MARKET POWER SERVICE LIST. (As of May 29, 2003)

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3 MARKET POWER SERVICE LIST (As of May 29, 2003) Administrative Law Judge Hon. James N. Rigas, ALJ 6545 Mercantile Way, Suite 14 P.O. Box Lansing, MI Phone: Fax: ( ) Consumers Energy Jon R. Robinson One Energy Plaza Room EP Jackson, Michigan (517) (517) (FAX) ( ) MPSC Staff Attorney David A. Voges Asst. Attorney General 6545 Mercantile Way, Suite 15 Lansing, Michigan (517) (517) (Fax) ( ) MPSC Staff Richard D. Whale 6545 Mercantile Way P.O. Box Lansing, MI (517) ( ) ABATE Robert A.W. Strong 255 S. Old Woodward Avenue Third Floor Birmingham, MI (248) (248) (Fax) ( ) The Detroit Edison Company Bruce R. Maters Jon P. Christinidis 2000 Second Ave. (Rm. 688 WCB) Detroit, MI (313) Maters (313) Christinidis (313) (FAX) ( ) ( ) ( ) Energy Michigan Eric J. Schneidewind Varnum, Riddering, Schmidt & Howlett 333 Bridges Street, N.W. Bridgewater Place Grand Rapids, Michigan (616) (616) (Fax) ( ) Great Lakes Energy Cooperative Albert Ernst Christine Mason-Soneral Dykema Gossett 124 W. Allegan Street, Suite 800 Lansing, Michigan (517) (517) (Fax) ( ) ( ) Market Power Service List Page 1 of 2

4 Indiana Michigan Power Company Ronald W. Bloomberg Loomis, Ewert, Parsley, Davis & Gotting 232 S. Capitol Avenue, Suite 1000 Lansing, Michigan (517) (517) (Fax) ( ) Midland Cogeneration Venture Michael J. Brown Howard & Howard 222 N. Washington Square, Ste. 500 Lansing, MI Phone: Fax: Marc E. Lewis Indiana Michigan Power Company One Summit Square P.O. Box 60 Fort Wayne, IN (219) (219) (FAX) ( ) International Transmission Company John H. Flynn 1901 S. Wagner Rd. Ann Arbor, Michigan (734) Ontario Power Generation, Inc. First Power L.L.C. Dynergy, Inc. David E.S. Marvin Michael S. Ashton Fraser Trebilcock Davis & Foster 124 W. Allegan Street 1000 Michigan National Tower Lansing, Michigan (517) (517) (FAX) ( ) ( ) PG&E National Energy Group John M. Dempsey Dickinson Wright, PLLC 101 North Main Street, Suite 535 Ann Arobor, Michigan (734) (734) (FAX) Market Power Service List Page 2 of 2

5 STATE OF MICHIGAN BEFORE THE MICHGIAN PUBLIC SERVICE COMMISSION In the matter of the Application ) of The Detroit Edison Company for a ) Determination of Compliance with ) Case No. U MCL f. ) ) APPLICATION The Detroit Edison Company ( Edison or Company ), requests the Michigan Public Service Commission ( Commission ) to find that Edison is in compliance with the provisions of Section 10f of 2000 PA 141, MCL f. In support thereof, Edison says: 1. Edison is a public utility providing electric energy to approximately two million retail electric customers in southeastern Michigan under rates and contracts approved by the Commission. 2. Edison s retail electric business is subject to the jurisdiction of the Commission pursuant to various statutes, including 2000 PA 141, MCL et seq. 3. In particular, MCL f provides as follows: Sec. 10f. (1) after subtracting the average demand for each retail customer under contract that exceeds 15% of the utility s retail load in the relevant market, an electric utility has commercial control over more than 30% of the generating capacity available to serve a relevant market, the utility shall do one or more of the following with respect to any generation in excess of that required to serve its firm retail sales load, including a reasonable reserve margin: (a) (b) Divest a portion of its generating capacity. Sell generating capacity under a contract with a nonretail purchaser for a term of at least five (5) years.

6 (c) Transfer generating capacity to an independent brokering trustee for a term of at least five (5) years in blocks of at least 500 megawatts, 24 hours per day. (2) The total generating capacity available to serve the relevant market shall be determined by the Commission and shall equal the sum of the firm available transmission capability into the relevant market and the aggregate generating capacity located within the relevant market, less one or more of the following: (a) (b) (c) If a municipal utility does not permit its retail customers to select alternative electric suppliers, the generating capacity owned by a municipal utility necessary to serve the retail native load. Generating capacity dedicated to serving on-site load. The generating capacity of any multi-state electric supplier jurisdictionally assigned to customers of other states. (3) Within 30 days after a Commission determination of the total generating capacity under subsection (2) in a relevant market, an electric utility that exceeds the 30% limit shall file an application with the Commission for approval of a market power mitigation plan. The Commission shall approve the plan if it is consistent with this act or require modifications to the plan to make it consistent with this act. The utility shall retain the right to determine what specific actions to take to achieve compliance with this section. (4) An independent brokering trustee shall be completely independent from and have no affiliation with the utility. The terms of any transfer of generating capacity shall ensure that the trustee has complete control over the marketing, pricing, and terms of the transferred capacity for at least five years and shall provide appropriate performance incentives to the trustee for marketing the transferred capacity. (5) Upon application to the Commission by the utility, the Commission may issue an order approving a change in trustees during the five (5) year term upon a showing that a trustee has failed to market the transferred generating capacity in a prudent and experienced manner. -2-

