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South Dakota Public Utilities Commission
For the Period January 13, 2011, through January 19, 2011

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Natural Gas 

NG11-001 - In the Matter of the Application of NorthWestern Corporation dba NorthWestern Energy for its purchase of the Milbank NNG Pipeline 

            On January 18, 2011, the Commission received an application from NorthWestern Corporation dba NorthWestern Energy (NorthWestern) requesting the Commission approve, pursuant to SDCL Sections 49-34A-35 and 49-34A-36, its purchase of the Milbank NNG (Northern Natural Gas) pipeline and associated tariff revisions. The NNG line is a 55-mile pipeline originating at a Northern Border Pipeline tap near Brandt, South Dakota, and extending to the valve at the South Dakota state line in Big Stone City, South Dakota. The NNG pipeline serves retail customers in the Milbank area as well as Saputo Cheese, Valley Queen Cheese, Minnesota Energy Resources Corporation (MERC) and POET. NorthWestern proposes the pipeline related costs associated with the provision of service to these four large customers be recovered through new distance sensitive capacity fees under Rate 87 which NorthWestern seeks approval of in this filing. NorthWestern also requests that when approved, the Commission specifically state these rates are cost based rates. NorthWestern also requests Commission approval of full recovery of the purchase price of the pipeline in rate base at the time of the next general rate case (pursuant to SDCL 49-34A-19). NorthWestern also requests a deferral or regulatory asset be established to recover the pipeline costs at the time of the next general rate case, which are not assigned to the four large customers but are assigned to NorthWestern's overall system. 

As part of this purchase, NorthWestern agrees to maintain and operate approximately 200 farm taps located along Northern Natural Gas' transmission pipeline in eastern South Dakota until December 31, 2017. NorthWestern seeks approval to adopt MERC's existing rates to provide such service. NorthWestern proposes to bill these customers for gas supply utilizing its own Purchased Gas Adjustment Clause rates and proposes follow its own existing tariffs for general terms and conditions including payment terms, disconnect/reconnect fees, service rules, etc. NorthWestern requests the Commission act on this filing on or before March 15, 2011.  

Staff Analysts: Dave Jacobson, Nathan Solem and Joshua Williams
Staff Attorney: Kara Semmler
Date Filed: 01/18/11
Intervention Deadline: 02/04/11

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