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PUBLIC UTILITIES COMMISSION MEETING
July 15, 1997; 1:00 P.M.
State Capitol Building, Room 412
Pierre, South Dakota
MINUTES OF THE COMMISSION MEETING
Chairman Burg called the meeting to order at 1:00 p.m. Present were Commissioner Laska Schoenfelder, Commissioner Pam Nelson, Executive Director Bill Bullard, General Counsel Rolayne Ailts Wiest, Staff Attorneys Karen Cremer and Camron Hoseck, Fixed Utilities Division Director Greg Rislov, Telecommunications Analyst Harlan Best, Utility Analysts Bob Knadle, Dave Jacobson, Steve Wegman and Tammi Stangohr, Engineer Martin Bettmann, Business Manager Sue Cichos, Consumer Representative Leni Healy, Legal Intern Tricia Zimmer and Administrative Secretary Shirleen Fugitt.
Also present were Bob Miller, South Dakota Electric Utilities; Rich Coit, SDITC; Jim Wilcox, NSP; Jon Lehner and Colleen Sevold, U S WEST; Bob Mercer, Rapid City Journal; John Lovald, AT&T; and Brian Meyer, Independent Company Acquisition Agreement (ICAA).
Joining the meeting by phone were Mike Bradley and Bruce Hanson, Ft. Randall Telephone; Glenn Solomon, Rick Wolters, Loren Hiatt and Michele Engel, AT&T; Mary Lohnes and Tom Simmons, Midco Communications; Robert Marmet, DCT; Bill Heaston, U S WEST; Alice Walker, Cheyenne River Sioux Tribe; Darrell Henderson, Stateline Communications; and Karen Huizenga, MidAmerican Energy.
Administration
1. Approval Of The Minutes Of The Commission Meeting Held On June 24, 1997. (Staff: Shirleen Fugitt.)
Commissioner Nelson moved to approve the minutes of the June 24, 1997, Commission Meeting. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Consumer Affairs
1. Status Report On Consumer Utility Inquiries And Complaints Recently Received By The Commission. (Consumer Representative: Leni Healy.)
Ms. Healy presented an update on inquiries and complaints received since the last Commission meeting.
Natural Gas
Mr. Itterman explained his complaint against MidAmerican Energy regarding a billing. Karen Huizenga, MidAmerican Energy, addressed the bill. Ms. Healy recommended finding probable cause. Ms. Wiest recommended finding probable cause.
Chairman Burg moved to find probable cause. Commissioner Nelson seconded and Commissioner Schoenfelder concurred. Motion passed 3-0.
Ms. Healy explained the complaint and recommended finding probable cause. Karen Huizenga, MidAmerican Energy, addressed the complaint. Ms. Wiest recommended finding no probable cause.
Commissioner Schoenfelder moved to find no probable cause. Chairman Burg seconded and Commissioner Nelson concurred. Motion passed 3-0.
Electricity
1. EL96-008 IN THE MATTER OF THE APPLICATION OF ARNOLD MURRAY CONSTRUCTION, SIOUX FALLS, SD, FOR A MASTER METERING VARIANCE REQUEST FOR SANDLOT APARTMENTS. (Staff Analyst: Steve Wegman. Staff Attorney: Camron Hoseck.)
Mr. Wegman explained the application and recommended denial.
Chairman Burg moved to deny the application and close the docket. Commissioner Schoenfelder seconded and Commissioner Nelson concurred. Motion passed 3-0.
Jim Wilcox, Northern States Power, explained that the complaint has been resolved. Ms. Cremer recommended dismissal of the complaint and closure of the docket.
Commissioner Nelson moved to dismiss the complaint and close the docket. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
John Byre explained his complaint against Northern States Power regarding a bill. Mr. Hoseck recommended finding no probable cause and that the matter be dismissed on jurisdictional grounds.
Chairman Burg moved to find probable cause. Commissioner Nelson seconded and Commissioner Schoenfelder concurred. Motion passed 3-0.
4. EL97-009 IN THE MATTER OF THE COMPLAINT FILED BY JAMES AND MARY BETH MOSS, SIOUX FALLS, SD AGAINST NORTHERN STATES POWER COMPANY REGARDING A BILL . (Consumer Representative: Leni Healy. Staff Attorney: Camron Hoseck.)
Jim Wilcox, NSP, explained that the complainants have moved away from the area leaving a balance due on their account. Mr. Hoseck recommended finding probable cause.
