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South Dakota Public Utilities Commission Meeting
Tuesday, November 30, 2004 at 2:30 P.M.
Holiday Inn City Center
Sioux Falls, 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 Attorneys John Smith, Karen Cremer, and Sara Harens; Staff Analysts Dave Jacobson, Christine Hibbeler, Steve Wegman, and Keith Senger; and Administrative Secretary Tina Douglas.
Also present were Tamie Aberle and Rita Mulkern, and Karen M. Comms, Montana-Dakota Utilities Co.; Dan Sharp, Montana-Dakota Resources; Brett Koenecke, May, Adam, Gerdes and Thompson, representing MCI Worldcom and Montana-Dakota Utilities Co.; Larry Toll and Colleen Sevold, Qwest Corporation; Mark Shlanta, South Dakota Network, LLC; Bob Miller, South Dakota Electric Utility Companies; Kevin Kouba; Otter Tail Power Co.; Alan Dietrich, NorthWestern Energy; Jim Edwards and Dave Blair, East River Electric; Steve Ahles, Whetstone Valley Electric; Darla Pollman Rogers, Riter, Rogers, Wattier and Brown, representing Dakota Turkey Growers, Interstate Telecommunications Cooperative, and Sioux Valley Telephone Company; Robert D. Rademacher, Dakota Energy Coop; Jim Wilcox, Xcel Energy, Inc.; Randy Houdek, Venture Communications; Rich Coit, South Dakota Telecommunications Association; Denny Law, Sioux Valley Telephone Co.; Ryan Taylor and Nathan Schoen, Cutler & Donahoe, LLP representing Hanson Communications; Bryan Roth, McCook Coop Telco; Mark Ayotte, Briggs and Morgan, representing Western Wireless; RaeAnn Kelsch, WWC License, LLC; Jeff Peters, Missouri River Energy Service; Mary Lohnes, Midcontinent Communications; Don Ball, Montana-Dakota Utilities Co.; Loren Noess, Central Electric; Don Maker, Sioux Valley Energy; and Beth Soholt, Wind on the Wires.
Joining the meeting by telephone were Staff Analysts Harlan Best, Michele Farris, Martin Bettmann, and Jim Mehlhaff; Cindy Grosvenor and Judy Christianson, Telec Consulting; Talbot Wieczorek, Gunderson, Palmer, Goodsell & Nelson, representing WWC License, LLC; Bob Towers, Cheapsake Consulting; Marlene Bennett, Martin Group; Mark Meierhenry, Danforth, Meierhenry & Meierhenry, representing Superior Renewable Energy; Jim Ekstrand, Tri-Country Telecom; Jennifer Wasnock, Johnson Stone; Rod Bowar, Kennebec Telephone; Chris Clark, Xcel Energy; Doug Eidahl, Vantage Point; Brian Iverson and Kyle White, Black Hills Corporation; Jeff Decker, NorthWestern Energy; and Donna Weig.
Administration
1. Approval of the Minutes of the Ad Hoc Meeting Held on October 8, 2004 and the Commission Meeting Held on October 26, 2004. (Staff: Tina Douglas.)
Commissioner Hanson moved to approve the minutes of the Commission Meeting Held on October 26, 2004 and the Ad Hoc Meeting Held on October 8, 2004. Commissioner Burg seconded and Chairman Sahr 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 2148 consumer contacts during 2004. Since the last report was prepared for the October 26, 2004, Commission meeting, 115 of these contacts had been received; 50 contacts involved telecommunications services; 12 contacts involved electricity issues; 4 contacts involved natural gas issues; 7 contacts involved gas and electric services; 13 contacts involved cellular phone issues; 8 contacts involved the Do Not Call registry; and 21 contacts involved miscellaneous services not regulated by the PUC. In 2004, 1828 of the 2148 complaints registered have been resolved informally. In 2003, 2110 of the 2579 complaints registered have been resolved informally.
