as to what historical information should be posted to the website. The recommendations and arguments on this issue are outlined below. The Utilities Current price offerings may not be indicative of what current GCC customers are paying (whereas with the Gas Cost Recovery (GCR), all customers pay the same amount), but historical weighted average pricing provides data comparing amounts paid by GCC customers and GCR customers in the past. Customers find historical price data useful, evidenced by the fact that (a) customers have requested this data from utilities for the GCR, (b) customers have reviewed the NYMEX trends, and (c) some AGSs have provided this data on their own website. Historical information provides a way to validate that information stated about past practices is understood, information sources are knowledgeable, assists in avoiding assumptions, and allows customers to develop questions that help them make an informed choice. There are many instances where it is readily acknowledged that past pricing is not indicative of the future, but the data is provided and found to be useful (eg. stock prices). Therefore, the Utilities support that the posting of historical data be a requirement for AGS participation in the website. The AGS should be responsible for submitting this data to the MPSC Staff. Attachment F provides a step by step process and illustrative example of the methodology proposed by 15

the Utilities to calculate the AGS historical rate data. This data would be submitted by each individual AGS and published on the website. Michigan Natural Gas MNG does not believe a historical chart of aggregated AGS pricing is a fair portrayal of the marketplace due to the wide variety of pricing structures. MNG believes that a historical chart of each utility pricing can be to the advantage of the consumer and encourages that the website include this information. The Suppliers The Suppliers support any of the three Staff recommendations on this issue. The Suppliers do not believe that historical AGS rate information should be required or posted on the website. For a number of reasons, there is not a single historical AGS price for each month that is comparable to the single monthly GCR rate. These reasons include: i. AGSs consider average rates to be confidential business information inappropriate for publication on a public website on an AGS by AGS basis. ii. AGSs may make different offers at any point in time. For example, an AGS may offer a 12 month fixed price, a 24 month fixed price, a 36 month fixed price and a variable price product, each with a different price, simultaneously. This results in four separate prices that could then be used as a comparison to the utility GCR. iii. The impact of time on fixed price offers. In the example below, Customer A starts in January with an AGS on a 12 month fixed price of $0.60. In February, Customer B starts with that same AGS but the offer price for a 12 month fixed contract is now $0.59. The market drops and in May Customer C starts with the AGS getting a 12 month fixed price of $0.49. However, by fall market dynamics have changed with prices increasing. The 12 month fixed price offer from the AGS is now at $0.79. What is the correct historical price for the AGS to post for October of this year? All four offers are pertinent. The average price of $0.6175 or a weighted average price in not representative because none of the customers actually receive it and when weighted the price is inherently biased toward larger users. Assuming larger loads receive more favorable pricing than smaller loads, the historical prices for the AGSs could be prices that the smallest residential customer would never be eligible for. 16

12 month fixed price Customer A: Jan start Customer B: Feb start Customer C: May start Customer D: Oct start Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Next year $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.60 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 $0.59 Plus one month $0.49 $0.49 $0.49 $0.49 $0.49 $0.49 $0.49 $0.49 Plus 4 months $0.79 $0.79 $0.79 Plus 9 months iv. The impact on existing customers. A website is publically available to both customers who are shopping and to existing customers. If in the above example, all four prices are posted for October, it will be challenging and time consuming to explain to Customers A, B and D why they do not receive the preferable price of $0.49. Using an averaging methodology may reduce the inquiries to only those customers with a price higher than the average, but the conversations will be every bit as challenging. If Customer D was to reference the website in month one of its contract, imagine the dismay at a posted historical price by its new AGS for October that is $0.17 lower than the agreement it recently signed with this same AGS. v. It ignores the impact of non-price product attributes. For example, an AGS may offer a slightly more expensive product that includes only green energy; however the environmental benefits are ignored when comparing a utility GCR with the AGS average price. An AGS may include an incentive with an offer, such as a gift card, however the contemplated price comparison calculation does not include the monetary value of that incentive. As mentioned, fixed price offers can have different term durations, such as 12, 24 or 36 months, with different prices; unless historical prices are identified with their term and product attributes, those benefits are lost in the analysis and the result is an erroneous and incomplete comparison. The Suppliers do not support the Utilities proposal/methodology for calculation of historical rate information (Attachment F) for the following reasons: i. It publishes competitively sensitive price information that AGSs consider confidential. Further, aggregating AGS rates creates no actionable 17

information to the customer and will lead to customer confusion. It aggregates AGS prices for simplicity, which results in misleading data regarding the AGSs actual prices. ii. Historic price reporting of average unit prices is not valuable or actionable for customers with respect to fixed price offers absent the context of the month in which the fixed price contract began. Simply reporting the average price/unit rate for all AGSs fixed price customers is not an indicator of the relative competitiveness of a given AGSs now current fixed price offers. Consider a situation in which AGS A conducts a marketing campaign in February of a given year and signs up a substantial number of customers at $0.80/Ccf whereas AGS B conducts its marketing campaign in June and acquires an equally substantial number of customers at $0.60/Ccf. Further, assume that both AGS prices were $0.80/Ccf in February and $0.60/Ccf in June. At the time of the September reporting, an average approach would result in AGS B appearing to be significantly less expensive/consumer friendly in its pricing than AGS A, when in fact they are virtually identical in their pricing. Moreover, when the subsequent year s February reporting is provided, suddenly, AGS A will appear to have substantially reduced its fixed price rates without in fact taking any action different from AGS B; all that would have happened was that the customers acquired by AGS A the previous winter would have rolled off of its fixed price book of business. Furthermore, what is the value to a customer considering options in September of historic information that indicates what price a prior customer could have paid seven months ago (i.e., $0.80/Ccf) or even three months prior (i.e., $0.60/Ccf). An average rate for fixed prices, even if it is weighted, fails to provide customers with actionable, valuable information about their choices due to the seasonality/volatility of prices and the timing of particular AGS marketing campaigns. iii. It creates confusion for existing customers who do not receive the historical posted prices as described above. iv. It ignores the impact of non-price product attributes such as contract terms, etc. as described above. v. The potential lack of consistency across AGSs when calculating their prices. vi. During late summer and early fall, a six month calculation will exclude most of the heating season impacts which could result in a misleading outcome, specifically for variable rate products. Extending the calculation 18