7 4. MCL g(e) defines relevant market as either the Upper Peninsula or the Lower Peninsula of this state. 5. This application presents the information necessary to determine compliance with the market test provisions of MCL f, and, therefore, Edison seeks Commission confirmation that it is in compliance with this section. 6. The direct testimony and exhibits of Edison s witness, Rodney Frame, filed contemporaneously with this application, demonstrates that Edison s share of the relevant market for the summer of 2003 is 37.3 percent, which is more than thirty percent of the generating capacity available to serve the relevant market. 7. The mitigation provisions of MCL f do not apply to generating capacity over which an electric utility has commercial control that is required to serve its firm retail sales load, including a reasonable reserve margin. The direct testimony and exhibits of Mr. Frame show that the Company will experience a capacity shortfall of 2,710 MW (1,578 MW when electric retail choice load is netted from service area load) in 2003, thus demonstrating that the amount of generating capacity over which the Company has commercial control is less than that required to serve its firm retail sales load, including a reasonable reserve margin. Therefore, the remaining market test provisions of MCL f do not apply. There is also no need for Edison to file a market power mitigation plan. 8. MCL d(2) directs the Commission to make a determination of compliance with the market test of MCL f after notice and hearing. Edison, therefore, requests that the Commission promptly provide for notice of this application, schedule a hearing and expeditiously grant the relief sought in this Application. -3-

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9 S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter of the application of ) THE DETROIT EDISON COMPANY ) For a determination of compliance with ) MPSC Case No. U MCL460.10f ) QUALIFICATIONS AND DIRECT TESTIMONY OF RODNEY FRAME

10 THE DETROIT EDISON COMPANY QUALIFICATIONS AND DIRECT TESTIMONY OF RODNEY FRAME I. QUALIFICATIONS Q. Please state your name and position. A. My name is Rodney Frame. I am a Managing Principal with Analysis Group, Inc. (Analysis Group). Q. What is your business address? A. My business address is 1747 Pennsylvania Avenue, N.W., Suite 250, Washington, DC Q. What is Analysis Group? A. Analysis Group is a consulting firm that provides microeconomic, strategy and financial analyses. We have offices in Boston, Washington, New York, Denver, Los Angeles, Menlo Park, San Francisco, Montreal and London. We have approximately 300 employees. Q. What is your formal educational background? A. I received a bachelors degree in business from George Washington University in Washington, DC. Also at George Washington, I completed all requirements for my Ph.D. in Economics with the exception of my thesis. My graduate studies were funded under the National Science Foundation Graduate Traineeship program. Q. Please describe your professional experience. A. I have been employed by Analysis Group since January Prior to my affiliation with Analysis Group, I was a Vice President at National Economic Research Associates, Inc. (NERA), where I was employed

11 R. Frame from 1984 to January Most of my work in the last several years, both at Analysis Group and at NERA, has involved consulting in the electricity industry on a variety of competition-related matters including retail competition and restructuring issues, wholesale bulk power markets and competition, transmission access and pricing, mergers and acquisitions and contracting for generation supplies from nonutility suppliers. I frequently address market power concerns in my work. I have testified on numerous occasions on these and related topics, before the Federal Energy Regulatory Commission (FERC), state regulatory commissions, federal and local courts and the Commerce Commission of New Zealand. I frequently speak before industry groups on competition-related topics. From 1976 to 1984 I was a Senior Economist with Transcomm, Inc. in Falls Church, VA. There I directed a number of projects concerning market structure and ratemaking in the telecommunications industry, competition among electric utilities, and postal ratemaking. Prior to my affiliation with Transcomm, I worked as an independent economic consultant advising clients mostly on telecommunications issues. A copy of my résumé is included as Exhibit (RF-3). Q. Have you testified previously before the Michigan Public Service Commission (Commission)? A. Yes. I testified in Cases No. U and U-12134, each time on behalf of Detroit Edison Company (Detroit Edison). II. PURPOSE AND ORGANIZATION Q. What is the purpose of your testimony? A. My testimony applies the MCL f test to Detroit Edison. Q. How is your testimony organized? 3

12 R. Frame A. Section III below provides a summary of my analysis and conclusions. Section IV describes the MCL f test while Section V describes the data sources that I used. Section VI presents my results. Section VII discusses some minor differences between the study herein and the analogous study recently submitted by Consumers Energy (Consumers) in Case No. U III. SUMMARY AND CONCLUSIONS Q. Please summarize your testimony. A. MCL f requires electric utilities that have commercial control over more than 30 percent of the generating capacity available to serve a relevant market, defined in MCL g(e) as either the Lower Peninsula or the Upper Peninsula of Michigan, to divest, sell by contract on a long term basis (five years or more) or transfer to an independent brokering trustee on a long term basis (five years or more) the generation that is in excess of that required to serve its firm retail sales load, including a reasonable reserve margin. My testimony applies this MCL f test to Detroit Edison. I determine that Detroit Edison has commercial control over more than 30 percent of the generating capacity available to serve the Lower Peninsula of Michigan, using the computational techniques outlined in MCL f, but also that it does not own or have under long term contract sufficient generation to meet its firm retail load plus its traditional 15 percent reserve margin. Accordingly, even though the 30 percent market share figure is exceeded, Detroit Edison does not need to sell or otherwise transfer control of any of its generation capacity in order to meet the MCL f market test. 4

