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South Dakota Public Utilities Commission Meeting
December 3, 2013, at 9:30 A.M. CST
Room 413, Capitol Building
Pierre, South Dakota

MINUTES OF THE COMMISSION MEETING

Chairman Gary Hanson called the meeting to order. Present were: Commissioners: Chris Nelson and Kristie Fiegen; Commission Counsel: John Smith and Rolayne Wiest; Commission Advisor: Greg Rislov; Staff Attorneys: Karen Cremer and Kristen Edwards; Staff Analysts: Brian Rounds, Darren Kearney, Robin Meyerink, Eric Paulson, Brittany Mehlhaff, David Henry, and Patrick Steffensen; Consumer Affairs Supervisor: Deb Gregg; and Staff: Joy Lashley

Also present were:
Brett Koenecke, May, Adam, Gerdes & Thompson, representing Montana-Dakota Utilities Co.; Darla Rogers, Riter, Rogers, Wattier, and Northrup LLP, representing Venture Communications Cooperative and West River Telecommunications Cooperative; Daniel Doyle Cutler & Donahoe LLP, representing Midstate Communications, Inc. and Midstate Telecom, Inc.; Fay Jandreau, Midstate Communications, Inc. and Midstate Telecom, Inc.; Kari Valley and Jim Wilcox, Northern States Power Company dba Xcel Energy; and Mark Shlanta and Bill Heaston, SDN Communications

Joining the meeting by telephone were:
Tamie Aberle and Rita Mulkern, Montana-Dakota Utilities Co.; Jeff Decker, NorthWestern Corporation, dba NorthWestern Energy; Paul Lehman, Emily Smith, Deb Paulson, Tom Kramer, and Michelle Terwilliger, Northern States Power Company dba Xcel Energy; Kim Pederson and Jason Grenier, Otter Tail Power Company; Basil Copeland, Chesapeake Regulatory Consultants Inc., representing SD Public Utilities Commission Staff; Mary Sisak, Blooston, Mordkofsky, Dickens, Duffy & Pendergast, representing Brookings Municipal Telephone; Jim Adkins, Steve Meyer, and Laura Julius, Brookings Municipal Telephone; Bruce Hanson, Fort Randall Telephone Company; Donna Thiel, Red River Rural Telephone Association; Bruce Schoonover, Knology Community Telephone, Inc.; and Mary Jo Biegler, Valley Telephone Company

(NOTE: For the purpose of continuity, these minutes are not necessarily in chronological order.)

Consumer Reports

1.     Status Report on Consumer Utility Inquiries and Complaints Received by the Commission (Consumer Affairs: Deb Gregg)

The Commission received a total of 25 contacts since the last report was prepared for the November 22, 2013 Commission meeting.

4 of the contacts involved telecommunication services, 4 of the contacts involved electrical services, 2 of the contacts involved natural gas service, 5 contacts involved cell phone service, 6 contacts were related to the Do Not Call Registry, and 4 contacts were related to issues not regulated by the PUC.

1,715 of the 1,738 complaints received in 2013 have been resolved.

Electric

1.     EL12-046     In the Matter of the Application of Northern States Power Company dba Xcel Energy for Authority to Increase its Electric Rates (Staff Analysts: Brittany Mehlhaff, Patrick Steffensen; Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding Docket EL12-046. An audio of the discussion can be found on the PUC Web site under Commission Actions; Commission Meeting Archives; 2013; December 3, 2013, for Docket EL12-046, recording located at:
http://puc.sd.gov/commission/media/2013/puc12032013.mp3.

     Commissioner Nelson moved to approve the Infrastructure Rider Annual Compliance Filing and Update effective for service rendered on and after January 1, 2014, subject to the cost and allocator true-ups recommended by Staff, and also with the Monticello plant upgrade costs subject to prudency review and true-up at such time as the MPSC study has been completed and made available for review.  Motion carried 3-0.

2.     EL13-006     In the Matter of the Petition of Northern States Power Company dba Xcel Energy for Approval of its 2013 Transmission Cost Recovery Eligibility and Rate Adjustment (Staff Analyst: Brittany Mehlhaff; Staff Attorney: Karen Cremer)

Ms. Kari Valley, Northern States Power Company dba Xcel Energy (Xcel), asked that the Commission grant the Joint Motion for Approval of Settlement Stipulation and approve the terms and conditions stipulated therein. Ms. Karen Cremer, staff attorney, recommended that the Commission grant the Joint Motion and adopt the Settlement Stipulation without modification.

