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South Dakota Public Utilities Commission Meeting
Tuesday, May 9, 2006, at 9:30 A.M.
State Capitol Building, Room 412
Pierre, South Dakota
MINUTES OF THE COMMISSION MEETING
Vice Chairman Dustin Johnson called the meeting to order. Also present were; Executive Director Patty Van Gerpen; Deputy Executive Director Heather Forney; Commission Attorneys Rolayne Ailts Wiest and John Smith; Staff Attorneys Karen Cremer and Sara Greff; Staff Analysts Dave Jacobson, Martin Bettmann, Harlan Best, Bob Knadle, and Keith Senger; Consumer Affairs Supervisor, Deb Gregg; and Administrative Secretary Tina Douglas.
Also present were Bob Miller, South Dakota Electric Utility Companies; Brad Scott and Dave Larson, Larson, Sundall, Larson Schaub and Fox, representing Oahe Electric Cooperative Inc.; Dennis Eisnach, City of Pierre; John Brown, Riter, Rogers, Wattier & Brown, representing the City of Pierre; and Todd Chambers, City of Pierre.
Joining the meeting by telephone were Chairman Bob Sahr; Jeff Decker and Pamela Bonrud, NorthWestern Energy; Colleen Sevold, Qwest Corporation; and Jim Wilcox, Xcel Energy.
Commissioner Hanson was unable to attend the meeting due his attendance as OMS Board Member at the OMS Conference on Resource Adequacy.
Consumer Reports
1. Status Report on Consumer Utility Inquiries and Complaints Received by the Commission. (Consumer Affairs: Deb Gregg)
Ms. Deb Gregg reported that the Commission had received a total of 826 consumer contacts during 2006. Since the last report was prepared for the April 11, 2006, Commission meeting, 200 of these contacts had been received; 30 contacts involved telecommunications services; 36 contacts involved electricity issues; 29 contacts involved natural gas issues; 32 contacts involved cellular phone issues; 31 contacts involved do not call issues; and 42 contacts involved issues not regulated by the Public Utilities Commission. In 2006, 728 of the 826 complaints registered have been resolved informally. In 2005, 1,671 of the 1,885 complaints registered have been resolved informally.
Electricity
Jeff Decker, NorthWestern Energy (NorthWestern) stated that the Commission considered approval of revisions to its Electric Tariff on April 11, 2006. The Commission had requested further information regarding its NSF charge revisions. Northwestern has provided the requested cost justification information to staff. Mr. Dave Jacobson recommended approval of the revised tariff revisions.
Chairman Sahr moved to approve the tariff revisions in EL05-027. Commissioner Johnson seconded. Motion passed 2-0.
John Brown, representing the City of Pierre (City), stated that the need for a territory agreement arose due to discussion regarding annexation by the City. No annexation is being proposed at this time. A Territory Agreement has been reached between the City and the Oahe Electric. The agreement provides for future City of Pierre annexation of and extension of electric service into Sections 21 and 22 of Township 111 North, Range 79 West, compensation to Oahe Electric for electric distribution properties acquired by the City of Pierre, and retention of the East ½ of Section 22 by Oahe Electric as a service territory. Further provisions include provision of comparable service in Oahe retained service locations in areas annexed by the City and payment of sales tax by Oahe for retained service locations within the area of annexation. Mr. Martin Bettmann recommended approval of the Territorial Agreement.
Commissioner Johnson moved to approve the Territorial Agreement in EL06-004. Chairman Sahr seconded. Motion passed 2-0.
Jim Wilcox, Xcel Energy, stated that Sioux Valley-Southwestern Electric Cooperative, Inc. d/b/a Sioux Valley Energy (SVE) and Northern States Power Company d/b/a Xcel Energy (Xcel) entered into an agreement for Electric Service Rights Exception and is seeking the Commission approval of this agreement. SVE and Xcel are seeking approval of an exception to the current electric territory agreement to allow Xcel to provide electric service to a security light for the Fraternal Order of Police. The light is to be mounted on an existing pole along the north side of Highway 38/42 in the NW 1/4 of Section 28, Township 101 North, Range 48 West, in Minnehaha County. The parties to this agreement agree that the public interest would be served by Xcel providing electric service to the light. Mr. Martin Bettmann stated that the consent on the part of SVE is limited to the aforesaid service and will automatically terminate upon removal or abandonment of such service. The exception is not to be construed as having any impact upon or indicating any desire to change the service area assigned by the Commission. Mr. Bettmann recommended approval of the electric service rights exception.
