June 29, 2011 Mary Jo Kunkle Michigan Public Service Commission 6545 Mercantile Way P.O. Box 30221 Lansing, MI 48909 RE: MPSC Case No. U-16582 Dear Ms. Kunkle, Please find attached the Direct Testimonies of Carrie Cullen Hitt and David Wright on behalf of the Environmental Law & Policy Center, for electronic filing in MPSC Docket U- 16582. Also attached are Exhibits ELP-1 to ELP-12. Please feel free to contact me with any questions. Sincerely, ___________________________ Brad Klein Staff Attorney Environmental Law & Policy Center 35 E Wacker Drive, Suite 1600 Chicago, IL 60601 cc: Parties to Case No. U-16582 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION ************************** In the matter, on the Commission’s own motion ) regarding the regulatory reviews, revision ) determinations, and/or approvals necessary for ) THE DETROIT EDISON COMPANY to fully ) Case No. U-16582-RPS comply with Public Acts 286 and 295 of 2008 ) QUALIFICATIONS & DIRECT TESTIMONY OF CARRIE CULLEN HITT ON BEHALF OF THE ENVIRONMENTAL LAW & POLICY CENTER June 29, 2011 C. Cullen Hitt Direct Case No. U-16582 1 DIRECT TESTIMONY OF CARRIE CULLEN HITT 2 3 BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION 4 5 CASE NO. U-16582 6 7 BACKGROUND AND QUALIFICATIONS 8 9 Q. Please state your name, business address, and affiliation. 10 A. My name is Carrie Cullen Hitt, and my business address is P.O. Box 534, North Scituate, 11 MA 02066. 12 13 Q. Please summarize your position with the Solar Alliance? 14 A: I am the President. As President, I lead our member companies and other Solar Alliance 15 personnel to work with state administrators, legislators and utilities to establish cost 16 effective solar policies and programs throughout the United States. 17 18 19 Q. Please Describe Your Professional Experience. 20 A. My experience and qualifications are described in my curriculum vitae, which is Exhibit 21 ELP-1 to this testimony. With respect to the matters to be decided in this case, I have 22 extensive experience. As the former Vice President for Regulatory Affairs at 23 Constellation New Energy, I was involved in or oversaw participation in numerous cases 24 throughout the US related to utility retail rates and cost recovery. In addition, I am 25 familiar with policies and industry frameworks that set the framework for adequate 26 development of renewable resources. With respect to solar issues, I am generally 27 familiar with technical and economic characteristics of the solar PV industry. In 28 addition, I have provided expert witness testimony before several state public utility 29 commissions. 30 31 Q. What is your educational background? 32 A. I hold a Bachelors of Arts degree from Clark University in Government and History, and 33 a Masters of Arts from Johns Hopkins University – Paul H Nitze School of Advanced 34 International Studies in International Affairs. 4 C. Cullen Hitt Direct Case No. U-16582 1 2 Q. Have you previously testified before the Commission? 3 A: No, I have not testified before this Commission. 4 5 Q. On whose behalf are you offering testimony in this proceeding? 6 A. I am testifying on behalf of the Solar Alliance. 7 8 Q. Who is sponsoring your testimony in this proceeding? 9 A. The Environmental Law and Policy Center, a party to this proceeding, is sponsoring my 10 testimony in this proceeding. 11 12 Q. Please provide a brief description of the Solar Alliance. 13 A. The Solar Alliance is a group of 32 companies that work together throughout the United 14 States to promote cost effective solar policies. Member of the Solar Alliance include 15 manufacturers, installers, integrators and financiers. The Solar Alliance came together 16 informally in 2007 as a few companies and since then has grown its membership base, 17 hired staff and expanded its focus to more states that are looking to expand solar markets. 18 19 Q. Please State the purpose of your testimony in this case. 20 A. The purpose of my testimony is to address Detroit Edison Company’s Renewable Energy 21 Plan and to recommend that Detroit Edison expand the customer-owned component of 22 the SolarCurrents Program (“Program”). I will address why the Commission should order 23 the Company to adopt slight modifications to its program. I will identify those 24 modifications and provide recommendations for their implementation via a Working 25 Group that I recommend the Commission convene. 