to greater than six months will increase the complexity of an already challenging process that has other serious flaws. Therefore, the Suppliers do not support the Utilities proposal which would require the posting of AGS historical prices due to the complexity of the process, the misleading result if the data is aggregated, and the burden of the task in relation to any proven benefit to customers (i.e. past performance does not predict future results). Staff The Commission has several options to consider on this topic including: (a) No historical information (b) GCR information only (c) GCR and AGS information per Utilities proposal (d) GCR and AGS information per Staff secondary recommendation Primary Recommendation: Staff recommends posting 12-month historical GCR information for each individual utility (in a fashion similar to Attachment G). After launching the new Apples to Apples site without historical information, the PUCO received feedback asking for this information. Subsequent to those requests, the PUCO incorporated the historical information into their website. Secondary Recommendations: (a) Primary Recommendation plus snapshots of the Compare MI Gas website offers would be used to populate historical information going forward. This would involve Staff saving and posting a snapshot of the actual Compare MI Gas website at least quarterly, dating back 24-months. This would allow customers to have access to historical information, and to do so in the same format as they are reviewing current offers. (b) No historical data for AGSs or any utility company With respect to the Utilities proposal, Staff shares the concerns of the Suppliers. In addition, Staff is concerned about the administrative impact of the Utilities proposal on Staff. If the Commission believes historical information could be useful to customers, then it seems reasonable for Staff to assume that the Commission would want to ensure that information is accurate through some type of Staff review. The Utilities proposal can certainly be done, but it will be a 19

very time consuming endeavor due to the volume of information and the number of AGSs. In the alternative, if the Commission desires some sort of historical information for the AGSs, then Staff recommends the Commission consider its Secondary Recommendation. Staff s Secondary Recommendation is similar to the Ohio process and mitigates the large administrative impact of the Utilities proposal, while at the same time provides customers with historical information in a manner consistent with the very website customers are currently reviewing. The Staff s Secondary Recommendation is much more administratively feasible for Staff to ensure website integrity and accuracy. 20

Attachment A (Terms and Conditions of the Compare MI Gas Website containing one non-consensus item highlighted in yellow) 21

Attachment A Page 1 of 2 U-17580 Terms and Conditions of the Compare MI Gas Website Website Purpose As part of Michigan s retail energy market customer education efforts, the Michigan Public Service Commission (MPSC or Commission) operates the MI.gov/CompareMIGas website, which provides customers an opportunity to learn about the Gas Customer Choice (GCC) Program and to help customers make informed choices for gas service and providers. The MI.gov/CompareMIGas comparison charts are part of the website and are intended to provide residential and small commercial customers an unbiased listing of available offers. Michigan alternative gas supplier (AGS or supplier) licensing requires AGS website participation if active marketing and/or enrollment is available for residential and small commercial customers. Website Content The MPSC will determine the design, data elements, layout and format of MI.gov/CompareMIGas including all aspects of the comparison charts and reserves the right to modify any elements of the website and the comparison charts without prior notice. The MPSC Staff will keep a record of all posted offers for a minimum of two years. If any modification requires new or changed data from the AGS, the MPSC Staff will provide sufficient notice and time to AGS to provide the required data. Honoring Offers As a condition of posting offers on MI.gov/CompareMIGas an AGS is required to honor the prices and all terms and conditions of products posted. The AGS should keep posted offers current. As offer details change the AGS should expire offers that are no longer available to customers and submit new offers. The MPSC Staff reserves the right to remove offer(s) from the website if the AGS fails to honor the posted prices. Terms and Conditions All offers posted on MI.gov/CompareMIGas are subject to the following terms and conditions and are requirements of the AGS licensing application and each GCC Program utility tariff, Section F: 1. All MPSC licensed AGSs will be issued a user-id and password, which permits each AGS to submit information to the website through a web-based interface. 2. Accurate and timely postings are the responsibility of the AGS, and the MPSC shall not be liable for inaccurate or untimely postings. The AGS will submit offers for posting as frequently as they become available. The AGS will be required to honor all uploaded pricing for residential and small commercial customers on the website. The MPSC reserves the right to impose consequences for non-compliance. 3. Any AGS licensed by the MPSC and marketing to residential and small commercial customers must post to the website their generally available pricing offers for each type of offer available (i.e. fixed or variable) within each utility territory in which the AGS is marketing. The AGS submitted offers 22

Attachment A Page 2 of 2 U-17580 will be limited to five per offer type per utility. The AGS will not offer a higher rate in the marketplace than what is posted on the website. 4. The AGS is required to populate all relevant informational fields for each offer on the website. In order to ensure that offers are comparable, the MPSC website offers different identifying designations (i.e. fixed or variable, with details provided on promotion or custom) on the website. The AGS is required to follow these designations when entering information on all offer types (i.e. fixed or variable, with details provided for green, index, capped). The MPSC Staff reserves the right to reject submitted offers that do not comply with the identifying designations. The AGS may revise any rejected offer and resubmit for inclusion on the site. Non-Consensus Item: 5. The AGS is required to reference MI.gov/CompareMIGas in its contracts and on any printed advertising flyers, handouts, and direct mailers for residential and small commercial customers. (Excludes: radio, TV ads, billboards, telemarketing and door-to-door marketing scripts, confirmation letters, TPV scripts, and AGS s website, social media, or texts.) 6. To ensure a level of security, MPSC Staff will act as a moderator of each AGS submission for posting. MPSC Staff will perform a cursory review of each submission for obvious errors before it becomes live on the website. MPSC Staff will alert AGS to any obvious errors with a timely notice. 7. Each AGS will be required to provide its company logo in an acceptable format at the request of the MPSC Staff for inclusion on the website. Enforcement The MPSC Staff will provide an AGS with timely notice and opportunity to cure any alleged violation of these Terms & Conditions, including the failure to report information or for reporting inaccurate information to the website. After timely notice and opportunity to cure, Staff may suspend AGS customer enrollments within the impacted utility service territory by filing a letter in the AGS licensing docket. Staff and/or the Commission will be able to remove a Staff-issued suspension. The Commission may impose consequences for continuous and/or repeated failures to abide by these Terms & Conditions. These consequences may include, but are not limited to: 1. Suspend AGS customer enrollments (per Commission order or Staff) within the impacted utility service territory. 2. Revoke AGS eligibility (per Commission order) within the impacted utility service territory. 23

Attachment B (AGS Licensing Application containing new language highlighted in yellow and one non-consensus item highlighted in gray) 24