13 R. Frame IV. THE MARKET TEST UNDER MCL f Q. What are the specific market test criteria of MCL f? A. MCL f(1) provides as follows: If, After subtracting the average demand for each retail customer under contract that exceeds 15% of the utility s retail load in the relevant market, an electric utility has commercial control over more than 30% of the generating capacity available to serve a relevant market, the utility shall do 1 or more of the following with respect to any generation in excess of that required to serve its firm retail sales load, including a reasonable reserve margin: (a) Divest a portion of its generating capacity. (b) Sell generating capacity under a contract with a nonretail purchaser for a term of at least 5 years. (c) Transfer generating capacity to an independent brokering trustee for a term of at least 5 years in blocks of at least 500 megawatts, 24 hours per day. MCL f(2) provides certain guidance for performing the computations called for under MCL f(1), indicating that total generation available to serve the relevant market shall be equal to the sum of (i) the firm available transmission capability into the relevant market and (ii) the generation capacity that is physically located there less the following three items: (a) generating capacity owned by municipal systems where retail choice has not been implemented to the extent it is needed to serve the municipal system s retail load, (b) generation capacity dedicated to serving on-site load, and (c) the generation capacity of any multistate supplier that is jurisdictionally assigned to customers in other states. MCL g(e) defines the relevant market as either the Lower Peninsula or the Upper Peninsula of Michigan. Accordingly, for purposes of applying the MCL f market test to Detroit Edison, the Lower Peninsula is the relevant market to be used. 5

14 R. Frame V. DESCRIPTION OF DATA SOURCES USED Q. What data sources did you use for your analysis? A. I used a variety of data sources for my analysis, which was performed based on generation and load that are expected for the summer of The data that were used for my analysis are included as part of my workpapers. Detroit Edison provided information on its generators and long term purchases, the generators owned by its affiliates and generation used in its service territory for on-site retail load. For generators owned by Consumers, I used information contained in Consumers March 31, 2003 filing in Case No. U The same information is also included in Exhibit 1 of Consumers March 31, 2003 MCL f filing in Case No. U I used information provided by Consumers to quantify generation capacity in Consumers service territory used to serve on-site retail load. Information on generators in the Lower Peninsula owned by American Electric Power Company s (AEP) Indiana Michigan Power Company affiliate was taken from AEP s March 27, 2003 filing in Case No. U I generally used Platts PowerDat database (PowerDat) to identify other (i.e., non-utility, municipally-owned and cooperative-owned) generation located within the Lower Peninsula. PowerDat is updated continually. I used a version from February For one merchant generator, I used information from the owner s website rather than PowerDat. By way of explanation, PowerDat indicates that the Renaissance Power Project has a capacity of MW. The website of Dynegy, the project s owner, indicates that the project began commercial operation in the second quarter of 2002 and that it has a capacity of 680 MW. See uary_2003.pdf. The Commission s website indicates that this same 6

15 R. Frame project began commercial operation in June 2002 and that it has a capacity of 546 MW. See restruct/merchantplants.htm. I used the information from the Dynegy website thinking that, as a general matter, information from a primary data source like this is likely to be more accurate than information from secondary sources such as PowerDat or the Commission s website. I used 5,500 MW as the amount of firm available transmission capability into the Lower Peninsula. This figure comes from the Joint Report attached to the December 28, 2000 application of International Transmission Company, Consumers Energy Company and Great Lakes Energy Cooperative in Case No. U Detroit Edison s most recent load forecast was used to determine whether Detroit Edison had generation in excess of that required to serve its firm retail load. That load forecast is contained in Detroit Edison s March 31, 2003 filing in Case No. U Q. How did you treat generation owned by AEP? A. Consistent with the requirements of MCL f(2)(c), AEP s generation was included only to the extent that it was not assigned to customers in other states. I allocated AEP s generation to Michigan based upon the proportional size of AEP s peak load there in comparison to the peak load for the entire AEP-East system. AEP- East s Michigan load represents approximately 2.8 percent of the total AEP-East peak load. This results in the assignment of 2.8 percent or 710 MW of the 25,370 MW of AEP-East generation resources to Michigan. The rest of the AEP-East generating resources (2,063 MW 710 MW) that are physically located in Michigan are allocated to other jurisdictions under this approach. 7

16 R. Frame Q. How did you treat municipally-owned generation? A. I believe that no customers of municipal systems in the Lower Peninsula have access to alternative suppliers and therefore, consistent with the requirements of MCL f(2)(a), included municipally-owned generation as a supply source for the Lower Peninsula relevant market only to the extent that a municipal system owns generation that exceeds the amount required to serve its retail load, including a reasonable reserve allowance. To determine this amount, the generation resources owned by each municipal system were taken from PowerDat and compared to the municipal system s load plus a 15 percent reserve margin. The municipal systems in the Michigan Public Power Agency (MPPA) and the Michigan South Central Power Agency (MSCPA) were aggregated and treated as part of the larger group, i.e., MPPA or MSCPA as appropriate, for determining whether they held capacity that was in excess of load plus a 15 percent reserve margin. Demands for MPPA and MSCPA were taken from recent FERC testimony filed by representatives of these entities. Demands for the other generationowning municipal systems in the Lower Peninsula were taken from the most recent edition of Platts Electrical World Directory (EWD). Under the procedures employed, only 54 MW of municipally-owned generation was identified and included in the study. Of this 54 MW, 48 MW comes from the Detroit Public Lighting Department (Detroit PLD). Detroit PLD has a peak load of 114 MW according to the most recent edition of the EWD and, from PowerDat, generating resources of 179 MW. After accounting for a reserve margin of 15 percent, this leaves Detroit PLD with a surplus of 48 MW. The remaining 6 MW comes from the Sebewaing Light & Water Plant system, which has a peak summer load of 5.6 MW and generating capacity of 12.4 MW. After accounting for a 15 percent reserve margin, this leaves Sebewaing with a modest surplus of 6 MW. 8

