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South Dakota Public Utilities Commission Meeting
Tuesday, June 8, 2004 at 9:30 A.M.
Capital Building, Room 413
Pierre, South Dakota
MINUTES OF THE COMMISSION MEETING
Chairman Bob Sahr called the meeting to order. Also present were Vice Chairman Gary Hanson; Commissioner Jim Burg; Executive Director Pamela Bonrud; Deputy Executive Director Heather Forney; Commission Advisor Greg Rislov; Commission Attorneys Rolayne Ailts Wiest and John Smith; Staff Attorney Karen Cremer; Staff Analysts Michele Farris, Harlan Best, Dave Jacobson, Jim Mehlhaff, and Steve Wegman; and Administrative Secretary Tina Douglas.
Also present were Dan Wall, East River Electric; Brett Koenecke, May, Adam, Gerdes and Thompson representing Midcontinent Communications, Montana-Dakota Utilities Co., and Xcel Energy; Darla Rogers, Riter, Rogers, Mayer, Hofer, Wattier & Brown representing Sioux Valley Telephone Company, South Dakota Rural Electric Association, and Interstate Telecommunications Cooperative, Inc.; Bob Miller, South Dakota Electric Utility Companies; and Audry Ricketts, South Dakota Rural Electric Association.
Joining the meeting by telephone were Colleen Sevold and Melissa Thompson, Qwest Corporation; Joe Schuele, Martin Group; Alan Dietrich, NorthWestern Corporation; Pat Mastel, McLeodUSA Telecommunications Services, Inc.; Ryan Taylor, Cutler & Donahoe representing Hills Telephone Company, Inc.; Don Snyders, Hills Telephone Company Inc.; Denny Law, Sioux Valley Telephone Company; Gene Harrison, MidAmerican Energy Company; Jeff Larson, Sancom Inc.; Mary Lohnes, Midcontinent Communications; Robin Houwman, Danforth, Meierhenry & Meierhenry representing Superior Renewable Energy LLC; and Ben Dickens, Blooston, Mordkoffky, Jackson, Dickens representing Interstate Telecommunications Cooperative, Inc.
Administration
1. Approval of the Minutes of the Commission Meetings held on May 11 and May 24, 2004. (Staff: Tina Douglas.)
Commissioner Hanson moved to approve the minutes of the Commission meetings held on May 11 and May 24, 2004. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Consumer Issues
1. Status Report on Consumer Utility Inquiries and Complaints Received by the Commission. (Consumer Affairs: Jim Mehlhaff.)
Mr. Mehlhaff reported that the Commission received a total of 1213 consumer contacts during 2004. Since the last report was prepared for the May 24, 2004, Commission meeting, 79 of these contacts had been received; 46 contacts involved telecommunications services; 4 contacts involved electricity issues; 2 contacts involved natural gas issues; 3 contacts involved gas and electric services; 6 contacts involved cellular phone issues; 9 contacts involved the Do Not Call registry; and 9 contacts involved miscellaneous services not regulated by the PUC. In 2004, 886 of the 1213 complaints registered have been resolved informally. In 2003, 1983 of the 2579 complaints registered have been resolved informally.
2. In the Matter of Dismissing Dockets CT03-006 and CT03-007
Ms. Cremer stated that she had spoken to the complainants' attorneys. They indicated that an agreement was signed by all parties and was mailed to the Commission on June 7, 2004.
Chairman Sahr moved to dismiss and close dockets in CT03-006 and CT03-007. Commissioner Burg seconded and Commissioner Hanson concurred. Motion passed 3-0.
Electricity
Dan Wall, East River Electric, stated that if the Commission had any questions he was available to answer them. Brett Koenecke, Xcel Energy, stated that Xcel Energy had no issues with filing but had intervened for informational purposes only. Ms. Cremer and Ms. Farris recommended approval of the Stipulation and Application.
Commissioner Burg moved to approve East River Electric Power Cooperative, Inc.'s Stipulation and Application for a Transmission Upgrade in EL04-009. Commissioner Hanson seconded and Chairman Sahr concurred. Motion passed 3-0.
Mr. Jacobson stated that Otter Tail Power Company (Otter Tail) filed an application for approval to revise its tariffed Summary List of Contracts with Deviations. The existing contract with the City of Lake Norden will expire on June 1, 2004. Otter Tail states the new agreement does not contain any deviations from Otter Tail's currently filed tariff and therefore requests that reference to a contract with the City of Lake Norden be removed from the Summary List of Contracts with Deviations. Mr. Jacobson recommended approval of the tariff revisions.