ALTERNATIVE GAS SUPPLIER APPLICATION FOR THE MICHIGAN PUBLIC SERVICE COMMISSION RETAIL ACCESS PARTICIPATION AGREEMENT Attachment B Page 1 of 6 U-17580 Public Act 634 of 2002 (Act 634), MCL 460.9 et seq., which became effective on December 23, 2002, requires an Alternative Gas Supplier (AGS) selling natural gas at unregulated retail rates in Michigan to obtain a license from the Michigan Public Service Commission (Commission). Transportation gas customers are outside the retail choice program. http://www.legislature.mi.gov/documents/2001-2002/publicact/pdf/2002-pa-0634.pdf Section 9b of Public Act 634 states: (1) An alternative gas supplier shall not do business in this state without first receiving a license under this act. (2) An alternative gas supplier shall maintain an office within this state. (3) The Commission shall assure that an alternative gas supplier doing business in this state has the necessary financial, managerial, and technical capabilities and require the supplier to maintain records that the commission considers necessary. (4) The Commission shall require an alternative gas supplier to collect and remit to state and local units of government all applicable users, sales, and use taxes if the natural gas utility is not doing so on behalf of the supplier. A license can be obtained by satisfactory completion of this application form referred to as the Retail Access Participation Agreement. Information must be supplied prior to processing a license request. All terms and conditions must be adhered to by applicant as a condition of maintaining a license. The applicant s signature on this form attests to the accuracy of the information submitted and commits applicant to adhere to the attached terms and conditions as set forth in the Commission s orders in Case Nos. U-11915, U-13694 and U-17580. Failure to provide accurate information on this form, to furnish any required supporting information including required affidavits or to comply with the attached terms and conditions can result in denial or revocation of a license. After an AGS submits its application: 1. The Commission Staff (Staff) reviews the application and the AGS s Terms and Conditions Agreement submission and consults with any needed experts and the applicant before making a recommendation to the Commission for approval or non-approval of the license. 2. The Staff s review process time will vary depending on initial application contents, additional information requirements and necessary meetings with the applicant to validate proprietary documentation. 3. The Commission will issue an ex parte order approving the issuance of a license if it is satisfied that the application meets the licensing criteria. 25

PART I FITNESS Attachment B Page 2 of 6 U-17580 1. Name, Michigan office address, phone and fax numbers, e-mail address and company website: 6. Specify type of provider (utility, marketer, utility affiliate): 2. Name of contact person, phone number and e-mail address for this application process: 7. Business affiliation (whether utility or other): 3. If principal place of business is outside Michigan, provide name, address, telephone number, and e-mail: 8. FERC authorization type(s) and number(s) if applicable: 4. Name, telephone number and e-mail of 24-hour contact person for customers: 9. Broker s name, address, telephone number, and e-mail (if applicable list all): 5. Type of legal entity (Corporate, Limited Liability Company, Partnership, etc.): 10. Please list past or future planned name changes (if applicable): a) Date and State legal entity was organized: b) Purpose for which the legal entity was organized: c) Please submit your certificate of Authority to Transact Business in MI (if Foreign Corp, LLC, LPC). 11. State specifically whether the applicant, an affiliate or subsidiary of the applicant, or a predecessor in interest of the applicant, or an owner, shareholder, principal, officer, executive or director associated with the applicant ever: Misled a potential customer and thereby induced that potential customer to sign a contract; Defaulted on a contract; Did not abide by the terms of the contract; Exited the market due to the imposition of any energy related penalties or finings; Committed any violations of law or business ethics in connection with the provision of energy or energy-related products and services anywhere in the United States that resulted in a criminal or civil conviction or agreement to pay a penalty including any settlement imposed by a court or administrative agency? If the answer is yes to any of the above, please explain in detail. Subsequent violations must be disclosed within 30 days to the Michigan Public Service Commission. 26

Attachment B Page 3 of 6 U-17580 12. Please submit a separate legal affidavit, signed by a corporate officer with proper authority, which shall attest to the competence of the company s employees to market natural gas as an AGS. PART II COMPLIANCE COMMITMENT A supplier must demonstrate that it has the necessary technical and managerial capabilities to ensure adequate service to customers in Michigan. Please provide a complete summary of information covering the applicant s: 1. Corporate/Company history with Biographies of Key Personnel (this may include experience as a supplier of retail energy, including natural gas or electricity); 2. All service quality and reliability issues: The total number of customer complaints; Any and all violations or failures to perform on customer contracts, obligations to sell, serve or otherwise provide gas to customers by the applicant or any predecessor or affiliate entity; 3. Audited financial statements of the applicant for its two most recent fiscal years or other documentation, by affidavit, providing detailed factual data pertaining to applicant s financial standing. Please submit financials under separate cover if considered confidential; 4. Please provide the means for the required $100,000 bond or letter of credit to ensure adequate service to customers in Michigan. Draft language will be provided at a later date; 5. Overview of business plan including risk management strategy or policy; 6. Outline of staffing and procedures for responding to customer inquiries and customer complaints. PART III - COMPLIANCE COMMITMENT By signing this application and providing the affidavit letter required in item 12 of this application, the applicant and its representatives (1) certify that the information provided herein is accurate and complete and (2) agree to abide by the provisions of this agreement including the Terms and Conditions for a Michigan alternative natural gas supplier. Signature: Name and Title: Date: Date: 27

APPLICATION, SUBMISSION, AND LICENSE PROCESS: Attachment B Page 4 of 6 U-17580 1. The application may be downloaded in PDF or Word format. Responses to Part I may be attached or the Part I items may be reformatted by expanding the application and inserting responses. 2. The compliance commitment must be signed and dated as indicated. 3. The Staff will contact you via email or phone to acknowledge receipt of application. The Staff also will notify you regarding any clarifications or needed additional materials. Once the Staff determines that the initial application materials are complete, the Staff will meet with principals of applicant to cover and discuss Application Part II information. 4. The financial information that is regarded as confidential will be archived at the Commission. 5. Upon completion of the application process, the Staff will make a recommendation to the Commission regarding the license. Granting of the license is by Commission order. Terms and Conditions 1. Supplier contact information. An AGS shall notify the Staff of any change in the AGS s name, corporate structure, Michigan address, telephone number, contact person or agent. 2. Michigan office. An AGS shall maintain a Michigan office. An AGS representative, toll free telephone number, e-mail address, and website must be made available at all times to enable customers to contact or make inquiry with the AGS. 3. FERC authorization. An AGS shall obtain any authorizations required by the FERC, including any authorization required by the FERC to become a natural gas retail marketer. An AGS shall notify the Staff within 30 days of any FERC determination regarding the AGS s provision of natural gas to retail customers. 4. Business practices and ethics disclosure. An AGS shall follow all state and federal laws, as well as Commission policies and practices that may be established. Violations of law or business ethics by an AGS, AGS s agent, affiliate or subsidiary of the applicant, or a predecessor in interest of the applicant, or an owner, shareholder, principal, officer, executive, or director associated with the applicant in connection with provision of energy or energyrelated products or services anywhere in the United States that results in a conviction or acceptance of a penalty for said behavior must be disclosed to the Michigan Public Service Commission within 30 days of any conviction or penalty determined or imposed by a court or an administrative agency. 5. Product/Service disclosures. An AGS shall conform to all customer disclosure requirements set by the Commission under authority of Act 634. 6. Product/Service marketing and contract practices. An AGS shall ensure fair and truthful representation of all products or services provided under the gas customer choice program in Michigan. 28

