South Dakota Public Utilities Commission Meeting
February 9, 2010, at 2:30 P.M. CST
Room 413, Capitol Building
Pierre, South Dakota
MINUTES OF THE COMMISSION MEETING
Chairman Dusty Johnson called the meeting to order. Present were: Vice Chairman Steve Kolbeck; Commissioner Gary Hanson; Executive Director Patty Van Gerpen; Commission Attorneys John Smith and Rolayne Wiest; Staff Attorneys Kara Semmler and Karen Cremer; Staff Analysts Terri LaBrie Baker, Bob Knadle, Tim Binder, Brian Rounds and Jon Thurber; Consumer Affairs Supervisor Deb Gregg; and Administrative Secretary Demaris Axthelm.
Also present were: Dave Gerdes, May, Adam, Gerdes and Thompson, representing Montana-Dakota Utilities Co.; Meredith Moore, Cutler and Donahoe, representing Kennebec Telephone; Jim Alder and Jim Wilcox, Xcel Energy; Tom Brause, Heidi Konynenbelt, Brian Draxten, and Bruce Gerhardson, representing Otter Tail Power Company; and Margo Northrup, Riter, Rogers, Wattier and Northrup, representing South Dakota Telephone Association and Midstate's Communication.
Joining the meeting by telephone were: Staff Analyst Dave Jacobson; Talbot Wieczorek, Gunderson, Palmer, Goodsell and Nelson, representing Alltel Communications, Inc.; Jeff Decker representing NorthWestern Energy; Kari Clark and Mat Loftus representing Xcel Energy; and Don Ball and Garnet Senger representing Montana-Dakota Utilities.
1. Status Report on Consumer Utility Inquiries and Complaints Received by the Commission. (Consumer Affairs: Deb Gregg)
Ms. Deb Gregg reported that the Commission received a total of 148 contacts since the last report was prepared for the January 19, 2010, commission meeting. Thrity contacts involved telecommunications services; 54 contacts involved electrical services; 14 contacts involved natural gas services; 11 contacts involved cell phone services; 1 contact involved the Keystone XL Pipeline, 14 contacts involved the Do Not Call Registry; 1 contact was related to Wind Energy; and 22 contacts involved issues not regulated by the Public Utilities Commission. In 2010, 209 of the 242 complaints registered have been resolved. In 2009, 2,523 of the 2,537 complaints registered have been resolved.
1. EL09-024 In the Matter of the Filing by Otter Tail Power Company for Approval to Use Deferred Accounting for Costs Incurred During its Participation in the Big Stone II Project. (Staff Analysts: Dave Jacobson, Terri LaBrie Baker, Jon Thurber, Staff Attorney: Karen Cremer)
Mr. Bruce Gerhardson, general counsel for Otter Tail Power Company (OTP), provided a background on costs incurred during the Big Stone II project and the reasons for requesting the use of the deferred accounting method. Mr. Gerhardson stated that through the use of deferred accounting, OTP's current accounting will be preserved until the next rate case. A Power Point presentation by Mr. Gerhardson can be found at: http://puc.sd.gov/commission/dockets/electric/2009/el09-024/presentation.pdf. Ms. Terri LaBrie Baker, Staff Analyst, stated Commission Staff does not object to OTP's request for deferred accounting, but with the condition that the deferral/amortization accounting method and the resulting creation of a regulatory asset (the deferred balance) shall not preclude Commission review of these amounts for reasonableness for rate recovery in any determination of rates, including both rate filings by the company and rate reviews initiated by the Commission. Also, that this allowance of a deferral/amortization accounting method and the resulting creation of a regulatory asset, after the related costs have been incurred, is not to be interpreted as allowing future post expenditure deferrals.
Chairman Johnson moved to approve the deferred billing method with the two conditions set forth by staff. Motion passed 3-0
2. EL09-025 In the Matter of the Application by Montana-Dakota Utilities Co. for Authority for Deferred Accounting. (Staff Analysts: Dave Jacobson, Terri LaBrie Baker, Jon Thurber, Staff Attorney: Karen Cremer)
Mr. Dave Gerdes, attorney for Montana-Dakota, stated their request was for the same purpose as Otter Tail Power Company. Ms. Terri LaBrie Baker, Staff Analyst, stated Commission Staff would recommend approval with the same conditions as found in EL009-024. Mr. Don Ball of Montana-Dakota stated the portion owed by South Dakota would be approximately 6 percent of the total amount or $960,000.00.
Commissioner Hanson moved to approve the deferred billing with the conditions set forth by staff. Motion passed 3-0
Mr. Jeff Decker of NorthWestern Energy stated approximately two miles of single-phase line needs to be upgraded with a three-phase line to adequately meet the needs of a customer. The customer has agreed to pay part of the cost of this upgrade. Mr. Decker stated NorthWestern is seeking approval to bill the customer for the actual unsupported cost of the project, which amounts to $17,000.00. Mr. Dave Jacobson, Staff Analyst, stated the reason for the filing is due to NorthWestern lack of a line extension tariff. Mr. Jacobson stated there is a potential benefit to other customers and the amount to be charged to the customer takes that into account. Staff recommended approval of the contract with deviations and the tariff revision. Mr. Jacobson stated extraordinary extensions such as this are rare, but as prices have escalated over the years and bigger customers are realized, the Commission will see more of these types of filings. At the time of the next rate case, some type of line extension policy could be addressed.
Vice Chairman Steve Kolbeck moved to approve the contract with deviations and tariff revision. Motion passed 3-0.