Commissioner Nelson moved to dismiss the complaint and close the docket. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Telecommunications
1. TC94-122 IN THE MATTER OF THE SALE OF CERTAIN TELEPHONE EXCHANGES BY U S WEST COMMUNICATIONS, INC. TO CERTAIN TELECOMMUNICATIONS COMPANIES IN SOUTH DAKOTA. (Staff Attorney: Camron Hoseck.)
Commissioner Schoenfelder made the following motions and comments:
Pursuant to the decision of the Circuit Court which remanded this case on the record, I move that the Commission delete the following Findings of Fact: 16, 17, 21, and 23. I further move that Finding of Fact 22 should be modified by deleting the last sentence and in its place submitting the following sentence: The position of CRSTTA creates conflict and, at a minimum, uncertainty as to the taxability of CRSTTA.
I further move that Conclusion of Law 3 should be deleted.
Pursuant to the Circuit Court's decision to make findings on all of the statutory criteria in 49-31-59, I move that the Commission enter new Findings of Fact on the following issues:
1. Under the factor of protection of the public interest, I move that the Commission find that the sale of the McIntosh Exchange to CRSTTA would be contrary to the public interest. This finding should be based on the lack of property tax revenue and the uncertainty of any replacement tax. This finding should also be based on the lack of regulatory protections and the lack of the ability to vote or have a political voice in CRSTTA..
2. With respect to the factor of the adequacy of local telephone service, I move that the Commission make findings reflecting the following: That CRSTTA currently provides adequate service to its present customers. However, the Commission should also find that unlike the other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA offer, at a minimum, all existing services currently offered by U S WEST in the McIntosh Exchange. Further, unlike other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA honor all existing U S WEST contracts, commitments, leases, licenses, and other agreements which relate to, arise from, or are used for the operation of the purchased exchange. In addition, in order to ensure continued adequacy of local telephone service to the McIntosh Exchange, the Commission should find that the lack of regulatory control and a lack of ability to vote or have a political voice in CRSTTA could negatively affect adequacy of service.
3. With respect to the factor of reasonableness of rates for local service, I move that the Commission make findings reflecting the following: CRSTTA states that it would charge the same rates that U S WEST currently charges. However, unlike other sales approved by the Commission, the Commission is unable to require as a condition of the sale that CRSTTA not increase current local rates for 18 months.
4. On the factor of the provisioning of 911, enhanced 911, and other public safety services, I move that the Commission make findings reflecting the following: That CRSTTA offers free firebar service to volunteer fire departments in communities it currently serves. It currently does not offer 911 or E911 service because the counties have not yet authorized the collection of taxes for 911.
5. With respect to the factor concerning the ability of the local exchange company to provide modern, state-of-the-art telecommunications services that will help promote economic development, telemedicine, and distance learning in rural South Dakota, I move that the Commission enter findings reflecting the following: That CRSTTA has the ability to provide modern state-of-the-art telecommunications service. That CRSTTA has no plans to change existing Extended Area Service. However, unlike other sales, the Commission is unable to require as a condition of the sale that CRSTTA not change any current EAS arrangements without prior approval by the Commission. In addition, since CRSTTA would not recognize the Commission as having regulatory authority over CRSTTA and the McIntosh Exchange, unlike the other sale of exchanges that were approved, the Commission would be unable to require CRSTTA to make any improvements necessary for the public's safety, convenience and accommodation as allowed by SDCL 49-31-7.
Given the lack of any vote or voice in CRSTTA by the McIntosh subscribers, the lack of regulatory control, and the effect of the loss of taxes, I move that the Commission deny the sale of the McIntosh Exchange to CRSTTA.
Finally I move that the Commission reject the proposed Findings of Fact and Conclusions of Law submitted by the parties. Chairman Burg seconded and Commissioner Nelson abstained. Motion passed 2-0.
Pursuant to the decision of the Circuit Court which remanded this case on the record, I move that the Commission delete the following Findings of Fact: 16, 17, 21, and 23. I further move that Finding of Fact 22 should be modified by deleting the last sentence and in its place submitting the following sentence: The position of CRSTTA creates conflict and, at a minimum, uncertainty as to the taxability of CRSTTA.
I further move that Conclusion of Law 3 should be deleted.