Attachment B Page 5 of 6 U-17580 7. Customer enrollment and services. Enrollment of customers in the Michigan retail access program shall strictly follow the procedures authorized by the Commission. Slamming (unauthorized switching) or cramming (unauthorized adding of additional products or services not requested by the customer) as outlined in subsections (2) and (4) of Act 634 constitute serious offenses in the enrollment process. An AGS shall not include or add products or services without authorization as outlined in Act 634 and shall conform to all state and federal laws and regulations regarding the retail sale of products and services. 8. Termination of service to customer. The delivery of natural gas is the sole province of the natural gas utility offering the gas customer choice program. Termination of service to a gas customer choice customer will be handled by the natural gas utility in conformity with all rules and procedures authorized by the Commission. 9. Utility tariffs and rules of service. AGSs shall comply with utility tariffs and rules of service established and authorized by the Commission or the FERC that are applicable to the AGS or its retail customers. 10. Customer confidentiality. Information obtained from a customer or a potential customer by an AGS or an agent of an AGS is to be held in strict confidence and shall not be disclosed unless disclosure of the information is necessary to service the customer or to verify the potential customer s credit information. In the event that a customer s or a potential customer s confidential information is disclosed to a third party for any purpose, the AGS shall ensure that the party to whom the information is disclosed is informed of the duty to maintain the confidentiality of such information in the future. Any other use of such confidential information is prohibited absent the express approval of the customer or potential customer. Solicitation for such approval shall not be commingled with other offers, contracts, or approvals. 11. Customer data requests. A customer shall have the right to obtain its own billing and natural gas consumption data that is in the possession of the AGS. 12. Associated broker, aggregator, or marketer. An AGS that relies on the services of brokers, aggregators, or marketers shall pledge a best faith effort to hold them in compliance with provisions of this agreement. AGSs shall supply the Staff with the address, telephone number, name of a contact, and business affiliation of any brokers, aggregators, or marketers used by the AGS. 13. State taxes, fees and revenue collection. An AGS shall collect and remit all applicable state taxes, fees, and charges levied on energy suppliers as a class of business providers, including those fees and charges established by the Commission to implement and enforce this program, unless the natural gas utility is doing so on behalf of the AGS. 14. Reporting. AGSs shall provide statistical data regarding their retail sales and wholesale transactions to the Commission and its Staff upon request. The books and records of an AGS shall be made available by the AGS so that the Commission and its Staff may verify the accuracy of the statistical data. 15. Posting Offers on MI.gov/CompareMIGas. AGSs shall post rate offers to the Commission s website and are subject to the following procedures and requirements: 1. All MPSC licensed AGSs will be issued a user-id and password, which permits each AGS to submit such information through a web-based interface. 29

Attachment B Page 6 of 6 U-17580 2. The AGS is responsible for accurate and timely postings. The AGS will submit offers for posting as frequent as they become available. The AGS will be required to honor all uploaded pricing for residential and small commercial customers to the website. The AGS will expire all offers that are no longer available to customers. The AGS submitted offers will be limited to five per offer type per utility. The AGS will not offer a higher rate in the marketplace than what is posted on the website. 3. AGSs who are marketing to residential and small commercial customers must post to the website their generally available pricing offers for each type of offer available (i.e. fixed or variable) within each utility territory the AGS is marketing. 4. The AGS is required to populate all informational fields for each offer on the website. Non-Consensus Item: 5. The AGS is required to reference MI.gov/CompareMIGas in its contracts and on any printed advertising flyers, handouts, and direct mailers for residential and small commercial customers. 6. Staff will act as a moderator of each AGS submission for posting. Staff will perform a cursory review of each submission for obvious errors before it becomes live on the website. 7. Each AGS will be required to provide its company logo in an acceptable format at the request of the MPSC Staff for inclusion on the website. 8. Staff will provide an AGS with timely notice and opportunity to cure any alleged violation of these Terms & Conditions, including the failure to report information or for reporting inaccurate information to the website. After timely notice and opportunity to cure, Staff may suspend AGS customer enrollments within the impacted utility service territory by filing a letter in the AGS licensing docket. Staff and/or the Commission will be able to remove a Staff-issued suspension. The Commission may impose consequences for continuous and/or repeated failures to abide by these Terms & Conditions. These consequences may include, but are not limited to: i. Suspend AGS customer enrollments (per Commission order or Staff) within the impacted utility service territory. ii. Revoke AGS eligibility (per Commission order) within the impacted utility service territory. Failure to comply with any of these Terms and Conditions can result in revocation of an AGS license by the Michigan Public Service Commission. Revised: August 2014 F-01 30

Attachment C (Updated utility tariff sheets including proposed language in bold and italic font with two non-consensus items highlighted in yellow) 31

M.P.S.C. No. 1 Gas DTE Gas Company (Legal Entity Name Change) Original Sheet No. F-10.00 Attachment C Page 1 of 3 U-17580 F2. CUSTOMER PROTECTIONS (Contd.) (Continued from Sheet No. F-8.00) F2.8 The following information must be included in all residential and commercial Supplier s contracts with a customer. A. The Supplier s name. B. The Supplier s address. C. The Supplier s toll-free telephone number. D. Cancellation rights. All residential and small commercial customers have a 30-day unconditional right to cancel the contract without termination fees following the date the customer signs the contract. All large commercial customers have a 14-day unconditional right to cancel the contract without termination fees following the date the customer signs the contract. This class of customer may waive this right of cancellation by affirmatively agreeing to waive this right on the contract. This customer protection waiver should be prominent in the contract language. E. Any customer fees or penalties related to the contract. F. The contract pricing provisions in unit rates the customer is typically billed for. G. The terms regarding contract length. H. If the Supplier does not offer a fixed price, the contract and all related marketing materials must contain a clear explanation of the pricing factors used to determine the price and an example of how the pricing factors would be implemented. I. Provision for a 60-day advance notice to the customer of any price change at the expiration of a fixed price contract. Non-Consensus Item: J. A Supplier must include the Commission s gas rate comparison website reference of MI.gov/CompareMIGas in its contracts and on any printed advertising flyers, handouts, and direct mailers for residential and small commercial customers. 32

M.P.S.C. No. 1 Gas DTE Gas Company (Legal Entity Name Change) Original Sheet No. F-13.00 Attachment C Page 2 of 3 U-17580 F3. SOLICITATION REQUIREMENTS (Contd.) (Continued from Sheet No. F-12.00) F3.1 It is the Supplier s responsibility to have a current valid contract with the customer at all times. The Commission or its Staff may request a reasonable number of records from a Supplier to verify compliance with this customer verification provision and, in addition, may request records for any customer due to a dispute. For each customer, a Supplier must be able to demonstrate that a customer has made a knowing selection of the Supplier by at least one of the following verification records: A. An original signature from the customer or legally authorized person. B. Independent third party verification with an audio recording of the entire verification call. C. An e-mail address if signed up through the Internet. F3.2 Suppliers and agents who are soliciting customers must comply with the following requirements: A. The Supplier and its agents must clearly identify the AGS on whose behalf they are soliciting. B. The Supplier and its agents must not represent themselves as employees or agents of the Company. C. The Supplier and its agents must affirmatively indicate if they are a marketing affiliate of the Company, that the affiliate is a separate entity and that the affiliate is not regulated by the Commission. D. The Supplier and its agents must submit residential and small commercial contract(s), marketing materials and scripts to the Commission Staff for review at least five (5) business days prior to using the materials in the marketplace. E. The Supplier and its agents cannot remove the original of the customer s bill from the residence or small commercial office. F. The Supplier and its agents must comply with truth in advertising in all verbal, written, or electronic statements to the customer. G. A Supplier who is actively marketing and/or enrolling customers in the Company s territory will post to the Commission s gas rate comparison website at MI.gov/CompareMIGas its generally available offers for residential and small commercial customers per the Terms and Conditions of the AGS licensing application. Non-Consensus Item: H. A Supplier must include the Commission s gas rate comparison website reference of MI.gov/CompareMIGas in its contracts and on any printed advertising flyers, handouts, and direct mailers for residential and small commercial customers. 33