Brett Koenecke, MCI WorldCom, stated that since MCI WorldCom (MCI) had filed a bankruptcy plan which was accepted by the Bankruptcy Court on April 20, 2004, this complaint should be dismissed. Mrs. Donna Weig stated that she feels that the big corporation gets by with whatever they want to. She feels that this is very unfair that she was double billed by MCI and her current telephone company. Ms. Cremer stated that MCI is under new management and this type of complaint has not been a problem since new management took over. Mrs. Weig also stated that MCI has continued to call her and she has asked to be put on their Do Not Call list. Ms. Cremer stated that she will call MCI and have her put on the Do Not Call list. Ms. Cremer recommended that the Commission dismiss and close the docket because the MCI case is being handled in Bankruptcy Court.
Commissioner Burg moved to not dismiss and close the dockets. Commissioner Hanson seconded and Chairman Sahr concurred. Motion passed 3-0.
Electric
See Transcript for November 30, 2004, Commission Meeting (EL04-016)
Chairman Sahr moved to accept the withdrawal of Superior's Motion to Shorten Time for Responses to Discovery Requests and to Extend Discovery Cut-0ff Date and to amend the order to reflect the new dates December 13, 2004, for Montana-Dakota Utilities Co.'s Answers to Superior's Interrogatories due and February 25, 2005, for Discovery to be concluded, which was agreed upon by the companies. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Jim Wilcox, Xcel Energy, and Don Maker, Sioux Valley Energy, requested approval of a Service Territory Exchange Agreement between Xcel Energy, Inc. and Sioux Valley-Southwestern Electric Cooperative, Inc. The agreement seeks a modification to the existing service territories of the respective companies allowing each party to better serve present and future customers within the modified territories. Ms. Farris stated the Commission received an Amended Service Territory Exchange Agreement on November 8, 2004. Ms. Farris recommended approval of the service territory boundary change.
Commissioner Burg moved to approve the service territory boundary change in EL04-025. Commissioner Hanson seconded and Chairman Sahr concurred. Motion passed 3-0.
Jim Wilcox, Xcel Energy, stated that Xcel Energy had filed its 2003 economic development report and 2004 proposed economic development plan with the Commission for approval. Ms. Farris stated that the program is successful. Ms. Farris asked that in the future, Xcel file this report and plan in March. Jim Wilcox agreed that the earlier filing date would not be a problem. Ms. Farris recommended that the 2003 Economic Development Report and the 2004 Economic Development Plan be approved.
Chairman Sahr moved to approve Xcel's 2003 Economic Development Report and the 2004 Economic Development Plan in EL04-028. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Kevin Kouba, Otter Tail Power Company and Steve Ahles, Whetstone Valley Electric Cooperative, Inc., asked for approval of the electric service rights exception. Ms. Farris stated that Whetstone Valley Electric Cooperative, Inc., Otter Tail Power Company and Victory Farms filed a joint petition to request Commission approval of a service rights exception. The petition requests the Commission to authorize a service rights exception to the Victory Farms' dry cow facility and manager residence located in the East 1/2 of the NW 1/4 of Section 34, Township 120 North, Range 48 West of the 5th P.M., Grant County, South Dakota, for as long as those facilities shall be used for agricultural and related residential purposes, and allow Otter Tail Power Company to serve the above described parcel. Ms. Farris recommended the Commission approve the electric service rights exception in this docket.
Chairman Sahr moved to approve the electric service rights exception between Whetstone Valley Electric Cooperative, Inc. and Otter Tail Power Company in EL04-031 with the conditions recommended by staff. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Alan Dietrich, NorthWestern Energy, asked that the Commission grant NorthWestern's petition to Intervene since this request is in its assigned service area. Darla Rogers, representing Dakota Turkey Growers, LLC, had no objection to the intervention. Ms. Cremer recommended granting intervention to NorthWestern Energy.
Chairman Sahr moved to approve NorthWestern's intervention in EL04-032. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Dave Jacobson stated that Otter Tail Power Company (Otter Tail) revised its tariffed Summary List of Contracts with Deviations. The existing contract with the Town of Revillo will expire on December 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 Town of Revillo 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 EL04-033. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Natural Gas
Brett Koenecke, Montana-Dakota Utilities Co., stated that the Joint Motion and Settlement Stipulation was agreed upon by staff and Montana-Dakota Utilities Co. which will increase rates for natural gas service in its Black Hills service territory by $669,549 or 1.5% based on a staff adjusted test year ended 12/31/2003. The increase for a residential customer would average about $.94 per month. The new rates would become effective December 1, 2004. Mr. Jacobson recommended approving the Joint Motion and Settlement Stipulation effective December 1, 2004.