Pursuant to the Circuit Court's decision to make findings on all of the statutory criteria in 49-31-59, I move that the Commission enter new Findings of Fact on the following issues:
1. Under the factor of protection of the public interest, I move that the Commission find that the sale of the Morristown Exchange to CRSTTA would be contrary to the public interest. This finding should be based on the lack of property tax revenue and the uncertainty of any replacement tax. This finding should also be based on the lack of regulatory protections and the lack of the ability to vote or have a political voice in CRSTTA..
2. With respect to the factor of the adequacy of local telephone service, I move that the Commission make findings reflecting the following: That CRSTTA currently provides adequate service to its present customers. However, the Commission should also find that unlike the other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA offer, at a minimum, all existing services currently offered by U S WEST in the Morristown Exchange. Further, unlike other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA honor all existing U S WEST contracts, commitments, leases, licenses, and other agreements which relate to, arise from, or are used for the operation of the purchased exchange. In addition, in order to ensure continued adequacy of local telephone service to the Morristown Exchange, the Commission should find that the lack of regulatory control and a lack of ability to vote or have a political voice in CRSTTA could negatively affect adequacy of service.
3. With respect to the factor of reasonableness of rates for local service, I move that the Commission make findings reflecting the following: CRSTTA states that it would charge the same rates that U S WEST currently charges. However, unlike other sales approved by the Commission, the Commission is unable to require as a condition of the sale that CRSTTA not increase current local rates for 18 months.
4. On the factor of the provisioning of 911, enhanced 911, and other public safety services, I move that the Commission make findings reflecting the following: That CRSTTA offers free firebar service to volunteer fire departments in communities it currently serves. It currently does not offer 911 or E911 service because the counties have not yet authorized the collection of taxes for 911.
5. With respect to the factor concerning the ability of the local exchange company to provide modern, state-of-the-art telecommunications services that will help promote economic development, telemedicine, and distance learning in rural South Dakota, I move that the Commission enter findings reflecting the following: That CRSTTA has the ability to provide modern state-of-the-art telecommunications service. That CRSTTA has no plans to change existing Extended Area Service. However, unlike other sales, the Commission is unable to require as a condition of the sale that CRSTTA not change any current EAS arrangements without prior approval by the Commission. In addition, since CRSTTA would not recognize the Commission as having regulatory authority over CRSTTA and the Morristown Exchange, unlike the other sale of exchanges that were approved, the Commission would be unable to require CRSTTA to make any improvements necessary for the public's safety, convenience and accommodation as allowed by SDCL 49-31-7.
Given the lack of any vote or voice in CRSTTA by the Morristown subscribers, the lack of regulatory control, and the effect of the loss of taxes, I move that the Commission deny the sale of the Morristown Exchange to CRSTTA.
Finally I move that the Commission reject the proposed Findings of Fact and Conclusions of Law submitted by the parties. Chairman Burg seconded and Commissioner Nelson abstained. Motion passed 2-0.
With respect to Cheyenne River Sioux Tribe Telephone Authority's and U S WEST's Motion to Take Judicial Notice of a dispute resolution mechanism adopted by the Telephone Authority and a provisional certificate of convenience and necessity issued by the Standing Rock Sioux Tribe, I move that the Commission deny the Motion. The Circuit Court specifically remanded the case back to the Commission "on the record" and taking judicial notice of these resolutions would supplement the record in contravention of the Circuit Court's Order. In addition it appears that these resolutions would not be the type of facts which may be judicially noticed. The first is a CRSTTA Board of Directors' Resolution and the second is a provisional certificate of convenience and necessity Resolution issued by the Standing Rock Sioux Tribe. I believe that these are not the type of facts that may be judicially noticed by the Commission.
Pursuant to the decision of the Circuit Court which remanded this case on the record, I move that the Commission delete the following Findings of Fact: 16, 17, 21, and 23. I further move that Finding of Fact 22 should be modified by deleting the last sentence and in its place submitting the following sentence: The position of CRSTTA creates conflict and, at a minimum, uncertainty as to the taxability of CRSTTA.
I further move that Conclusion of Law 3 should be deleted.
Pursuant to the Circuit Court's decision to make findings on all of the statutory criteria in 49-31-59, I move that the Commission enter new Findings of Fact on the following issues:
1. Under the factor of protection of the public interest, I move that the Commission find that the sale of the Timber Lake Exchange to CRSTTA would be contrary to the public interest. This finding should be based on the lack of property tax revenue and the uncertainty of any replacement tax. This finding should also be based on the lack of regulatory protections and the lack of the ability to vote or have a political voice in CRSTTA..
