April 3, 2007

The Michigan Public Service Commission (MPSC) today approved The Detroit Edison Company's second revised renewable energy program proposal, placing conditions on the use of out-of state renewable energy certificates (RECs). A REC is a tradable certificate of proof that one kWh of electricity has been generated by a renewable-fueled source and then sold to an end-user in the state.

Detroit Edison originally submitted an application for a renewable resources program on July 1, 2005, and resubmitted it on Sept. 14, 2005, following discussions with the MPSC staff.

On Sept. 26, 2006, the MPSC issued an order rejecting the company's proposal noting its interest in giving greater weight to in-state renewables. The MPSC, in that order, also required the company to resubmit its revised proposal by March 30, 2007.

The utility filed its second revised renewable resource program application on Dec. 15, 2006. Under this proposal, Detroit Edison will manage and operate a program that obtains renewable energy for customers through the purchase of RECs. The proposal also focuses increased attention on the development of new, Michigan-based renewable energy facilities, including those that might be built in its service territory or in Southeast Michigan .

Detroit Edison's proposal would make available a tariff allowing customers to voluntarily agree to pay a price premium of two cents per kilowatt-hour (kWh) for all their energy delivered by Detroit Edison. As a second option, a customer could purchase blocks of 100 kWh for an additional $2.50 each.

On Dec. 21, 2006, the MPSC reiterated its concerns with the company's application and invited public comment on the utility's second revised renewable resource program proposal.

In approving the company's proposal today, the MPSC said it shares the concerns of the commenters who question whether the program, as envisioned, will provide ample incentive to support the development of potential new, in-state renewable energy facilities. The MPSC, however, said it is prepared to treat the utility's proposed program as a trial approach to encourage additional renewable resource facilities in Michigan. The Commission, noting that out-of-state renewable energy facilities are not likely to provide the same level of benefits as in-state facilities, will allow for the use of out-of-state RECs only to the extent they provide recognizable economic, environmental, or other benefits to ratepayers.

Therefore, the MPSC is requiring the company to file a report by March 31, 2008 that identifies its sources of renewable energy certificates, examines whether the proposal increases construction of in-state renewable energy facilities, reconciles the costs and revenues from the program, demonstrates that any revenues in excess of costs are spent on renewable energy development in Michigan, and proposes how the cost of participation in the program could be lowered.

The MPSC is an agency within the Department of Labor & Economic Growth.

Case No. U-14569