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South Dakota Public Utilities Commission Meeting
February 28, 2023, at 1:30 P.M. CST
Matthew Training Center, Foss Building
Pierre, South Dakota

NOTE:  Docket participants who wish to join this meeting by conference call should contact the Commission at 605-773-3201 by 5:00 p.m. CST on Monday, February 27, 2023, to reserve a phone line. Lines are limited and assigned on a first come, first served basis, subject to possible reassignment to accommodate persons who must appear in a proceeding. Ultimately, if you wish to participate in docket discussion at the Commission Meeting and a line is not available, you may have to appear in person. 

NOTE:  To listen to the Commission Meeting live please go to the PUC’s website www.puc.sd.gov and click on the LIVE link on the home page. The Commission requests persons who will only be listening to proceedings and not actively appearing in a case listen via the webcast to free phone lines for those who have to appear.  The Commission meetings are archived on the PUC’s website under the Commission Actions tab. Click on “Commission Meeting Archives,” to access the recordings.

NOTE: Notice is further given to persons with disabilities that this Commission meeting is being held in a physically accessible place. If you have special needs, please notify the Commission and we will make all necessary arrangements.

AGENDA OF COMMISSION MEETING

Administration

1.      Approval of the Minutes of the Commission Meeting Held on February 9, 2023 (Deputy Executive Director: Leah Mohr)

Consumer Reports

1.      Status Report on Consumer Utility Inquiries (Consumer Affairs: Deb Gregg)

Electric

1.      EL23-002        In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of its Power Plant Study Costs Regulatory Asset (Staff Analyst: Patrick Steffensen; Staff Attorney: Amanda Reiss)

         On February 8, 2023, the Commission received a filing from NorthWestern Corporation dba NorthWestern Energy (NorthWestern) for approval of deferred accounting treatment and the creation of a regulatory asset for the purpose of accumulating the financial costs of a study regarding NorthWestern’s participation in a potential nuclear plant in South Dakota. NorthWestern asks that costs paid beginning on March 1, 2023, be included in this determination and has provided an estimate of those costs. The costs will be accumulated and held in the regulatory asset for consideration in a future rate filing.

         TODAY, shall the Commission grant NorthWestern Energy’s request for deferred accounting treatment of costs associated with the nuclear plant study and the creation of an associated regulatory asset for costs paid beginning March 1, 2023?

2.      EL23-003        In the Matter of the Filing by MidAmerican Energy Company for Approval of Tariff Revisions regarding Its 2022 Transmission Cost Recovery Reconciliation and 2023 Transmission Cost Recovery Factors (Staff Analyst: Eric Paulson; Staff Attorney: Amanda Reiss)

         On February 15, 2023, the Commission received MidAmerican Energy Company’s (MidAmerican) filing for approval of tariff revisions regarding its Transmission Cost Recovery (TCR) 2022 Reconciliation and 2023 New Factor Calculation. MidAmerican’s TCR mechanism was established in the company’s most recent rate case, EL14-072. With this filing, MidAmerican is establishing new TCR rates based on true ups to the actual over/under recovery from 2022, 2023 forecasted MISO transmission expense and the forecast over/under recovery for January through March of 2023. MidAmerican requests the new TCR factors have an effective date of March 31, 2023.

         TODAY, shall the Commission assess a filing fee in the amount of up to $50,000 to account for actual expenses incurred in review of this filing commencing from the filing date?

Hydrocarbon and Carbon Dioxide Pipeline

1.      HP22-002        In the Matter of the Application of Navigator Heartland Greenway, LLC for a Permit Under The South Dakota Energy Conversion and Transmission Facilities Act to Construct the Heartland Greenway Pipeline in South Dakota (Staff Analysts: Darren Kearney, Jon Thurber; Staff Attorney: Kristen Edwards)