Chairman Sahr moved to approve the Joint Motion and Settlement Stipulation with an effective date of December 1, 2004, in NG04-004. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Telecommunications
Mr. Best stated that on June 26, 2003, Western Telephone Company, filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Western Telephone Company have reached an agreement for a revenue requirement of $347,996.
Commissioner Hanson moved to grant Western Telephone Company's Switched Access Revenue Requirement of $347,996. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best stated that on June 26, 2003, Kennebec Telephone Company, filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Kennebec Telephone Company have reached an agreement for a revenue requirement of $488,860.
Commissioner Hanson moved to grant Kennebec Telephone Company's Switched Access Revenue Requirement of $488,860. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0
Mr. Best stated that on June 27, 2003, Venture Communications Cooperative, Inc., filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Venture Communications Cooperative, Inc., have reached an agreement for a revenue requirement of $4,272,662.
Commissioner Hanson moved to grant Venture Communications Cooperative, Inc.'s Switched Access Revenue Requirement of $4,272,662. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best stated that on June 27, 2003, Valley Telecommunications Cooperative Association, Inc., filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Valley Telecommunications Cooperative Association, Inc. have reached an agreement for a revenue requirement of $1,376,331.
Commissioner Hanson moved to grant Valley Telecommunications Cooperative Association, Inc.'s Switched Access Revenue Requirement of $1,376,331. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Senger stated that on June 30, 2003, Interstate Telecommunications Cooperative, Inc., filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Interstate Telecommunications Cooperative, Inc. have reached an agreement for a revenue requirement of $2,911,266.
Commissioner Hanson moved to grant Interstate Telecommunications Cooperative, Inc.'s Switched Access Revenue Requirement of $2,911,266. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Senger stated that on June 30, 2003, West River Cooperative Telephone Company, filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and West River Cooperative Telephone Company have reached an agreement for a revenue requirement of $870,257.
Commissioner Hanson moved to grant West River Cooperative Telephone Company's Switched Access Revenue Requirement of $870,257. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best stated that on June 30, 2003, Santel Communications Cooperative, Inc., filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Santel Communications Cooperative, Inc. have reached an agreement for a revenue requirement of $1,625,096.
Commissioner Hanson moved to grant Santel Communications Cooperative, Inc. 's Switched Access Revenue Requirement of $1,625,096. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best stated that on July 10, 2003, Cheyenne River Sioux Tribe Telephone Authority, filed a switched access cost study developing a revenue requirement and minutes of use that are included in the revenue requirement and minutes of use used to determine the switched access rates for the Local Exchange Carrier Association. Staff and Cheyenne River Sioux Tribe Telephone Authority have reached an agreement for a revenue requirement of $979,432.
Commissioner Hanson moved to grant Cheyenne River Sioux Tribe Telephone Authority's Switched Access Revenue Requirement of $979,432. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
See Transcript for November 30, 2004, Commission Meeting (TC03-191)
Chairman Sahr moved to defer TC03-191. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
10. TC04-034 In the Matter of the Request for a Confidentiality Determination in Accordance with ARSD 20:10:01:42. (Staff Attorney: Sara Harens)
Ms. Harens stated that the Commission received a request from staff for a confidentiality determination because staff was attempting to make claims on the bond proceeds of S&S Communications (S&S). In order to make these claims, staff had to provide information to the bonding companies which was filed with the Commission as confidential and S&S refused to permit the release of information filed as confidential to any bonding company that did not sign a confidentiality agreement. Since then S&S has voluntarily given the information to the bonding companies and there is no need to keep this docket open. Ms. Harens recommended that the docket be dismissed and closed.
Commissioner Burg moved to dismiss and close the docket. Commissioner Hanson seconded and Chairman Sahr concurred. Motion passed 3-0.