M.P.S.C. No. 1 Gas DTE Gas Company (Legal Entity Name Change) Attachment C Page 3 of 3 U-17580 Original Sheet No. F-18.00 (Continued from Sheet No.F-16.00) F4. SUPPLIER LICENSING AND CODE OF CONDUCT (Contd.) H. The Supplier will make a good faith effort to resolve customer disputes. The Supplier will have an internal customer dispute procedure which allows for complete, courteous, fair and timely responses to customer disputes and inquiries. The Supplier will investigate each complaint, report the results to the customer and attempt to resolve the complaint to the customer s satisfaction. If the complaint cannot be resolved, the Supplier will refer the customer to the Commission or its Staff. The Supplier will appoint at least one employee to be a contact person between the Supplier and the Commission or its Staff. The Supplier will provide complete reports of the complaint investigation and resolution to the Commission or its Staff within ten (10) business days for the resolution of customer complaints. The Supplier will cooperate with the Commission or its Staff to resolve disputes, including the provision of informational materials, contracts and verification records. The Supplier will keep a record of all customer disputes. Dispute records will be made available to the Commission, upon request. I. The Supplier will retain pipeline capacity sufficient to meet its customer requirements. J. A Supplier who is actively marketing and/or enrolling customers in the Company s territory will post to the Commission s gas rate comparison website at MI.gov/CompareMIGas its generally available offers for residential and small commercial customers per the Terms and Conditions of the AGS licensing application. F5. PROCEDURES FOR COMPLAINTS BETWEEN SUPPLIERS AND THE COMPANY If the Company receives a verbal complaint from a Supplier related to the Program rules and operational features, the Company will resolve the complaint on an informal basis. If the Company and the complainant are unable to resolve the complaint on an informal basis, the procedures outlined below will be followed: F5.1 Complainant will route all formal complaints in writing to: DTE Gas Company One Energy Plaza Detroit, MI 48226 Attention: Legal Department F5.2 The Company will acknowledge the receipt of the formal written complaint, in writing, within five (5) working days of receipt by the Company. F5.3 The Company will confirm and amend the prepared written statement of the complainant to ensure the complaint includes the name of the complainant, relevant dates and specific claims. F5.4 The Company will prepare a written statement communicating to the complainant the results of the Company s preliminary investigation within 15 working days of the initial receipt of the complaint by the Company with a description of the action taken or proposed to be taken. 34

Attachment D (Proposed Glossary of Terms, Frequently Asked Questions and Questions to Ask an AGS for the website) 35

Attachment D Page 1 of 7 U-17580 Glossary of Terms Aggregation or Aggregators: An aggregator is a person, local government or organization that brings a group of consumers together to buy electricity or natural gas. An aggregator may be able to get lower prices or other benefits for the group members. Alternative Gas Supplier (AGS or Supplier): A person who sells natural gas at unregulated rates to customers located in Michigan, where gas is delivered to customers by a natural gas utility that has a customer choice program. An AGS is required to be licensed by the Michigan Public Service Commission. Balance (Recovery) and Demand (Capacity) Charge: Cost of balancing customer use with actual gas delivered and pipeline capacity. Broker: A person or company that arranges the sale of electricity or natural gas between buyers and sellers but does not take title to any of the gas sold. CCF: A measurement of 100 cubic feet of gas. Commission: Means the Michigan Public Service Commission (MPSC) in the State of Michigan Department of Licensing and Regulatory Affairs. Comparison Charts: The MPSC s natural gas offer comparison charts, the only comparisons in the state for which suppliers are required to provide accurate and up-to-date information about their latest offers. Customer: means an end user of natural gas Customer Charge: Fixed monthly charge covering costs of meter reading, billing, equipment and maintenance expenses, whether or not the service is used. Customer Choice Program: A program approved by the Commission on application by a natural gas utility that allows retail customers to choose an alternative gas supplier. Deregulation: Removal or relaxation of regulations or controls governing business or service operations like utilities. Distribution: The delivery of gas to homes and businesses through the local pipelines by your local utility. This function remains regulated by the MPSC. 36

Attachment D Page 2 of 7 U-17580 Distribution Charge: Costs of delivering gas to a home or business. Energy Optimization Surcharge: Also known as an Energy Efficiency Charge. A Charge directed by the legislature for programs to help customers use energy more efficiently. Federal Energy Regulatory Commission (FERC): An independent federal agency that regulates the interstate transmission of natural gas, oil and electricity. Fixed Rate: a fixed rate that will remain the same for a set fixed term Gas Cost Recovery Charge: Also known as a GCR Charge, Supplier Energy Charge or Gas Commodity. The charge for the actual amount of natural gas a customer uses. The GCR is a variable rate that can change monthly and is approved by the Commission. Utilities make no profit from the sale of the natural gas. The customer and the utility pay the same price. Green Energy: Environmentally friendly fuel resources. Biogas promotes consumption of landfill gas that might otherwise be vented into the atmosphere. Carbon credits may be promoted as green energy to off-set usage and retirement through purchase of carbon credits. Large Commercial Customer: A Non-Residential customer (business name) with aggregate usage of above 500 Mcf per year. Local Distribution Company (LDC): The local natural gas distribution utility that delivers natural gas to your home or business. Local Utility: The Company that delivers your electricity or natural gas to your home or business. Market Price: The price of natural gas in a particular market. Market-Based Rates: Natural gas rates established in an unregulated, competitive market. MCF: A measurement of 1,000 cubic feet of gas. Natural Gas Utility: an investor-owned business engaged in the sale and distribution of natural gas within Michigan whose rates are regulated by the Commission. NYMEX: The New York Mercantile Exchange, a public market where natural gas and other commodities are sold and traded. Reliability: The delivery of uninterrupted natural gas to consumers on demand. 37