            On September 27, 2022, the Commission received an Application for a Permit under the South Dakota Energy Conversion and Transmission Facilities Act to Construct the Heartland Greenway Pipeline in South Dakota (Application) from Navigator Heartland Greenway, LLC, a limited liability company owned by Navigator CO2 Ventures LLC (Navigator or Applicant). Applicant proposes to construct and operate a carbon dioxide (CO2) transmission pipeline (Project). The Project is approximately 1,300 miles of pipelines for the transportation of CO2 from more than 21 ethanol and fertilizer plants across five states, including three ethanol plants in South Dakota, that will transport captured carbon dioxide for permanent and secure underground sequestration in Illinois and/or to off-take facilities for commercial/industrial use. The Project consists of 111.9 miles of carbon dioxide pipeline in South Dakota that will cross the counties of Brookings, Moody, Minnehaha, Lincoln, and Turner. On November 21 and 22, 2022, the Commission held public input meetings in Canton, Flandreau and Sioux Falls. Party status has been granted to numerous individuals and entities. On February 9th, 2023, the Commission considered and denied Landowners’ Motion to Return Application and directed all parties to consider alternative hearing dates. On February 16, 2023, Applicant filed a Motion for Protective Order. On February 17, 2023, Intervenors filed a Motion to Amend the Procedural Schedule. On February 21, 2023, Joyce Swanson filed a Request to Withdraw as an Intervenor. On February 21, 2022, Staff filed a Motion to Amend Procedural Schedule.

            TODAY, shall the Commission grant Joyce Swanson’s Request to Withdraw as an Intervenor? AND shall the Commission grant Staff’s Motion to Amend Procedural Schedule? AND shall the Commission grant Applicant’s Motion for Protective Order? OR how shall the Commission proceed?

Natural Gas

1.      NG22-011       In the Matter of the Filing by Montana-Dakota Utilities Co., a Subsidiary of MDU Resources Group Inc., for Approval of Authority to Establish North Deadwood Expansion Area Surcharge Rate 75 (Staff Analyst: Brittany Mehlhaff; Staff Attorney: Kristen Edwards)

         On November 18, 2022, Montana-Dakota Utilities Co., a Subsidiary of MDU Resources Group Inc. (MDU), filed for approval of authority to establish a new rate schedule, North Deadwood Expansion Area Surcharge Rate 75 (Rate 75). MDU proposes this new rate schedule to accommodate the recovery of costs associated with the construction of a new town border station near Deadwood, South Dakota, to allow extension to a new development referred to as “the Ridge.” MDU proposes to utilize an available provision under Rate 120, the Incremental Expansion Surcharge, for the recovery of the town border station costs. This provision allows for MDU to offer an incremental surcharge to groups of customers when the total estimated cost would otherwise be prohibitive under MDU’s present rates and gas service extension policy. MDU is proposing Rate 75, whereby customers would be charged a minimum upfront payment and a flat Expansion Charge of $5.00 per month and a volumetric Expansion Commodity Charge of $4.00 per Dk, in addition to the rates charged customers under the rate schedule applicable to each customer’s natural gas service. MDU states the town border station project and surcharge will be reviewed annually to determine if sufficient customers and natural gas load have initiated service to ensure complete recovery of the town border station by the anticipated end date of the surcharge, which MDU is projecting to be November 2034. On January 20, 2023, MDU filed an updated rate schedule to clarify the party responsible for payment of the initial down payment and that of the ongoing monthly charges once service has been established.

         TODAY, shall the Commission approve Montana-Dakota Utilities Company’s request for authority to establish the New Deadwood Expansion Area Surcharge Rate 75, and associated tariff revisions, with an effective date of March 1, 2023?

2.      NG23-002       In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of a Contract with Deviations with Brookings Biogas LLC (Staff Analyst: Joseph Rezac; Staff Attorney: Amanda Reiss)

         On January 20, 2023, NorthWestern Corporation dba NorthWestern Energy (NorthWestern) filed for approval of a contract with deviations with Brookings Biogas, LLC (Customer). The Customer intends to deliver renewable natural gas (RNG) produced to NorthWestern for the purpose of transportation. RNG will be transported via a customer-owned and operated pipeline from two dairy facilities. The Agreement includes provisions to secure project costs and guaranteed delivery volumes to support the project recovery over a 15-year period.

         TODAY, shall the Commission approve NorthWestern Energy’s contract with deviations with Brookings Biogas, LLC and the associated tariff revisions with an effective date of March 1, 2023?