     Commissioner Fiegen moved to grant the Joint Motion for Approval of Settlement Stipulation and approve the terms and conditions stipulated therein. Motion carried 3-0.

3.     EL13-016     In the Matter of the Filing by Otter Tail Power Company Regarding its Proposed South Dakota Energy Efficiency Plan for 2014-2015 (Staff Analysts: Brian Rounds, Darren Kearney; Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding Docket EL13-016. An audio of the discussion can be found on the PUC Web site under Commission Actions; Commission Meeting Archives; 2013; December 3, 2013, for Docket EL13-016, recording located at:
http://puc.sd.gov/commission/media/2013/puc12032013.mp3.

     Commissioner Nelson moved to reconsider EL13-016 to the extent that it deals with the 30% budget excess issue. Motion carried 3-0.

     Commissioner Nelson moved to amend the approval by changing the 30% allowance to 10%. Motion carried 2-1. Commissioner Hanson dissented.

4.     EL13-033     In the Matter of the Filing by NorthWestern Corporation, dba NorthWestern Energy for Approval of a Contract with Deviations (Staff Analyst: Robin Meyerink; Staff Attorney: Karen Cremer)

Mr. Jeff Decker, NorthWestern Corporation, dba NorthWestern Energy (NorthWestern), asked that the Commission approve its Contract with Deviations on less than 30 days' notice with a November 25, 2013, effective date. Mr. Decker stated that the proposed of the contract would extend three-phase electric distribution service to an irrigation site with the customer paying the actual project costs. Ms. Robin Meyerink, staff analyst, recommended that the Commission grant NorthWestern's request with an effective date of November 25, 2013, and that it be approved on less than 30 days' notice.

     Commissioner Nelson moved to approve the Contract with Deviations on less than 30 days' notice effective November 25, 2013. Motion carried 3-0.

Natural Gas

1.     NG12-008       In the Matter of the Application of Montana-Dakota Utilities Co. for Authority to Increase its Natural Gas Rates (Staff Analysts: Brittany Mehlhaff, Patrick Steffensen; Staff Attorney: Kristen Edwards)

A lengthy discussion took place regarding Docket NG12-008. An audio of the discussion can be found on the PUC Web site under Commission Actions; Commission Meeting Archives; 2013; December 3, 2013, for Docket NG12-008, recording located at:
http://puc.sd.gov/commission/media/2013/puc12032013.mp3.
 
     Commissioner Nelson moved that MDU shall employ the refund methodology approved for Black Hills Power set forth in Settlement Stipulation Exhibit 3 in Docket EL12-061, with interest at the rate of 7 percent. Motion carried 3-0.

Telecommunications

1.     In the Matter of the Request for Certification Regarding the Use of Federal Universal Service Support in Dockets TC13-063, TC13-065, TC13-074, TC13-088, TC13-092, TC13-101, and TC13-103.

     TC13-063     In the Matter of the Request of Valley Telephone Company for Certification Regarding its Use of Federal Universal Service Support (Staff Analyst: Patrick Steffensen; Staff Attorney: Karen Cremer)

Mr. Patrick Steffensen, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Valley Telephone Company is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-065     In the Matter of the Filing by Red River Rural Telephone Association for Certification regarding its Use of Federal Universal Service Support (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Mr. Eric Paulson, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Red River Rural Telephone Association is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-074     In the Matter of the Request of Fort Randall Telephone Company for Certification Regarding its Use of Federal Universal Service Support (Staff Analyst: Patrick Steffensen; Staff Attorney: Karen Cremer)

Mr. Patrick Steffensen, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Fort Randall Telephone Company is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-088     In the Matter of the Filing by West River Telecommunications Cooperative (Mobridge) for Certification regarding its Use of Federal Universal Service Support (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Mr. Eric Paulson, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that West River Telecommunications Cooperative is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-092     In the Matter of the Request of Knology Community Telephone, Inc. for Certification Regarding its Use of Federal Universal Service Support (Staff Analyst: Darren Kearney; Staff Attorney: Kristen Edwards)

Mr. Darren Kearney, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Knology Community Telephone, Inc. is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-101     In the Matter of the Filing by Venture Communications Cooperative for Certification regarding its Use of Federal Universal Service Support (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Mr. Eric Paulson, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Venture Communications Cooperative is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     TC13-103     In the Matter of the Filing by Brookings Municipal Telephone dba Swiftel Communications for Certification regarding its Use of Federal Universal Service Support (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Mr. Eric Paulson, staff analyst, recommended that the Commission issue certification to the FCC and USAC indicating that Brookings Municipal Telephone dba Swiftel Communications is in compliance with 47 U.S.C. Section 254(e) and should receive all federal universal service support determined for distribution to the company.