Attachment D Page 3 of 7 U-17580 Renewable Energy: Environmentally friendly fuel resources, such as wind, water, biomass, biogas, waste heat or solar. Sometimes referred to as "green" energy (see Green Energy). Reservation Charge: Cost of pipeline capacity. Residential Customer: A purchaser (account holder) of natural gas that is supplied or distributed by a utility for residential purposes. Sales Tax: 4% for residential service (6% for business service) required by Michigan Department of Treasury. Slamming: Switching natural gas service to another supplier without a customer s approval. This practice is illegal and penalties are enforced by the MPSC. Small Commercial Customer: A Non-Residential customer (business name) with aggregate usage of 500 Mcf of natural gas or less per year. Supplier: The company that you can choose to provide the supply portion of your natural gas service (See Alternative Gas Supplier). Supplier of Last Resort: Supplier of Last Resort (SOLR) serves as the "back-up" provider of natural gas service to the customer. Supply Charge: The price of natural gas offered by a supplier. Terms and Conditions: A contract between an alternative gas supplier and a customer that outlines fees, length of service and other important information. Variable Rate: A variable rate can change, by the hour, day, month, etc., according to the terms and conditions of the supplier s contract. (Some examples of variable price contracts may include month to month variable rate w/ no contract term, month to month variable rate w/ + green adder, capped variable rate, managed price variable rate, NYMEX + Cap variable rate etc.) 38

Attachment D Page 4 of 7 U-17580 FAQ s Q 1: What is the Gas Customer Choice program? A 1: The Michigan Gas Customer Choice (GCC) program allows natural gas customers of Consumers Energy, DTE Gas, Michigan Gas Utilities, and SEMCO to shop for natural gas for their home or business from a diverse market of alternative gas suppliers. Customers may choose an alternative gas supplier or do nothing and continue to get their gas from their local gas utility under existing regulated rates. Q 2: What is an Alternative Gas Supplier? A 2: An alternative gas supplier (commonly known as an AGS or supplier) is a licensed third party company who sells natural gas at unregulated rates to customers located in Michigan, where gas is delivered to customers by a natural gas utility that has a customer choice program. An AGS is required to be licensed by the Michigan Public Service Commission. Q 3: Is the gas different? A 3: No. The natural gas that you receive at your home or business meets the same quality standards whether it is purchased from the utility or an alternative gas supplier. Q 4: How can I tell if the company that called me or came to my door is legitimate? A 4: Public Act 634 of 2002 requires all alternative gas suppliers to be licensed by the Michigan Public Service Commission (MPSC). In order to receive a license from the MPSC, the supplier must meet certain necessary financial, managerial, and technical capabilities. To find out if a company has met these guidelines, check out the MPSC s list of licensed alternative gas suppliers. Q 5: Do I have to choose an Alternative Gas Supplier? A 5: No. You can continue to receive your natural gas from your utility company. The choice is yours. Q 6: Why should I compare? A 6: Although customers are not required to compare or shop, customers can consider their options by using this website and the price comparison chart to determine what supplier is right for them. Q 7: Why do customers consider changing gas suppliers? A 7: Customers decide to shop for a wide variety of reasons. Some Suppliers offer fixed rate plans that allow customers to lock in a defined unit price for a defined period of time. Other customers switch to plans that have an environmental aspect to their gas service. Some customers choose to switch in order to take advantage of incentives that an AGS may offer. Q 8: Why has the MPSC provided this website? A 8: The MPSC has provided this site to help educate and inform customers. 39

Attachment D Page 5 of 7 U-17580 Q 9: If I choose an Alternative Gas Supplier, will I save money? A 9: Not necessarily. Unless a supplier offers a guaranteed savings contract, there is no guarantee that you will save money if you switch to an alternative gas supplier. Q 10: What types of products do AGSs offer? A 10: It is important to understand the different types of offers that may be available from an AGS. When natural gas is purchased from a local gas utility, the rate charged changes periodically and is regulated and approved by the MPSC. AGSs may offer a fixed price and/or a variable price. Some offers may include a lower introductory price or other incentives that may appeal to customers. It s important to make sure you understand the product type, price and terms and conditions before agreeing to a contract from an AGS. Fixed Price Plans: Customers will be charged the same amount per each unit consumed for the length of their contract, irrespective of any changes in the natural gas market. Variable Price Plans: Customers will be charged a monthly rate per each unit consumed (as defined in the sales contract) which typically changes each calendar month. Q 11: Are Alternative Gas Suppliers rates regulated and approved by the MPSC? A 11: No. The prices offered by Alternative Gas Suppliers are not regulated or approved by the Michigan Public Service Commission. Q 12: Are the utility rates regulated and approved by the MPSC? A 12: Yes. Natural gas utility rates for the sale of the natural gas commodity are regulated and approved by the Michigan Public Service Commission. Additionally, the regulated utilities are not allowed to make a profit on their sale of the natural gas commodity. Q 13: What s the difference between utility and AGS pricing? A 13: Utility prices are regulated and approved by the MPSC and do not include a profit component. AGS prices are not regulated or approved by the MPSC and are determined by the competitive marketplace. Q 14: How is the regulated and approved gas cost recovery (GCR) rate determined? A 14: For how the GCR rate is determined, please visit Explanation of Charges on Residential Natural Gas Bill Q 15: Who will deliver my gas and bill me? A 15: Your current natural gas utility will continue to deliver the natural gas to your home or business, read your meter, and delivers to you one bill whether you continue to be a full service utility customer or you choose to purchase natural gas from an alternative gas supplier. Q 16: If I switch my natural gas supplier, who do I call during a natural gas disruption? 40

Attachment D Page 6 of 7 U-17580 A 16: In the event of an interruption in service, emergency, or any other gas related issue call your local distribution company. Q 17: Are there switching fees? A 17: Your alternative gas supplier will not charge any switching fees. However, your local utility may charge a $10 switching fee if you change suppliers more than once in any 12-month period. Q 18: What happens if I cancel my contract early? A 18: It is important to understand your alternative gas supplier s early termination fee policy prior to signing a contract. If you choose to end your contract early, a termination fee may apply. Additionally, if you choose to return to the utility you must remain a user of the utility s natural gas commodity for 12 months. Q 19: What happens at the end of my contract? A 19: If you do no nothing at the expiration of your contract, it will continue on a month to month variable rate basis cancellable at any time without penalty. Q 20: If I sign up with a new supplier, will I be treated differently by my local distribution company? A 20: No. Q 21: Why did my rate jump so high during this past winter season? A 21: Due to the extremely cold, record breaking temperatures during the 2013-2014 winter, some customers who were under variable rate contracts with alternative gas suppliers saw significant increases in the price they paid for their natural gas. The cold weather caused an increasing use of natural gas not just for heating purposes, but to create electricity. This caused a strain on the transportation and infrastructure system that delivers electricity and gas. When demand is high and capacity is strained, costs increase. Q 22: I am on a budget plan with my current utility; can I continue to be on the budget plan if I switch to an alternative gas supplier? A 22: Yes. Nothing will change with regards to your budget plan. Q 23: What if my account is in arrears, am I able to switch to an Alternative Gas Supplier? A 23: No. If a customer is in arrears with the utility, they are not eligible to participate in the gas customer choice program until arrearages have been paid in full to the utility. 41