17 R. Frame Q. What adjustment did you make for generating capacity dedicated to serving on-site retail load? A. Based on information provided by Detroit Edison, I deducted 200 MW from the generation capacity of Dearborn Industrial Generation LLC to reflect the amount dedicated to serve on-site retail load. I used information provided by Consumers to make similar subtractions for generation capacity located in Consumers service territory. VI. RESULTS Q. Have you prepared exhibits that summarize the results of your analysis? A. Yes. Exhibit (RF-1) uses the procedures and data sources described above to compute Detroit Edison s generation capacity (owned generation capacity plus firm long term purchases) as a percent of all generation available to serve the Lower Peninsula relevant market. Exhibit (RF-2) provides a capacity excess/shortfall determination for Detroit Edison for summer 2003, comparing total firm resources (owned generation plus firm long term purchases) to resource requirements (forecast load plus the 15 percent reserve margin that Detroit Edison uses and has used traditionally). Q. What does Exhibit (RF-1) indicate? A. Exhibit (RF-1) indicates that, using the computational techniques and data sources described above, Detroit Edison s share of the relevant market for the Lower Peninsula of Michigan for the summer of 2003 is 37.3 percent. Q. What does Exhibit (RF-2) indicate? A. As discussed, Exhibit (RF-2) provides a capacity excess/shortfall determination for Detroit Edison for summer Two scenarios are shown, one where Detroit Edison s resource requirements are based 9

18 R. Frame upon its entire service area load, and one where, conservatively, Detroit Edison s resource requirements are based on service area load less electric choice load. I label this latter scenario as conservative because Detroit Edison still maintains an obligation to sell electricity to electric choice customers that wish to return to utility supply. Consistent with the requirements of MCL f(1), I do not include interruptible load in determining resource requirements under either of the two scenarios. The results indicate that Detroit Edison has a shortfall in each of the two scenarios, 2,710 MW when service area load is used in the analysis and 1,578 MW when electric choice load is netted from service area load in determining the shortfall amount. Thus, Detroit Edison does not own or have under long term contract sufficient generation capacity to meet its firm retail load plus its traditional 15 percent reserve margin. Q. What do you conclude from Exhibits (RF-1) and (RF-2)? A. Detroit Edison has a capacity shortfall based on a comparison of its resource obligation (forecast load plus 15 percent reserve margin) to its owned resources plus long term firm purchases and therefore meets the MCL f market test criteria notwithstanding that its share of resources available to serve the Lower Peninsula relevant market exceeds the 30 percent level specified in MCL f. VII. COMPARISON WITH CONSUMERS RECENT MCL f ANALYSIS Q. Have you examined the recent MCL f study submitted by Consumers? A. Yes. That study is contained in the Direct Testimony of John J. Dellas submitted in Case No. U

19 R. Frame Q. Please compare your study to Mr. Dellas study. A. The two studies employ the same general method and use many of the same data sources. Because of these similarities, the two studies produce results that are roughly comparable. For example, my study indicates that Detroit Edison has a 37.3 percent share of the Lower Peninsula market whereas Mr. Dellas study indicates that Detroit Edison has a 36.2 percent market share. My study indicates that the size of the Lower Peninsula market is 29,682 MW whereas Mr. Dellas study indicates that it is 30,633 MW. There are, however, some differences in data sources and assumptions that cause the two studies to produce slightly different results. These differences include the following: a. My study uses a more recent version of PowerDat. b. I use a slightly different technique than Mr. Dellas for developing the amount of AEP s generation that should be included in the study. Mr. Dellas assigns 600 MW to AEP based upon an estimate of the amount of load served by AEP in Michigan. My analysis uses that same load estimate but, in effect, increases it to account for planning reserves. c. Mr. Dellas includes in his study the approximately 1,200 MW Covert facility now being constructed by PG&E s National Energy Group (NEG). My study, very conservatively, does not include this facility. The reason that I excluded the Covert facility is that my study is done for summer 2003 and NEG s website indicates that the Covert Project is not expected to enter commercial operation until the fall of It is conservative to exclude Covert, as I have done, because the facility, as of April 2003, was already more than 80 percent complete according to the trade press. Even though the Covert facility will not be in commercial operation during this coming summer, it is expected to be in 11