Ryan Taylor, Hanson Communications Inc., stated that James O. Ekstrand is sole owner of Tri-County Telcom, Inc. He also stated that Hanson Communications, Inc., has been involved since January with technical and service calls. There has been no negative feedback at all on this sale. The Commission published a notice in 3 papers regarding the sale of Tri-County Telcom, Inc. to Hanson Communications, Inc., and received no comments. Mr. Best recommended the sale of all of the issued and outstanding shares of all classes of stock of Tri-County Telcom, Inc. in accordance with the provisions of the Stock Purchase Agreement, dated as of September 16, 2004, and to amend the Certificate of Authority previously issued to Tri-County Telcom, Inc. to reflect the change in ownership of the corporation.
Chairman Sahr moved that the Commission find, based upon the facts stated in the applicants' Joint Application and subject to the conditions stated later in this motion, that the sale by James O. Ekstrand (Ekstrand), sole shareholder of Tri-County Telecom, Inc. (Tri-County) of all of the issued and outstanding stock of Tri-County to Hanson Communications, Inc. d/b/a McCook Telecom (McCook), a wholly-owned subsidiary of McCook Cooperative Telephone Company, will:
Result in the transfer of control of Tri-County and the Emery and Clayton local exchanges from Ekstrand to McCook
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 the Commission find that notice of the sale of the Emery and Clayton exchanges was published in the Emery Enterprise, the Salem Special and the Mitchell Daily Republic the week of November 8, 2004, and that no comments were received in response to the notice. Based on these findings, Chairman Sahr moved that 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 neither Tri-County nor McCook 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 Tri-County continue to 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 Tri-County continue to offer all services in those portions of the exchanges located in South Dakota that are currently offered to such customers; and
5. That Tri-County 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.
Chairman Sahr moved to approve the sale of the Emery exchange by James O. Ekstrand to Hanson Communications, Inc. d/b/a McCook Telecom. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Chairman Sahr moved to approve the sale of the Clayton exchange by James O. Ekstrand to Hanson Communications, Inc. d/b/a McCook Telecom. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Chairman Sahr moved that the Certificate of Authority of Tri-County Telecom, Inc. be amended to reflect the change of ownership approved in this docket. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best stated that on October 14, 2004, Black Hills FiberCom, L.L.C. (FiberCom) filed a request with the Public Utilities Commission for approval to continue FiberCom's exemption from establishing cost-based switched access rates which was granted on October 18, 2001. It is FiberCom's position that the additional costs associated with developing company-specific, cost-based intrastate switched access rates outweigh any benefits to FiberCom's customers and, therefore, it is in the best interests of the consumer and customers of FiberCom to continue the exemption pursuant to ARSD 20:10:27:11. Mr. Best recommended the Commission approve the Switched Access Tariff for FiberCom for a period of 3 years.
Chairman Sahr moved to grant the tariff and rates subject to refund with interest and also grant the ongoing exemption from developing company-specific cost-based switched access rates and also allow Black Hills FiberCom, L.L.C. to adopt a rate based on the statewide average costs for telecommunications companies with fewer than 100,000 access lines for a period of 3 years. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Mr. Best recommended granting intervention to Interstate Telecommunications Cooperative, Sioux Valley Telephone and the South Dakota Telecommunications Association. No one had an objection or comment.
Commissioner Hanson moved to grant intervention to Interstate Telecommunications Cooperative, Sioux Valley Telephone, and the South Dakota Telecommunications Association's in docket TC04-213. Chairman Sahr seconded and Commissioner Burg concurred. Motion passed 3-0.
Ms. Harens stated that the above Amendment has been properly filed, has been properly executed and does not appear to contain discriminatory provisions, no comments were filed, and recommended approval of the Amendment.
Commissioner Hanson moved to approve the Amendment TC04-216. Commissioner Hanson seconded and Commissioner Burg concurred. Motion passed 3-0.
Administrative
1. Telecommunications Outages (Staff Attorney: Sara Harens)
Ms. Harens stated that she had submitted a memo to the Commission regarding some of the problems and solutions that staff, AT&T and Qwest had discussed regarding this issue.
Meeting adjourned.
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Tina Douglas
Administrative Secretary