Attachment D Page 7 of 7 U-17580 Questions to Ask the Alternative Gas Supplier (AGS) Are you licensed by the Michigan Public Service Commission? What is the rate per Ccf, Mcf or Therm that I will be charged? Is the rate fixed or will it change from month to month? What is the length of the contract? What happens when my contract expires? Is there a termination fee if I cancel the contract early? If so, how much is the termination fee? How do I cancel? How long does it take to return to the utility once I have cancelled? Will I receive two bills? Who do I contact regarding billing issues? Are current budget plan customers eligible? What if my account is in arrears? 42

Attachment E (Proposed disclaimers that will be incorporated into the website) 43

Attachment E Page 1 of 1 U-17580 Disclaimers These charts are produced to provide a snapshot comparison of current natural gas price options and contract terms. The charts list only the licensed alternative gas suppliers that are actively enrolling new customers. Alternative Gas Suppliers are responsible for the accuracy of their own offers and these offers can change at any time. The prices offered by Alternative Gas Suppliers are not regulated or approved by the Michigan Public Service Commission Natural gas utilities rates for the sale of the natural gas commodity are regulated and approved by the Michigan Public Service Commission Natural gas utilities regulated by the Michigan Public Service Commission are not allowed to make a profit on their sale of the natural gas commodity Small Commercial customers are encouraged to call an AGS for more accurate pricing Contracts may continue after initial term expiration on a month-to-month variable rate basis, cancelable at anytime without penalty 44

Attachment F (The Utilities proposed methodology for calculating AGS historical rate data) 45

Attachment F Page 1 of 2 U-17580 Example of method to calculate and post Supplier historical rates on the GCC Collaborative Web site Posting of historical data should be a requirement for participating in the website as a supplier, and participation through the website should be a requirement to be licensed in the State of Michigan as an Alternative Gas Supplier. Step by Step Process Group Pools: Variable Rate Pools Fixed Rate Pools Billed Amount (Column D) is the Pool Rate (Column B) times the Billed Usage (Column C) Sum the Billed Usage for all of the Variable Rate Pools to determine the total variable pool rate usage (Column C row 4) Sum the Billed Amount for all of the Varialbe Rate Pools to determine the total variable pool rate billed amounts (Column D row 4) Calculate the Variable Pool Weighted Average Rate for Month 1 = Billed Amount (column D row 4) divided by Billed Usage (column C row 4) Sum the Billed Usage for all of the Fixed Rate Pools to determine the total fixed pool rate usage (Column C row 9) Sum the Billed Amount for all of the Fixed Rate Pools to determine the total fixed pool rate billed amounts (Column D row 9) Calculate the Fixed Pool Weighted Average Rate for Month 1 = Billed Amount (column D row 9) divided by Billed Usage (column C row 9) Complete Month 1 Process for the remaining 11 months (A) (B) (C) (D) (E) Month 1 Process Weighted Average Rate for Pool Rate Billed Usage Billed Month 1 Variable Rate Pools per ccf (ccf) Amount Per ccf 1 Pool 01 $ 0.475 200 $ 95.00 2 Pool 03 $ 0.500 300 $ 150.00 3 Pool 04 $ 0.550 400 $ 220.00 4 Total 900 $ 465.00 $ 0.517 This is the variable rate that would be posted on the Web site for month 1 Fixed Rate Pools 5 Pool 02 $ 0.425 250 $ 106.25 6 Pool 05 $ 0.400 350 $ 140.00 7 Pool 06 $ 0.525 0 $ - 8 Pool 07 $ 0.525 550 $ 288.75 9 Total 1150 $ 535.00 $ 0.465 This is the Fixed rate that would be posted on the Web site for month 1 NOTES: As new Rate Pools are added they would be assigned to either the Variable Rate Group or the Fixed Rate Pool Group See Pool 06 above for Rate Pools without billed usage Rates posted for a rolling 12 months The Example below is based on the Utilities making billed volumes available to Suppliers the month after they are billed. (April billed volumes available to Suppliers in May and the April weighted average rates would be posted in June) Large non-residential customer data should be excluded from these calculations by the suppler. Example: June 2014 table Weighted Average Rates per ccf for Supplier A May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Variable Rate $ 0.517 $ 0.537 $ 0.536 $ 0.537 $ 0.685 $ 0.781 $ 0.528 $ 0.537 $ 0.536 $ 0.537 $ 0.685 $ 0.781 Fixed Rate $ 0.465 $ 0.474 $ 0.476 $ 0.475 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 July 2014 Table Weighted Average Rates per ccf for Supplier A Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Variable Rate $ 0.537 $ 0.536 $ 0.537 $ 0.685 $ 0.781 $ 0.528 $ 0.537 $ 0.536 $ 0.537 $ 0.685 $ 0.781 $ 0.750 Fixed Rate $ 0.474 $ 0.476 $ 0.475 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 $ 0.474 46