Mr. Jim Alders of Xcel Energy (Xcel) stated Xcel proposed to establish a program to sell renewable energy credits back into the market, which are associated with energy South Dakota customers have purchased. The revenue generated from the program will be returned to the customers through the fuel clause. South Dakotans used 250,000 megawatt hours of renewable energy credits in 2008/09, in the coming years this amount will increase to approximately 400,000. A secondary market is developing for renewable energy credits and Xcel proposes to establish a program to explore whether or not renewable energy credits can be sold into the secondary market, in order to sell the excess credits above what is needed for compliance. Mr. Brian Rounds, Staff Analyst, stated Commission Staff agrees that RECs should be sold to bring down ratepayer costs. Commission Staff disagrees with Xcel that Renewable Recycled and Conserved Energy Object (RRCEO) requires the retirement of RECs in 2015. Retiring RECs is never as cost effective as selling them. Commission Staff does not believe that 15 percent of revenues are a necessary incentive for Xcel to sell its RECs at a fair market price. Commission Staff recommended that Xcel sell the RECs in a prudent manner returning all or 100 percent of proceeds minus marketing expenses, to ratepayers through the fuel clause. Commission Staff would also recommended that Xcel include information regarding REC sales in their annual RRCEO report and the Commission request updated tariff sheets to reflect those changes.
Chairman Johnson moved Xcel credit its customers 90 percent of the South Dakota state jurisdictional share of the net revenue generated by the sale of RECs. Motion passed 2-1 (Hanson dissented).
1. OC09-005 In the Matter of the Complaint filed by Nustar Pipeline Operating Partnership, LP, Wichita, Kansas, against Loewenberg Technologies, Sioux Falls, South Dakota. (Staff Attorney: Kara Semmler)
Ms. Kara Semmler for the One-Call Board provided a complaint background. Ms. Semmler read an e-mail submitted to her from Mr. Loewenberg, which stated he felt they were not in the wrong, were not using the One-Call system and should not be liable. The e-mail went on to say he was not paying the fine. Ms. Semmler stated the company is no longer using the One-Call system because they are no longer excavating.
Chairman Johnson moved the Commission pursue enforcement. Motion passed 3-0
2. TC09-083 In the Matter of the Application of WideVoice Communications, Inc. for a Certificate of Authority to Provide Interexchange Telecommunications Services and Local Exchange Services in South Dakota. (Staff Analyst: Dave Jacobson, Staff Attorney: Kara Semmler)
Ms. Kara Semmler, Staff Attorney, stated WideVoice wishes to withdraw their application and staff has no objections. Ms. Margo Northrup representing the Intervenors stated they have no objection to the withdrawal of the application.
Vice Chairman Kolbeck moved to grant the withdrawal of the application and close the docket. Motion passed 3-0
3. TC10-001 In the Matter of the Application of IntelePeer, Inc. for a Certificate of Authority to Provide Interexchange Telecommunications Services and Local Exchange Services in South Dakota. (Staff Analyst: Terri LaBrie Baker, Staff Attorney: Kara Semmler)
Ms. Margo Northrup, representing South Dakota Telephone Association (SDTA), stated based on the representations that have been made that IntelePeer does not plan to provide services in non-Qwest areas; SDTA is willing to withdraw its petition for intervention. No Commission action required on withdrawal of petition. Ms. Terri LaBrie Baker, Staff Analyst, stated Commission Staff recommended granting a certificate of authority, subject to the condition that IntelePeer not offer any prepaid services (including prepaid calling cards) and not accept or require any deposits or advance payments without prior approval of the Commission, and subject to rural safeguards.
Commissioner Hanson moved that the Commission grant the COA with the conditions recommended by staff. Motion passed 3-0.
4. TC10-003 In the Matter of the Application of Broadview Networks Inc. for a Certificate of Authority to Provide Interexchange Telecommunications Services and Local Exchange Services in South Dakota. (Staff Analyst: Dave Jacobson, Staff Attorney: Karen Cremer)
Ms. Margo Northrup, representing South Dakota Telephone Association (SDTA), stated based on the representations that have been made that Broadview does not plan to provide services in non-Qwest areas; SDTA is willing to withdraw its petition for intervention. Chairman Johnson stated no Commission action required on withdrawal of petition.
ADDENDUM TO THE
AGENDA OF COMMISSION MEETING
1. NG10-001 In the Matter of the Filing by Montana Dakota Utilities Co. for Approval for a Variance of its Purchased Gas Cost Adjustment Rate 88 and Associated Tariff Revisions. (Staff Analyst: Dave Jacobson, Staff Attorney: Kara Semmler)
Mr. Don Ball, representing MDU, provided a background on the reason for the filing as stated above. Mr. Dave Jacobson, Staff Analyst, stated Commission Staff received follow-up work papers since the last true-up and recommended approval of the filing.
Vice Chairman Kolbeck moved to approve the tariff variance and associated tariff sheet. Motion passed 3-0
1. TC08-031 In the Matter of the Complaint filed by Kennebec Telephone Company, Inc., against Alltel Communications, Inc. Regarding Nonpayment of Transiting Charges. (Staff Analyst: David Jacobson, Staff Attorney: Kara Semmler)
A transcript of this docket can be found on the PUC website at: http://puc.sd.gov/commission/dockets/telecom/2008/tc08-031/020910.pdf
Vice Chairman Kolbeck moved to deny the Motion for Summary Judgment of Dismissal for Lack of Subject Matter Jurisdiction. Motion passed 3-0
There being no further business, at the hour of 4:20 P.m., the South Dakota Public Utilities Commission Meeting adjourned. The next Commission meeting is scheduled for February 23, 2010.
March 23, 2010