20 R. Frame commercial operation shortly thereafter. Excluding Covert from the study, as I have done, has the effect of raising Detroit Edison s market share by 1.4 percentage points. The treatment of the Covert facility is the biggest difference between my study and Mr. Dellas study. d. Mr. Dellas does not include any municipally-owned generation in his study. As indicated, I have included 54 MW of municipallyowned generation in my study. e. Mr. Dellas uses internal company data rather than PowerDat for information concerning Consumers purchases. I did not have access to that internal Consumers data and so I used PowerDat even in cases where more precise information was available to Mr. Dellas. f. Mr. Dellas does not incorporate certain recent changes to Detroit Edison s generating capacity increased rating for Monroe unit 4 from 750 MW to 775 MW, increased rating for St. Clair unit 1 from 150 MW to 153 MW, increased rating for Conners Creek from 200 MW to 215 MW, sale of the 18 MW Beacon Heating unit, and placing the 167 MW Marysville unit in cold standby that are incorporated in my study. Q. Does that conclude your direct testimony? A. Yes. 12

21 Case No. U Exhibit No (RF-1) Witness: R. Frame Page: 1 of 1 Application of MCL f Test to Detroit Edison Summer 2003 I. Generation Capacity in Lower Peninsula (MW) a. Detroit Edison 11,062 b. Consumers Energy 6,444 c. Indiana Michigan Power (AEP) 710 d. Thumb Electric Cooperative 17 e. Wolverine Power Supply Cooperative 298 f. Municipally-Owned 54 g. Merchant and Other 5,597 II. Import Capability 5,500 III. Total Generation and Import Capability 29,682 Detroit Edison Percentage of Total: 37.3% Sources: I.a. - I.g. Workpapers II. Joint Report attached to December 28, 2000 application of International Transmission Company, Consumers Energy Company and Great Lakes Energy Cooperative in MPSC Docket No. U

22 Case No. U Exhibit No. (RF-2) Witness: R. Frame Page: 1 of 1 Detroit Edison Company Capacity Excess / Shortfall Determination For MCL f Test Summer 2003 Test with Service Area Load and 15% Reserve Margin (MW) Test with Detroit Edison Load and 15% Reserve Margin (MW) (1) Owned Generation Resources 10,959 10,959 (2) Long Term Firm Purchases (3) Total Resources 11,062 11,062 (4) Load 11,976 10,991 (5) Load plus Reserve Margin [(4) * 1.15] 13,772 12,640 (6) Excess / (Shortfall) [(3) - (5)] (2,710) (1,578) Sources: (1), (2) Detroit Edison's May 1, 2003 "Net Demonstrated Operating Capability - MW", less Marysville unit (84 MW). (4) Detroit Edison Report on Summer Capacity Plan, March 31, 2003, Michigan Public Service Commission Case No. U

23 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 1 of 18 RODNEY FRAME Managing Principal Phone: Pennsylvania Avenue, NW Fax: Suite 250 rframe@analysisgroup.com Washington, DC Mr. Frame has consulted with electric utility clients on a variety of matters including industry restructuring, retail competition, wholesale bulk power markets and competition, market power and mergers, transmission access and pricing, contractual terms for wholesale service, and contracting for nonutility generation. A substantial portion of the work has been in conjunction with litigated antitrust and federal and state regulatory proceedings. Mr. Frame frequently speaks before electric industry groups on competition-related topics. He has testified in federal and local courts, before federal and state regulatory commissions, and before the Commerce Commission of New Zealand. Prior to joining Analysis Group, Mr. Frame was a Vice President at National Economic Research Associates. Mr. Frame graduated from George Washington University and pursued graduate work there under a National Science Foundation Traineeship. His areas of specialization were public finance and urban economics. He completed all requirements for his Ph.D. degree in economics with the exception of the thesis. EDUCATION 1970 B.B.A., George Washington University Ph.D. coursework (all requirements for degree in economics completed except thesis), George Washington University PROFESSIONAL EXPERIENCE Analysis Group Managing Principal

24 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 2 of National Economic Research Associates Vice President and Senior Consultant. Participated in projects dealing with retail competition, wholesale competition, market power assessment and determination of relevant markets for electricity supply, electric utility mergers, transmission access and pricing, partial requirements ratemaking, contractual terms for wholesale service, and contracting for non-utility generation supplies. Principal clients were investor-owned electric utilities Transcomm, Inc. Senior Economist. Worked on a variety of projects concerning market structure, pricing and cost development in regulated industries. Clients included the U.S. Departments of Commerce, Defense and Energy, the Nuclear Regulatory Commission, the State of Oregon, bulk mailers and various communications equipment manufacturers and service providers. Participated in numerous federal and state regulatory proceedings and was principal investigator for a multi-year Department of Energy study addressing various aspects of electric utility competition Independent Economic Consultant Advised telephone equipment manufacturers concerning cost and rate development for competitive telephone offerings, analyzed alternative travel agent compensation arrangements and examined nonbank activity by bank holding company firms Program of Policy Studies in Science and Technology Research Staff 1973 Urban Institute Research Staff TESTIFYING EXPERIENCE Testimony on behalf of the PJM Transmission Owners, before the Federal Energy Regulatory Commission in Docket No. ER , concerning the appropriate equity return and depreciation lives for new transmission assets constructed by transmission owners pursuant to a regional transmission expansion plan, April 11, Affidavit on behalf of Ameren Energy Generating Company and Union Electric Company d/b/a AmerenUE, before the Federal Energy Regulatory Commission in Docket No. EC , concerning competitive issues raised by the proposed transfer of certain generating facilities from Ameren Energy Generating Company to AmerenUE, March 13, Rebuttal Testimony on behalf of Public Service Electric and Gas Company, before the Federal Energy Regulatory Commission in Docket No. EL (Phase II), concerning financial responsibility for redispatch costs and market power issues associated with certain transmission agreements between Public Service Electric and Gas Company and Consolidated Edison Company, February 20, Testimony on behalf of FirstEnergy Corp and its operating company affiliates The Cleveland Electric Illuminating Company, The Toledo Edison Company, and Ohio Edison Company, before the Public Utilities Commission of Ohio in Case No EL-CSS, concerning the terms and conditions under which the operating companies should purchase the accounts receivables of competitive retail electric service providers, February 19, 2003.