Chairman Sahr moved to approve the tariff revisions in EL04-014. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Ms. Darla Rogers, South Dakota Rural Electric Association (SDREA), stated that SDREA intends to file a motion to intervene in this docket. Mr. Brett Koenecke, Montana-Dakota Utilities Co. (MDU), stated that MDU had filed for intervention in this docket. Robin Houwman, Superior Renewable Energy LLC, had no objection to the intervention of MDU.
Chairman Sahr moved to grant intervention to Montana-Dakota Utilities in EL04-016. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Ms. Farris stated that the Commission had received a Notification of Intent to Submit an Application for a Permit for an Energy Conversion Facility from Basin Electric Power Cooperative. The Notice of Intent describes the proposed facility, the projected costs, a list of the chairpersons in the affected area, and the timeline of the project. Ms. Farris handed out a map indicating the 6 miles radius plus 12 miles of gas pipeline which is staffs' recommendation of the affected area. (The map is attached to these minutes). Ms. Farris recommended designating a local review committee which will consist of: the Chairman of the Brown County Commission; the Chairman of the Spink County Commission; the President of the School Board of Groton School District; the President of the School Board of Conde School District; the Mayor of the City of Groton; and the Project Manager from Basin Electric Power Cooperative.
Chairman Sahr moved to approve that the Commission designate the affected area for Basin Electric's proposed simple cycle gas turbine energy conversion facility to be the area within six (6) miles of the site of the proposed facility located entirely within Brown County and the Groton School District, together with the area in which the proposed gas supply pipeline will be located, which will include areas in southern Brown and northern Spink Counties and the Groton and Conde School Districts. Further, that the Commission designate the persons holding the following offices to serve ex officio as the local review committee for Basin Electric's proposed project:
The Chairman of the Brown County Commission
The Chairman of the Spink County Commission
The President of the School Board of Groton School District 06-3
The President of the School Board of Conde School District 56-1
The Mayor of the City of Groton
A person appointed by Basin Electric Power Cooperative.
Chairman Sahr also moved that any person on the committee who ceases to hold such office or appointment shall be replaced on the committee by his successor, who shall promptly notify the Commission of such succession. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Natural Gas
Alan Dietrich, NorthWestern Corporation, asked the Commission for intervention in NG04-001. Gene Harrison, MidAmerican Energy Company, had no objection to the intervention. Ms. Cremer recommended approval of the intervention.
Chairman Sahr moved to grant intervention to NorthWestern Corporation in NG04-001. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Ms. Cremer recommended setting a procedural schedule.
Chairman Sahr moved that parties and staff set up a procedural schedule in NG04-001. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Telecommunications
Ms. Farris stated that Southwestern Bell Communications Services, Inc. d/b/a SBC Long Distance (SBC) had submitted an Application for a Certificate of Authority in accordance with the administrative rules of SD. SBC intends to provide resold and facilities based local exchange service and exchange access services . SBC's services include, but are not limited to, basic local exchange service, custom calling features CLASS services, data services and exchange access services to interconnecting carriers. SBC intends to offer its services initially in the territory now served by Qwest Corporation. It has made all staff recommended changes to the tariff. SBC does not maintain its own financial statements. All financial statements are consolidated into that of the parent company. Therefore, it has requested a waiver from 20:10:32:03(11), which requires them to submit current balance sheet, income statement, and cash flow statements. SBC has submitted a $25,000 surety bond. Ms. Farris recommended the Commission approve the request for a waiver of the financial information and also approve the Certificate of Authority for local exchange services for Southwestern Bell Communications Services, Inc. d/b/a SBC Long Distance with the requirement it have a $25,000 surety bond, and comply with the rural safeguards.
Commissioner Burg moved to grant the waiver of ARSD 20:10:32:03(11) and grant Southwestern Bell Communications Services Inc. d/b/a SBC Long Distance's Certificate of Authority subject to rural safeguards and continuing of the $25,000.00 bond. Commissioner Hanson seconded and Chairman Sahr concurred. Motion passed 3-0.
Ms. Darla Rogers, Sioux Valley Telephone Company, stated that the staff had a few questions regarding this docket. She stated Sioux Valley Telephone Company and Hills Telephone Company, Inc., had filed an application in Minnesota. The Minnesota Commission had approved the application on April 21, 2004. Ryan Taylor, Hills Telephone Company, Inc., stated that changes on the boundary map was very nearly resolved which staff had recommended. Mr. Best stated a joint application was filed on March 2, 2004, by Hills Telephone Company, Inc. and Sioux Valley Telephone Company for the sale of the local telephone exchange facilities serving the Valley Springs, East Valley Springs, and North Larchwood local exchanges. Payments of taxes will remain the same. The Managers stated that they will provide state of the art services. Digital services will continue in the areas that are already receiving digital services. The service technicians will be close by in the town of Garretson. Ms. Cremer stated that the acquisition cost should be included in the existing contract agreement. Service will remain unchanged and no extended area service will be discontinued.