26 27 Q. Please summarize Detroit Edison Company’s proposed renewable energy plan? 28 A. Detroit Edison Company filed its plan pursuant to the requirements of Michigan Public 29 Act 295, known as the “Clean, Renewable, and Efficient Energy Act”. This Act has as its 30 purpose to “promote the development of clean energy, renewable energy, and energy 31 optimization through the implementation of clean, renewable, and energy efficient 32 standards” cost-effectively. This promotion is to be accomplished through numerous 5 C. Cullen Hitt Direct Case No. U-16582 1 measures including diversifying resources to reliably meet consumers’ energy needs 2 throughout the state, encouraging private investment in renewable energy, and providing 3 for greater energy security organically in the state. The Company’s SolarCurrents 4 program has fostered a small solar market in Michigan, but there is still much room for 5 growth. However, instead of expanding its solar program, the amended Plan filed by 6 Detroit Edison on June 2, 2011 decreases diversity of resources, scales down the solar 7 program and focus solely on the utility-owned portion of the SolarCurrents program. 8 9 Q. What concerns do you have with Detroit Edison Company’s proposal? 10 A. I am concerned with the Company’s proposal to decrease and effectively end its 11 customer-owned solar program. Detroit Edison’s customer-owned portion of the solar 12 pilot program, SolarCurrents, was a successful program. The program created demand for 13 solar in the state, thereby supporting local businesses along the entire solar supply chain 14 from manufacturing to installation. I am attaching as Exhibit ELP-2 a recent report by 15 the Environmental Law and Policy Center that describes the growth of the renewables 16 industry in Michigan. The Company’s program created success stories in cities, 17 businesses and at homes throughout the Detroit Edison Company territory. 18 19 Q. Please describe Detroit Edison’s customer-owned SolarCurrents program. 20 A. The Company’s solar pilot program, SolarCurrents, is comprised of a 5 MW customer- 21 owned program and a 15 MW company-owned program. The energy from customer- 22 owned solar projects is purchased by Detroit Edison through 1) an upfront rebate of $2.40 23 per Watt and 2) a production incentive of $0.11 per kilowatt hour (kWh) over a 20-year 24 fixed rate contract term. Owners of systems ranging from 1-20 kilowatts (kW) were 25 eligible to apply. The initial program was capped at 5MW and is fully subscribed, 26 demonstrating the significant interest of the public in solar photovoltaic (“PV”) programs. 27 According to witness Dimitry’s testimony, Detroit Edison’s amended Renewable Energy 28 Plan includes a portfolio of approximately 1,000 MW of renewable energy generating 29 assets. These assets are either owned by the Company, or the output is contracted to the 30 Company. Therefore, the Company’s 5 MW customer-owned program represents only 31 0.05% of the entire Plan. The Company’s solar programs combined (customer- and 32 utility-owned) account for only 2% of the entire Plan. 6 C. Cullen Hitt Direct Case No. U-16582 1 2 Q. How does the SolarCurrents program compare to solar programs in other states? 3 A. SolarCurrents is an extremely small program compared to utility sponsored solar 4 programs in markets where solar is thriving. For example, the Long Island Power 5 Authority’s Solar Pioneers Program has reported more than 3300 PV systems installed 6 over the past 10 years with an average system size of 5.9 kW. In Colorado, Xcel 7 Energy’s Solar Rewards Program has installed more than 75 MW of solar since the 8 program was launched in early 2006. 9 10 11 Q. Why should Detroit Edison Company continue or expand its customer-owned 12 SolarCurrents program? 13 A. There are at least two (2) reasons that the customer-owned SolarCurrents program 14 should be expanded. First, solar development creates jobs. Long-term, steady expansion 15 of Michigan’s solar energy market will contribute to Michigan’s economic recovery. 16 Second, the cost of solar equipment is declining, thus additional solar investment in 17 Michigan will become more and more cost-effective. Ultimately more solar offers a long 18 term, stable component for the state’s energy mix by providing power source that is not 19 subject to fuel adjustments, thus helping to mitigate future price impacts across 20 Michigan’s ratebase. 21 22 Q. Please explain. 23 A. As the solar market expands in Michigan, more local jobs will be created and sustained, 24 and in-state manufacturing will thrive. Among renewable technologies, solar PV is 25 known to create the most jobs per MW. Of these jobs, most of them are direct jobs, in the 26 installation and servicing of PV installations. Attached to my testimony as Exhibit ELP-3 27 is an excerpt from a report by authors Max Wei, Shana Patadia, and Daniel M. Kammen 28 that discusses solar job creation. 29 30 It is well-documented that “boom-and-bust” cycles caused by solar incentive programs 31 that start and stop unpredictably are very damaging to the developing solar industry.