25 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 3 of 18 Affidavit on behalf of Detroit Edison and various affiliates of its in Dockets Nos. ER et al applying the Commission s SMA test to those entities, January 31, Rebuttal testimony on behalf of certain Classic PJM Transmission Owners before the Federal Energy Regulatory Commission in Docket No. EL , concerning the appropriateness of seams charges for transmission service between the MISO and PJM regions, December 10, Direct testimony on behalf of certain Classic PJM Transmission Owners before the Federal Energy Regulatory Commission in Docket No. EL , concerning the appropriateness of seams charges for transmission service between the MISO and PJM regions, November 14, Affidavit on behalf of Southern Company Services before the Federal Energy Regulatory Commission in Docket No. PL02-8, Conference on Supply Margin Assessment, assessing the Commission s proposed SMA market screen and accompanying market power mitigation measures, October 22, Second affidavit on behalf of Garnet Energy LLC in Docket No. ER , before the Federal Energy Regulatory Commission, responding to intervenor claims about the proper method for applying the Commission s application for market pricing authority, August Direct Testimony on behalf of Ameren Services Company before the Federal Energy Regulatory Commission in Docket No. EC concerning competitive issues raised by Ameren s proposed acquisition of Central Illinois Lighting Company, July 19, Affidavit on behalf of Garnet Energy LLC in Docket No. ER , before the Federal Energy Regulatory Commission, concerning application of the Commission s SMA test to Garnet, an affiliate of Idaho Power Company, July 11, Testimony on behalf of Public Service Electric and Gas Company concerning vertical market power issues associated with certain transmission agreements between Public Service Electric and Gas Company and Consolidated Edison Company, before the Federal Energy Regulatory Commission in Docket No. EL , July 1, Affidavit on behalf of applicants Wisvest Corporation, Wisvest-Connecticut, LLC and PSEG Fossil LLC concerning competitive issues presented by PSEG Fossil s proposed acquisition of Wisvest-Connecticut, before the Federal Energy Regulatory Commission in Docket Nos. EC , ER and ER , June 28, Direct testimony on behalf of Ameren Corporation concerning competitive issues raised by Ameren s proposed acquisition of Central Illinois Lighting Company, before the Illinois Commerce Commission in Docket No. EC , June 19, Rebuttal testimony on behalf of PSEG Power in New York Public Service Commission Case No. 02-M-0132 responding to intervenor concerns about alleged horizontal and vertical market power problems arising from PSEG s construction of the Cross Hudson Project, May, 2002.

26 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 4 of 18 Affidavit on behalf of Southern Company Services, in Docket No. ER , before the Federal Energy Regulatory Commission, describing appropriate procedures for triennial market pricing update and addressing whether Southern Company Services has market power in wholesale electricity markets, April 30, Direct testimony on behalf of PSEG Power in New York Public Service Commission Case No. 02-M-0132 concerning market power implications of the application of PSEG Power to construct an approximately eight mile radial connection between Bergen Generating Station in New Jersey and Consolidated Edison Company s West 49 th Street Substation in New York City, April 26, Expert report on behalf of Virginia Electric and Power Company in Virginia Electric and Power Company v. International Paper Company, Civil Action No. 2:01cv703, United States District Court, Eastern District of Virginia, Norfolk Division, Concerning damages issues associated with terminated NUG contract, March 21, Affidavit on behalf of Crete Energy Venture, LLC in Docket No. ER , before the Federal Energy Regulatory Commission, concerning applying the Commission s SMA test to a joint venture of Entergy and DTE, February 4, Second Affidavit on behalf of Alliant Energy Service, Inc. in Docket No. ER , before the Federal Energy Regulatory Commission, concerning appropriate computational procedures and data sources for applying the Commission s SMA test, January 24, Affidavit on behalf of Rainy River Energy Corporation-Taconite Harbor in Docket No. ER , before the Federal Energy Regulatory Commission, to apply the supply margin assessment market power test to Minnesota Power and its affiliates, January 7, Affidavit on behalf of Alliant Energy Services, Inc. in Docket No. ER , before the Federal Energy Regulatory Commission, to apply the Supply Margin Assessment test to Alliant Energy Corporation to determine whether mitigation is required for affiliates of Alliant with market pricing authority under the procedures recently promulgated by the Commission, December 18, Affidavit on behalf of Southern Company Services in Docket Nos. ER , ER , ER , ER , ER and ER before the Federal Energy Regulatory Commission addressing the economic underpinnings of the Commission s SMA test, including its usefulness as a market power screening device, as well as the appropriateness of the mitigation measures that the Commission has ordered, December 14, Affidavit on behalf of Rainy River Energy Corporation Wisconsin before the Public Service Commission of Wisconsin in Docket No. 05-CE-128, providing a market power screen analysis to support Rainy River s application to the Wisconsin Public Service Commission to construct, own and operate the Superior project, December 3, Affidavit on behalf of Attala Energy Company, LLC before the Federal Energy Regulatory Commission in Docket No. ER providing a Supply Margin Assessment, consistent with proposed FERC rules, for its generation, November 5, 2001.