Attachment F Page 2 of 2 U-17580 SupplierA Weighted Average Variable Rates for October 2013 - March 2014 SupplierA Weighted Average Fixed Rates Rates for October 2013 - March 2014 Supplier Month Pool Pool Rate Pool Consumption Revenue (Rate*Consumption) Monthly Weighted Average (Total PoolRevenue/Total Pool Consumption) Supplier Month Pool Pool Rate Pool Consumption Revenue (Rate*Consumption) SupplierA 10/2013 1 0.539900 102244.00 $ 55,201.5356 SupplierA 10/2013 7 0.4956000 102244.00 $ 50,672.1264 SupplierA 10/2013 2 0.539900 68236.00 $ 36,840.6164 SupplierA 10/2013 8 0.5325000 68236.00 $ 36,335.6700 SupplierA 10/2013 3 0.469000 0.00 $ - Oct-13 SupplierA 10/2013 9 0.5047000 0.00 $ - SupplierA 10/2013 4 0.457800 5719.00 $ 2,618.1582 SupplierA 10/2013 10 0.4659000 5719.00 $ 2,664.4821 SupplierA 10/2013 5 0.439000 500.00 $ 219.5000 SupplierA 10/2013 11 0.5125000 500.00 $ 256.2500 Monthly Weighted Average (Total PoolRevenue/Total Pool Consumption) SupplierA 10/2013 6 0.499000 0.00 $ - $ 0.5370 SupplierA 10/2013 12 0.5022000 0.00 $ - $ 0.5089 SupplierA 11/2013 1 0.539900 247214.00 $ 133,470.8386 SupplierA 11/2013 7 0.4956000 247214.00 $ 122,519.2584 SupplierA 11/2013 2 0.539900 146068.00 $ 78,862.1132 SupplierA 11/2013 8 0.5325000 146068.00 $ 77,781.2100 SupplierA 11/2013 3 0.469000 0.00 $ - Nov-13 SupplierA 11/2013 9 0.5047000 0.00 $ - SupplierA 11/2013 4 0.457800 15953.00 $ 7,303.2834 SupplierA 11/2013 10 0.4659000 15953.00 $ 7,432.5027 SupplierA 11/2013 5 0.449000 1244.00 $ 558.5560 SupplierA 11/2013 11 0.5125000 1244.00 $ 637.5500 SupplierA 11/2013 6 0.510000 0.00 $ - $ 0.5364 SupplierA 11/2013 12 0.5022000 0.00 $ - $ 0.5076 SupplierA 12/2013 1 0.539900 462901.00 $ 249,920.2499 SupplierA 12/2013 7 0.4956000 462901.00 $ 229,413.7356 SupplierA 12/2013 2 0.539900 278541.00 $ 150,384.2859 SupplierA 12/2013 8 0.5325000 278541.00 $ 148,323.0825 SupplierA 12/2013 3 0.469000 0.00 $ - Dec-13 SupplierA 12/2013 9 0.5047000 0.00 $ - SupplierA 12/2013 4 0.457800 25270.00 $ 11,568.6060 SupplierA 12/2013 10 0.4659000 25270.00 $ 11,773.2930 SupplierA 12/2013 5 0.439000 2544.00 $ 1,116.8160 SupplierA 12/2013 11 0.5125000 2544.00 $ 1,303.8000 SupplierA 12/2013 6 0.422000 0.00 $ - $ 0.5369 SupplierA 12/2013 12 0.5022000 0.00 $ - $ 0.5080 SupplierA 01/2014 1 0.699000 646687.00 $ 452,034.2130 SupplierA 01/2014 7 0.4956000 646687.00 $ 320,498.0772 SupplierA 01/2014 2 0.699000 367679.00 $ 257,007.6210 SupplierA 01/2014 8 0.5325000 367679.00 $ 195,789.0675 SupplierA 01/2014 3 0.469000 0.00 $ - Jan-14 SupplierA 01/2014 9 0.5047000 0.00 $ - SupplierA 01/2014 4 0.457800 58358.00 $ 26,716.2924 SupplierA 01/2014 10 0.4659000 58358.00 $ 27,188.9922 SupplierA 01/2014 5 0.487000 3179.00 $ 1,548.1730 SupplierA 01/2014 11 0.5125000 3179.00 $ 1,629.2375 SupplierA 01/2014 6 0.499000 0.00 $ - $ 0.6853 SupplierA 01/2014 12 0.5022000 0.00 $ - $ 0.5066 SupplierA 02/2014 1 0.799000 652027.00 $ 520,969.5730 SupplierA 02/2014 7 0.4956000 652027.00 $ 323,144.5812 SupplierA 02/2014 2 0.799000 406089.00 $ 324,465.1110 SupplierA 02/2014 8 0.5325000 406089.00 $ 216,242.3925 SupplierA 02/2014 3 0.469000 0.00 $ - Feb-14 SupplierA 02/2014 9 0.5047000 0.00 $ - SupplierA 02/2014 4 0.456500 55907.00 $ 25,521.5455 SupplierA 02/2014 10 0.4659000 55907.00 $ 26,047.0713 SupplierA 02/2014 5 0.439000 2944.00 $ 1,292.4160 SupplierA 02/2014 11 0.5125000 2944.00 $ 1,508.8000 SupplierA 02/2014 6 0.499000 0.00 $ - $ 0.7809 SupplierA 02/2014 12 0.5022000 0.00 $ - $ 0.5076 SupplierA 03/2014 1 1.290000 618405.42 $ 797,742.9918 SupplierA 03/2014 7 0.4956000 618405.42 $ 306,481.7262 SupplierA 03/2014 2 1.290000 410992.00 $ 530,179.6800 SupplierA 03/2014 8 0.5325000 410992.00 $ 218,853.2400 SupplierA 03/2014 3 0.469000 0.00 $ - Mar-14 SupplierA 03/2014 9 0.5047000 0.00 $ - SupplierA 03/2014 4 0.456500 52596.00 $ 24,010.0740 SupplierA 03/2014 10 0.4659000 52596.00 $ 24,504.4764 SupplierA 03/2014 5 0.439000 2244.00 $ 985.1160 SupplierA 03/2014 11 0.5125000 2244.00 $ 1,150.0500 SupplierA 03/2014 6 0.539900 0.00 $ - $ 1.2478 SupplierA 03/2014 12 0.5022000 0.00 $ - $ 0.5082 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 *Consumption Info will be supplied by utilities. The rest of the info in Columns B through F can be found easily by the Suppliers. This model assumes Suppliers will be doing their own calculation. Column E*Column F The monthly sum of Column G divided by the monthly sum of column F *Consumption Info will be supplied by utilities. The rest of the info in Columns B through F can be found easily by the Suppliers. This model assumes Suppliers will be doing their own calculation. Column N*Column M The monthly sum of Column O divided by the monthly sum of column N Summary Table - 6 months of historical weighted rates Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Variable Rate $ 0.537 $ 0.536 $ 0.537 $ 0.685 $ 0.781 $ 1.248 Fixed Rate $ 0.509 $ 0.508 $ 0.508 $ 0.507 $ 0.508 $ 0.508 47

Attachment G (Example of the utility historical rate data featured on Ohio s Apples to Apples energy choice website) 48

$0.800 Columbia Gas of Ohio - Historical Natural Gas Rates SCO Gas Rate Attachment G Page 1 of 1 U-17580 $0.700 $0.685 SCO - $ per CCF (Hundred Cubic Feet) $0.600 $0.500 $0.400 $0.612 $0.626 $0.621 $0.624 $0.625 $0.574 $0.564 $0.540 $0.524 $0.496 $0.456 $0.433 $0.372 $0.357 $0.396 $0.454 $0.455 $0.430 $0.416 $0.544 $0.544 $0.523 $0.527 $0.500 $0.488 $0.496 $0.500 $0.476 $0.475 $0.486 $0.479 $0.479 $0.511 $0.570 $0.615 $0.598 $0.300 The rates listed from April 2012 and going forward reflect the Standard Choice Offer (SCO) $0.200 3/30/2011 4/29/2011 5/31/2011 6/29/2011 7/29/2011 8/29/2011 9/28/2011 10/27/2011 11/29/2011 12/30/2011 2/1/2012 3/1/2012 3/29/2012 4/30/2012 5/30/2012 6/28/2012 7/30/2012 8/28/2012 9/27/2012 10/26/2012 11/28/2012 12/31/2012 1/30/2013 2/28/2013 4/1/2013 4/30/2013 5/30/2013 6/28/2013 7/30/2013 8/28/2013 9/27/2013 10/28/2013 11/26/2013 12/31/2013 1/30/2014 Rate Period Effective Date 49 This chart represents a snapshot in time of past performance and does not necessarily reflect future price trends. 2/28/2014 3/31/2014