2. With respect to the factor of the adequacy of local telephone service, I move that the Commission make findings reflecting the following: That CRSTTA currently provides adequate service to its present customers. However, the Commission should also find that unlike the other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA offer, at a minimum, all existing services currently offered by U S WEST in the Timber Lake Exchange. Further, unlike other sales approved by the Commission, the Commission is unable to require, as a condition of the sale, that CRSTTA honor all existing U S WEST contracts, commitments, leases, licenses, and other agreements which relate to, arise from, or are used for the operation of the purchased exchange. In addition, in order to ensure continued adequacy of local telephone service to the Timber Lake Exchange, the Commission should find that the lack of regulatory control and a lack of ability to vote or have a political voice in CRSTTA could negatively affect adequacy of service.
3. With respect to the factor of reasonableness of rates for local service, I move that the Commission make findings reflecting the following: CRSTTA states that it would charge the same rates that U S WEST currently charges. However, unlike other sales approved by the Commission, the Commission is unable to require as a condition of the sale that CRSTTA not increase current local rates for 18 months.
4. On the factor of the provisioning of 911, enhanced 911, and other public safety services, I move that the Commission make findings reflecting the following: That CRSTTA offers free firebar service to volunteer fire departments in communities it currently serves. It currently does not offer 911 or E911 service because the counties have not yet authorized the collection of taxes for 911.
5. With respect to the factor concerning the ability of the local exchange company to provide modern, state-of-the-art telecommunications services that will help promote economic development, telemedicine, and distance learning in rural South Dakota, I move that the Commission enter findings reflecting the following: That CRSTTA has the ability to provide modern state-of-the-art telecommunications service. That CRSTTA has no plans to change existing Extended Area Service. However, unlike other sales, the Commission is unable to require as a condition of the sale that CRSTTA not change any current EAS arrangements without prior approval by the Commission. In addition, since CRSTTA would not recognize the Commission as having regulatory authority over CRSTTA and the Timber Lake Exchange, unlike the other sale of exchanges that were approved, the Commission would be unable to require CRSTTA to make any improvements necessary for the public's safety, convenience and accommodation as allowed by SDCL 49-31-7.
Given the lack of any vote or voice in CRSTTA by the vast majority of the Timber Lake subscribers, the lack of regulatory control, and the effect of the loss of taxes, I move that the Commission deny the sale of the Timber Lake Exchange to CRSTTA.
Finally I move that the Commission reject the proposed Findings of Fact and Conclusions of Law submitted by the parties.Chairman Burg seconded and Commissioner Nelson abstained. Motion passed 2-0.
Commissioner Nelson made the following motions and comments:
With respect to Docket TC96-184, I move the following:
1. Consistent with Finding of Fact 107, I move that the Commission find on its own motion that the prices and terms and conditions as set forth in its Order shall be considered as interim prices, terms, and conditions. The Commission shall open a new docket to set permanent prices, terms, and conditions for interconnection for U S WEST.
With respect to the Motion by AT&T for Reconsideration/Modification of Order, I move the following:
2. I move that the Commission clarify its decision with respect to depreciation. In Finding of Fact 103, the Commission found that AT&T improperly used the FCC's depreciation lives rather than the Commission approved depreciation lives which were approved in Docket TC94-121. The Commission found that the Commission approved depreciation lives were more appropriate than the FCC's depreciation lives since the Commission approved lives more accurately reflect South Dakota circumstances on a going forward basis. However, after making this finding the Commission failed to include a finding requiring U S WEST to change its model to use the depreciation lives as approved by the Commission in Docket TC94-121. Therefore I move that the Commission make a new finding requiring that U S WEST use the Commission approved lives rather than the depreciation lives that it used in its models.
3. In Findings of Fact 108 to 112 the Commission required modifications to U S WEST's TELRIC Cost Study inputs but only listed those modifications as pertaining to the local loop. The Commission finds that it should have made clear that the modifications must be made to the other inputs used in the Cost Study. Therefore I move that the Commission issue new findings requiring U S WEST to make the modifications found in Findings of Fact 108 to 112 not only to the inputs used to determine the price for the local loop but for all related cost study inputs.