27 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 5 of 18 Prepared Rebuttal Testimony on behalf of Appalachian Power Company d/b/a American Electric Power before the State Corporation Commission of Virginia in SCC Case No. PUE010011, concerning AEP s corporate separation plan, October 5, Affidavit on behalf of Southern Company Services before the Federal Energy Regulatory Commission in Docket No. RM concerning potential competitive harms that could result if commercially sensitive transaction data is made available to the public, October 5, Affidavit on behalf of PSEG Lawrenceburg before the Federal Energy Regulatory Commission in Docket No. ER concerning market power issues associated with construction of new generation facilities, June 27, Affidavit on behalf of PSEG Waterford Energy Company before the Federal Energy Regulatory Commission in Docket No. ER , concerning market power issues associated with construction of new generation facilities, June 27, Prepared Rebuttal Testimony on behalf of Applicants FirstEnergy and Jersey Central Power & Light before the New Jersey Board of Public Utilities responding to allegations about defects in the competitive analysis of the proposed FirstEnergy-GPU merger, April 23, Affidavit on behalf of Nine Mile Point Nuclear Station, LLC, before the Federal Energy Regulatory Commission in Docket No. ER01- -, concerning market based pricing by Nine Mile Point Nuclear Station, LLC. Affidavit on behalf of Niagara Mohawk Power Corporation, New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Hudson Gas & Electric Corporation and Nine Mile Point Nuclear Station, LLC before the Federal Energy Regulatory Commission concerning competitive issues raised by the proposed acquisition of the Nine Mile Point 1 nuclear unit and a portion of Nine Mile Point 2 nuclear unit by an affiliate of Constellation Energy Group, February 28, Affidavit on behalf of Constellation Energy Group, et al., before the Federal Energy Regulatory Commission in Docket Nos. EC and ER , concerning market based pricing by affiliates of Constellation Energy Group, December 28, Prepared Direct Testimony on behalf of FirstEnergy and GPU, Inc. before the Federal Energy Regulatory Commission in Docket No. EC concerning competitive issues raised by the proposed merger of FirstEnergy and GPU, November 9, Prepared Direct Testimony on behalf of FirstEnergy and GPU, Inc. before the Pennsylvania Public Utility Commission in Application Docket No. A- concerning competitive issues raised by the proposed merger of FirstEnergy and GPU, November 9, Prepared Direct Testimony on behalf of FirstEnergy and GPU, Inc. before the Board of Public Utilities of the State of New Jersey in Docket No. concerning competitive issues raised by the proposed merger of FirstEnergy and GPU, November 9, Deposition in the matter of Illinois Power Company and Illinova Corporation v. Wegman Electric Company et al, No. 98-L-280, Circuit Court of the third Circuit of Illinois, Madison County, concerning damages from having electric generating stations out of service, October 17, 2000

28 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 6 of 18 Affidavit and Declaration on behalf of Alabama Power Company before the Environmental Protection Agency in FOIA RIN , concerning appropriateness of protecting certain competitively valuable documents from public release, October 13, Affidavit on behalf of Northeast Utilities Service Company and Select Energy Inc. before the Federal Energy Regulatory Commission in Docket No. EL , concerning the cost of providing ICAP to New England capacity market, September 25, Affidavit on behalf of Ameren Energy, Inc. before the Federal Energy Regulatory Commission in Docket Nos. ER and ER concerning market based pricing of wholesale electricity by Ameren, September 22, Affidavit on behalf of Alabama Power Company before the Federal Communications Commission in P.A. No , concerning appropriateness of protecting certain competitively sensitive information from public release, September 6, Affidavit on behalf of Gulf Power Company before the Federal Communications Commission in P.A. No , concerning appropriateness of protecting certain competitively sensitive information from public release, September 6, Affidavit on behalf of Southern Company and Southern Energy, Inc. before the Federal Energy Regulatory Commission in Docket No. EC , concerning whether the proposed spin-off of Southern Energy Inc. would create competitive concerns, August 15, Affidavit on behalf of Northeast Utilities Service Company before the Federal Energy Regulatory Commission in Docket No. EL and ER concerning proposed termination of ICAP market and proposed mitigation of ICAP prices, May 30, Prepared Rebuttal Testimony on behalf of Detroit Edison Company before the Michigan Public Service Commission in Case No. U concerning the design of a code of conduct for implementing retail customer choice, March 21, Affidavit on behalf of Split Rock Energy LLC in Docket No. ER concerning Split Rock LLC s application for market based pricing authority, March 10, Affidavit on behalf of Baltimore Gas and Electric Company, Calvert Cliffs, Inc., Constellation Enterprises, Inc. and Constellation Generation, Inc. in Docket No. EC and on behalf of Baltimore Gas and Electric Company, Calvert Cliffs, Inc., Constellation Generation, Inc., and Constellation Power Source, Inc. in Docket No. ER concerning the application of Calvert Cliffs, Inc. and Constellation Generation, Inc. for market based pricing authority, February 11, Deposition in the matter of Cleveland Thermal Energy Company v. Cleveland Electric Illuminating Company, Case No. 1: 97 CV 3023, United States District Court, Northern District of Ohio, Eastern Division, October 15, December 7 and December 8, 1999, concerning competitive issues and damages.