3.      NG23-003       In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of a Contract with Deviations with Hamlin RNG LLC (Staff Analyst: Eric Paulson; Staff Attorney: Amanda Reiss)

         On January 26, 2023, the Commission received a filing from NorthWestern Corporation dba NorthWestern Energy (NorthWestern) for approval of a contract with deviations with Hamlin RNG LLC (Customer). The Customer desires to have NorthWestern install a natural gas pipeline that is approximately 300 feet in length and associated facilities. This pipeline will be used to transport renewable natural gas from the dairy farm at which it is being produced, to an interconnection point west of Bryant, South Dakota. NorthWestern states that based on the cost of the project, it requires fixed monthly charge, take or pay volumes, and a security for the capital investment cost in order to protect its legacy customers. NorthWestern has also included natural gas quality standards the Customer must achieve to have gas transported in the pipeline. The contract includes recovery of the pipeline project costs over a 15-year period and project costs will be recovered through a fixed monthly charge. An annual review will be conducted to determine if volumes have met the required take or pay amount. All volume charges will be billed at the tariff rate 87.

         TODAY, shall the Commission approve NorthWestern Energy’s contract with deviations with Hamlin RNG LLC and the associated tariff revisions with an effective date of March 15, 2023?

4.      NG23-005       In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of a Contract with Deviations with Dakota Protein Solutions, LLC (Staff Analyst: Eric Paulson; Staff Attorney: Amanda Reiss)

         On January 30, 2023, the Commission received a filing from NorthWestern Corporation dba NorthWestern Energy (NorthWestern) for approval of a contract with deviations with Dakota Protein Solutions, LLC (Customer). The Customer desires to have natural gas service extended to property it is developing for a rendering facility near Freeman, South Dakota. NorthWestern will be installing approximately 16,335 feet of plastic gas line. Based on the cost of the project, NorthWestern requires security for the capital investment cost, a monthly surcharge in order to protect its legacy customers and take-or-pay volumes. The agreement with the Customer includes recovery of the pipeline project costs over a 15-year period. Project costs and tariff delivery charges will be recovered through tariff rates and a fixed monthly surcharge. NorthWestern proposes an effective date of March 15, 2023.

         TODAY, shall the Commission approve NorthWestern Energy’s contract with deviations with Dakota Protein Solutions, LLC and the associated tariff revisions with an effective date of March 15, 2023?

5.      NG23-006       In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of a Contract with Deviations with POET Biorefining - Chancellor, LLC (Staff Analyst: Joseph Rezac; Staff Attorney: Amanda Reiss)

         On February 15, 2023, NorthWestern Corporation dba NorthWestern Energy (NorthWestern) filed for approval of a contract with deviations with POET Biorefining – Chancellor, LLC (Customer). The Customer’s current contract with deviations for natural gas transportation service expires February 28, 2023. The original contract with this Customer expired in 2018. At that time, a five-year renewal agreement was approved for service at a deviated rate through February 28, 2023.

         TODAY, shall the Commission approve NorthWestern Energy’s contract with deviations with POET Biorefining – Chancellor, LLC and the associated tariff revisions with an effective date of March 1, 2023, on less than 30 days’ notice?

6.      NG23-007       In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of a Contract with Deviations with NuGen Energy, LLC (Staff Analyst: Joseph Rezac; Staff Attorney: Amanda Reiss)

         On February 15, 2023, NorthWestern Corporation dba NorthWestern Energy (NorthWestern) filed for approval of a contract with deviations with NuGen Energy, LLC (Customer). The Customer’s current contract with deviations for natural gas transportation service expires February 28, 2023. The original contract with this Customer expired in 2018. At that time, a five-year renewal agreement was approved for service at a deviated rate through February 28, 2023.

         TODAY, shall the Commission approve NorthWestern Energy’s contract with deviations with NuGen Energy, LLC and the associated tariff revisions with an effective date of March 1, 2023, on less than 30 days’ notice?

Items for Commission Discussion

Public Comment

Individuals who wish to make public comments to the commission may do so during this time. All who offer public comments are requested to sign in at the commission meeting or let the commission know of their wish to speak when they call in to reserve a phone line. Time limits for comments may be determined at the discretion of the commission.

Announcements

1.   PUC commissioners and staff will meet with consumers at the Sioux Empire Home Show, February 24-26, 2023, at the Sioux Falls Convention Center & Arena, Sioux Falls, South Dakota.

2.   The next regular commission meeting will be Tuesday, March 14, 2023, at 9:30 a.m. CDT in Room 413 at the State Capitol Building, Pierre, South Dakota.

3.   Commission meetings are scheduled March 28 and April 13, 2023.

 

  /s/ Cindy Kemnitz                 .
Cindy Kemnitz
Finance Manager
puc@state.sd.us
February 21, 2023