Chairman Sahr moved that the Commission find, based upon the facts stated in the applicants' Joint Application as supplemented by the First and Second Supplements and subject to the conditions stated later in this motion, that the sale by Sioux Valley Telephone Company (Sioux Valley) of the Valley Springs, East Valley Springs and North Larchwood local exchanges to Hills Telephone Company, Inc. (Hills) will:
" Protect and further the public interest
" Continue the provision of adequate local telephone service to local customers
" Provide local service in these areas at reasonable rates
" Continue to provide access to 911, Enhanced 911, and other public safety services
" Not adversely effect the payment of taxes, and
" Provide the effected rural communities access to modern, state of the art telecommunications services that will help promote economic development, tele-medicine, and distance learning.
Chairman Sahr further moved that based on these findings, the sale of these local exchanges be approved, subject to the Commission's approval of the sale of each local exchange by a separate vote as required by SDCL 49-31-59 and subject to the following conditions:
1. That the sale of exchanges proceed substantially in accordance with the terms set forth in the Application as supplemented and the other documents submitted in support of the Application.
2. That Hills not recover any of the acquisition adjustment or good will associated with the purchase through its regulated interstate or intrastate rates, through its local rates, or through federal or state universal service funds;
3. That Hills honor all existing contracts, commitments, leases, licenses, and other agreements which relate to, arise from, or are used for the operation of the purchased exchanges;
4. That Hills continue to offer all services in those portions of the exchanges located in South Dakota that are currently offered by Sioux Valley to such customers; and
5. That Hills not discontinue any extended area service currently provided to those portions of the exchanges located in South Dakota without first obtaining approval from the Commission. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
The Commission then separately considered whether to approve the sale of each exchange.
Chairman Sahr moved to approve the sale of the Valley Springs exchange by Sioux Valley Telephone Company to Hills Telephone Company, Inc. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Chairman Sahr moved to approve the sale of the East Valley Springs exchange by Sioux Valley Telephone Company to Hills Telephone Company, Inc. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Chairman Sahr moved to approve the sale of the North Larchwood exchange by Sioux Valley Telephone Company to Hills Telephone Company, Inc. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Ms. Wiest stated that ACN Communication Services, Inc. was granted a local exchange Certificate of Authority at the May 24, 2004, Commission Meeting. Ms. Wiest recommended approval of the Agreement in TC04-058.
Chairman Sahr moved to approve the Agreement in TC04-058. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Brett Koenecke, Midcontinent Communications, asked the Commission to grant Midcontinent Communications' Motion to Withdraw.
Chairman Sahr moved to grant Midcontinent Communications' Motion to Withdraw in TC04- 061. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Brett Koenecke, Midcontinent Communications, stated that there were two issues: 1) It is not seeking ETC status but how the rules read it was required to file as if it was seeking ETC status. 2) The typographical error was corrected to 20:10:32:18. Ms. Darla Rogers and Ben Dickens, Interstate Telecommunications Cooperative, Inc., do not oppose the application and want the rules to be followed when the interconnection agreement is filed. Mr. Best recommended granting Midcontinent Communications' amended Certificate of Authority, the financial statements will be treated as confidential, granting the waiver from 20:10:32:15, and the amended Certificate of Authority be approved with an effective date of June 19, 2004.
Chairman Sahr moved to approve Midcontinent Communications' amended Certificate of Authority and also grant a waiver from 20:10:32:15 with an effective date of June 19, 2004. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Brett Koenecke, Midcontinent Communications, stated that it is a CLEC in the Mitchell area and therefore is seeking intervention in this docket. Jeff Larson, Sancom, Inc. stated that it objected to the intervention and will provide the local number portability information to Midcontinent Communication and it is prepared to do that when it enters into an interconnection agreement with Midcontinent Communications. Ms. Cremer stated that ARSD 20:10:32:04 states that the Commission must grant intervention to Midcontinent Communications and recommended that Midcontinent Communications be granted intervention in this docket.
Chairman Sahr moved to grant intervention to Midcontinent Communications in TC04-090. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Meeting adjourned.
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Tina Douglas
Administrative Secretary