29 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 7 of 18 Supplemental Expert Report on behalf of Cleveland Electric Illuminating Company in Cleveland Thermal Energy Corp. v. Cleveland Electric Illuminating Company, Case No. 1: 97 CV 3023, United States District Court, Northern District of Ohio, Eastern Division, December 1, 1999, concerning damages issues. Expert Report on Behalf of Cleveland Electric Illuminating Company in Cleveland Thermal Energy Corp. v. Cleveland Electric Illuminating Company, Case No. 1: 97 CV 3023, United States District Court Northern District of Ohio, Eastern Division, September 27, 1999, concerning allegations that a clause giving Cleveland Electric Illuminating Company the right to purchase electricity at avoided costs from a cogeneration plant that Cleveland Thermal Energy Corp. would have constructed was anticompetitive and an unreasonable restraint of trade, and computing damages. Deposition in the matter of Florida Municipal Power Agency v. Florida Power & Light Company, Case No CIV-ORL22C, United States District Court, Middle District of Florida, Orlando Division, concerning damages and market issues, August 31, Expert Report on Behalf of Florida Power & Light Company in Florida Municipal Agency v. Florida Power & Light Company in Case No CIV-ORL22C, United States District Court, Middle District of Florida, Orlando Division, concerning damages and market issues, August 26, Affidavit on behalf of AmerGen Energy Company before the Federal Energy Regulatory Commission in Docket Nos. EC and ER concerning AmerGen s proposed acquisition of the Clinton nuclear unit, August, Affidavit on behalf of AmerGen Energy Company before the Federal Energy Regulatory Commission in Docket Nos. EC and ER concerning AmerGen s proposed acquisition of the Nine Mile Point 1 nuclear unit and a portion of the Nine Mile Point 2 nuclear unit, July, Affidavit on behalf of Minnesota Power, Inc. before the Federal Energy Regulatory Commission in Docket No. ER concerning Minnesota Power s application for market based pricing authority, July, Deposition in the matter of Allegheny Energy Inc. v. DQE, Inc., Civ. A. No (RJC), United States District Court, Western District of Pennsylvania, June 11, 1999, concerning issues relating to the value of plaintiff s generating assets. Affidavit on behalf of Public Service Electric and Gas Company (PSEG) before the Federal Energy Regulatory Commission concerning PSEG s request to transfer its generating assets to an affiliate in Docket No. EC , June Expert Report on behalf of Allegheny Energy in Allegheny Energy Inc. v. DQE, Inc. Civ. A. No (RJC), United States District Court, Western District of Pennsylvania, May 17, 1999, concerning issues relating to the value of plaintiff s generating assets. Affidavit on behalf of Baltimore Gas & Electric (BG&E) Company before the Federal Energy Regulatory Commission concerning BG&E s application for market based pricing authority in Docket No. ER , May 13, 1999.

30 Case No.: U Exhibit: (RF-3) Witness: R. Frame Page 8 of 18 Affidavit on behalf of Florida Power & Light in Florida Municipal Power Agency v. Florida Power & Light Co., Case No CIV-ORL-22 concerning legitimacy of Florida Power & Light s conduct, March 22, Affidavit on behalf of PECO Energy before the Federal Energy Regulatory Commission concerning PECO s application of market based pricing authority in Docket No ER , February, Affidavit on behalf of Northeast Utilities before the Federal Energy Regulatory Commission concerning Northeast Utilities application for market based pricing authority in Docket No. ER , February, Affidavit on behalf of AmerGen Energy Company, LLC (AmerGen) before the Federal Energy Regulatory Commission in Docket Nos. EC , EL and ER concerning (i) AmerGen s acquisition of Three Mile Island No. 1 from GPU, Inc. and (ii) AmerGen s application for market based pricing authority, November, Affidavit on behalf of Constellation Energy Source, Inc. (CES) before the Federal Energy Regulatory Commission in Docket No. ER concerning CES s application for market based pricing authority, October 14, Affidavit on behalf of Select Energy, Inc. (Select) before the Federal Energy Regulatory Commission in Docket No. ER concerning Select s application for market based pricing authority, October 1, Rebuttal Testimony on Retail Market Power Issues on behalf of Mississippi Power Company, before the Mississippi Public Service Commission in Docket No. 96-UA-389 concerning whether Mississippi Power Company will be able to exercise market power in deregulated retail markets in Mississippi, September 11, Prepared Testimony and Report on Retail Market Power Issues on behalf of Mississippi Power Company, before the Mississippi Public Service Commission in Docket No. 96-UA-389, concerning whether Mississippi Power Company will be able to exercise market power in deregulated retail markets in Mississippi, August 7, Affidavit on behalf of Southern California Edison Company to the Federal Energy Regulatory Commission concerning market power issues associated with the supply of ancillary services to the California ISO, July 13, Prepared Rebuttal Testimony on Behalf of Public Service Electric & Gas Company, with Paul Joskow, before the State of New Jersey, Board of Public Utilities, in Docket Nos. EX Y, E , E , E and E , responding to market power issues raised by intervenor witnesses, including in particular the role of transmission constraints in market power analyses, appropriate mitigation measures for load pocket situations, proper standards for granting market based pricing authority, the role of transitional mechanisms in mitigating market power concerns and the use and role of market simulations in addressing market power topics, April 13, 1998.