4. In Finding of Fact 19, the Commission found that an arbitrator shall not have authority to award punitive damages. I move that the Commission amend its Finding of Fact 19 to allow an arbitrator to award punitive damages. I believe this change is necessary because the Commission should not limit an arbitrator's power to award relief.
5. With respect to all other issues raised by AT&T in its Motion for Reconsideration I move that the Commission deny AT&T's Motion for Reconsideration on those other issues. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Mr. Hoseck recommended the agreement not be approved. Ms. Wiest noted that this is not an arbitrated agreement and recommended approval.
Chairman Burg moved to approve the agreement subject to the condition that Paragraph XXII, R. on page 44 of the agreement be revised to state that the agreement shall be construed in accordance with the laws of the state of South Dakota and subject to a finding that this is not an arbitrated agreement. Commissioner Schoenfelder seconded and Commissioner Nelson dissented. Motion passed 2-1.
Ms. Stangohr explained the application and recommended approval subject to the Applicant providing a bond or showing updated financial information before offering services in South Dakota.
Commissioner Schoenfelder moved to approve the application with the condition that the company provide a bond or show updated financial information before commencing business in South Dakota. Chairman Burg seconded and Commissioner Nelson dissented. Motion passed 2-1.
There was no objection to the extension of the waiver of switched access rules.
Commissioner Schoenfelder moved to grant the extension of the waiver of switched access rules and that the petitioner shall provide staff with a date certain regarding the time at which cost studies based on 1997 calendar year operations will be forthcoming. Chairman Burg seconded and Commissioner Nelson concurred. Motion passed 3-0.
Ms. Stangohr recommended granting a Certificate of Authority with restrictions on prepaid calling cards, deposits and advance payments.
Chairman Burg moved to grant a Certificate of Authority with the restrictions noted above. Commissioner Schoenfelder seconded and Commissioner Nelson concurred. Motion passed 3-0.
Ms. Stangohr explained the application and recommended approval with restrictions on prepaid calling cards, deposits and advance payments.
Commissioner Nelson moved to approve the application with the restrictions noted above. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Chairman Burg moved to grant intervention to U S WEST and to assess a $1,000 filing fee. Commissioner Nelson seconded and Commissioner Schoenfelder concurred. Motion passed 3-0.
Commissioner Nelson moved to grant intervention to U S WEST and to assess a $1,000 filing fee. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Commissioner Schoenfelder moved to grant intervention to U S WEST and to assess a $1,000 filing fee. Commissioner Nelson seconded and Chairman Burg concurred. Motion passed 3-0.
Rich Coit addressed the request for intervention by SDITC. Robert Marmet, DCT, spoke in opposition to the intervention. Mike Bradley, Ft. Randall Telephone, spoke in support. Mr. Hoseck spoke in opposition to the intervention. Ms. Wiest recommended granting the intervention.
Commissioner Nelson moved to grant intervention to SDITC. Chairman Burg seconded. Commissioner Schoenfelder dissented. Motion passed 2-1.
Ms. Wiest recommended taking under advisement the requests for Declaratory Ruling and Discovery.
Commissioner Nelson moved to grant intervention to DTS and DTI. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Commissioner Nelson moved to grant intervention to U S WEST and to assess a filing fee. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Commissioner Schoenfelder moved to grant intervention to U S WEST and to assess a filing fee. Commissioner Nelson seconded and Chairman Burg concurred. Motion passed 3-0.
Commissioner Nelson moved to grant intervention to U S WEST and to assess a filing fee. Commissioner Schoenfelder seconded and chairman Burg concurred. Motion passed 3-0.
Addendum
Commissioner Schoenfelder moved to assess a filing fee. Commissioner Nelson seconded and Chairman Burg concurred. Motion passed 3-0.
Addendum
Colleen Sevold, U S WEST, explained the filing. Mr. Jacobson presented further explanation and recommended approval.
Commissioner Nelson moved to approve the filing. Commissioner Schoenfelder seconded and Chairman Burg concurred. Motion passed 3-0.
Kathy Rottenbucher explained the complaint against Stateline Telecommunications regarding an unpublished address. Darrell Henderson, representing Stateline Telecommunications, addressed the complaint. Ms. Zimmer recommended finding probable cause. Ms. Wiest also recommended finding probable cause.
Commissioner Schoenfelder move to find probable cause. Commissioner Nelson seconded and Chairman Burg concurred. Motion passed 3-0.
The meeting was adjourned.
_______________________________
Shirleen Fugitt
Administrative Secretary