     Commissioner Fiegen moved to provide a certification to the Federal Communications Commission and to the Universal Service Administration Company regarding the use of Federal Universal Service Support in each of the above dockets. Motion carried 3-0.

2.     TC13-115     In the Matter of the Filing by XO Communications Services, Inc. for Approval of Revisions to its Access Services Tariff No. 2 (VoIP) (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Ms. Kristen Edwards, staff attorney, recommended that the Commission grant XO Communications Services, Inc.'s request to withdraw its tariff filing.

     Commissioner Fiegen moved to approve the withdrawal of the tariff filing. Motion carried 3-0.

3.     TC13-118     In the Matter of the Joint Application for Approval of an Amendment to the Certificate of Authority of Midstate Communications, Inc. and for Waiver of Certain Requirements of ARSD 20:10:32:03 (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Mr. Dan Doyle, representing Midstate Communications, Inc. and Midstate Telecom, Inc., requested that the Commission approve its amendment to the COA of Midstate Telecom, Inc. to permit Midstate Communications, Inc. to operate as the competitive local exchange carrier. Mr. Doyle also stated that the amendment comes with the prospective merger of Midstate Telecom, Inc. into Midstate Communications, Inc. Mr. Eric Paulson, staff analyst, recommended that the Commission grant waivers of (6), (7), (8)(c), (10), (13), (14), (15), (18), (19), (20) and (22), and approve Midstate Telecom, Inc.'s amended Certificates of Authority and its transfer to Midstate Communications, Inc. and waive Midstate Telecom, Inc.'s surety bond requirement.

     Commissioner Nelson moved to grant the waivers of ARSD 20:10:32:03: (6), (7), (8)(c), (10), (13), (14), (15), (18), (19), (20) and (22) and approve Midstate Telecom, Inc.'s amended Certificates of Authority and its transfer to Midstate Communications, Inc. and waive Midstate Telecom, Inc.'s surety indemnity bond requirement. Motion carried 3-0.

Items for Commission Discussion

Commission Counsel, Mr. John Smith, explained his memorandum regarding the relationship between the Commission's rulemaking authority and FERC's under the Public Utility Regulatory Policies Act of 1978, as amended (PUPRA). Commissioner Nelson explained his reasons for requesting a discussion item regarding repeal of the Commission's master metering rules found in ARSD Chapter 20:10:26. First, the rules constitute an unnecessary intrusion of government into the affairs of private businesses. The rules also cause needless red tape, time wasting, and inconvenience for buildings owners of having to come before the Commission for approval to have single metered service for multi-tenant buildings as Lloyd Properties recently had to do. Commission Fiegen expressed her opinion that it is not fair to tenants to base individual tenant utility charges on what all of the tenants have consumed as opposed to the individual tenant's own use. Commissioner Hanson stated that as a former property owner of a master metered building, he feels that it's both unfair to charge a tenant for other tenants' use regardless of the tenant's care taken to keep energy use to a reasonable level and other tenants' wasteful usage. He also stated that he is a firm believer in energy efficiency and conservation and that it is important to incentivize tenants to reasonable with their energy use. He stated that he has personally observed very wasteful conduct by master-metered tenants, such as having window open in cold or hot weather. Commissioner Nelson replied that free enterprise is the better option and that a tenant doesn't need to sign a lease with mastered metered building but should be free to choose. Commissioner Fiegen stated that for her, it's a fairness issue. Jim Wilcox of Xcel Energy stated that individual metering has two beneficial aspects - energy conservation and fairness to tenants. It isn't just other tenants that can cause unfairness under a master metered system, but also landlord overcharging. He also stated that the rules can and do place utilities in a difficult position, almost in the position of an enforcer of the regulations and can create conflict with developers. Mr. Smith provided a more detailed description of the PURPA master metering standard and what the Commission is to do in considering the standard. No motion was made to initiate a rule making.

There being no further business, at the hour of 11:05 a.m. the South Dakota Public Utilities Commission meeting adjourned.

/S/Joy Lashley
Joy Lashley
Administrative Assistant
puc@state.sd.us
December 3, 2013