Chairman Sahr moved to approve the Service Rights Exception in EL06-012. Commissioner Johnson seconded. Motion passed 2-0.
Telecommunications
Mr. Bob Knadle stated that Pacific Centrex Services, Inc. (Pacific) filed an application for a Certificate of Authority to provide interexchange telecommunications services and local exchange services in South Dakota. Pacific intends to offer resold interexchange services including MTS, in-WATS, out-WATS, and calling card services throughout South Dakota. Pacific also intends to offer facilities-based and resold local exchange services in the existing service areas of Qwest. Pacific intends to provide basic residential exchange service, including custom and class features, adjunct provided features (voice messaging, etc.), and residential ancillary services (911, directory listing, directory assistance, etc.). The company has requested a waiver from ARSD 20:10:24:02(08) and 20:10:32:03(11) which require the filing of current financial statements. Mr. Knadle recommended approval of the Certificate of Authority, subject to rural safeguards, and subject to the condition that the company not offer any prepaid services (including prepaid calling cards) and not accept or require any deposits or advance payments without prior approval of the commission. Mr. Knadle further recommended granting waivers of ARSD 20:10:24:02(08) and 20:10:32:03(11).
Commissioner Johnson moved to grant the waivers of ARSD 20:10:24:02(8) and 20:10:32:03(11), and grant Pacific Centrex Services, Inc.'s Certificate of Authority subject to rural safeguard and with restrictions from offering any prepaid services (including prepaid calling cards) or accepting customer deposits or advance payments without prior approval of the Commission. Chairman Sahr seconded. Motion passed 2-0.
2. In the Matter of the Approval of Agreements in Dockets TC06-023 and TC06-024.
Ms. Sara Greff stated that the Agreements have been properly filed, have been properly executed and do not appear to contain discriminatory provisions, no comments were filed, and recommended approval of the Agreements.
Commissioner Johnson moved to approve the Agreements in TC06-023 and TC06-024. Chairman Sahr seconded. Motion passed 2-0.
3. In the Matter of the Approval of Amendments to Agreements in TC06-025 and TC06-026
Ms. Sara Greff stated that all the companies have active Certificates of Authority. The Amendments to the Agreements have been properly filed, have been properly executed and do not appear to contain discriminatory provisions, no comments were filed, and recommended approval of the Amendments to the Agreements.
Commissioner Johnson moved to approve the Amendments to the Agreements in TC06-025 and TC06-026. Chairman Sahr seconded. Motion passed 2-0.
Administration
1. Establishment of the Gross Receipts Tax levy for the 2007 Fiscal Year (Deputy Executive Director: Heather Forney)
Ms. Heather Forney stated that SDCL Chapter 49-1A establishes the South Dakota Public Utilities Commission gross receipts tax fund. This fund is financed by assessing a tax on the annual intrastate gross receipts received by a public utility. The fund is used by the Commission to defray regulatory expenses related to the regulation of telecommunications, electricity and natural gas. On April 1st of each year, all utilities and telecommunications companies doing business in South Dakota are required to file with the Commission the amount of their gross receipts derived from customers within South Dakota during the preceding calendar year. On May 1st of each year, the Commission is required to establish the rate and assess the tax authorized by SDCL 49-1A-3 which, together with any funds remaining from the current fiscal year and the two hundred fifty dollar minimum gross receipt tax, will fund the Commission=s budget for the next fiscal year and provide a contingency reserve in an amount not to exceed the prior year=s budget. In accordance with these standard set forth in SDCL 49-1A-4. Ms. Forney recommended assessing the maximum rate of .0015 with a $250.00 minimum.
Chairman Sahr moved to establish the maximum rate and assess the gross receipts tax. Commissioner Johnson seconded. Motion passed 2-0.
2. In the Matter of a Contract with Spiegel & McDairmid (General Counsel: John Smith)
Mr. John Smith stated on April 25, 2006, NorthWestern Corporation d/b/a NorthWestern Energy (NorthWestern) announced that it had entered into an Agreement and Plan of Merger with Babcock & Brown Infrastructure Limited, an Australian public company, and certain of its subsidiaries (BBI) pursuant to which BBI will acquire ownership of NorthWestern. It appears likely that the transaction will meet the standards requiring approval by FERC under Section 203 of the Federal Power Act as amended by the Energy Policy Act of 2005. The transaction will also probably require anti-trust review under the Hart, Scott, Rodino Act and possibly review by other federal agencies. Spiegel & McDairmid specializes in this type of proceeding, and we have retained them before. Mr. Smith is setting the maximum expenditure amount in the contract at $50,000.00. Mr. Smith stated that he had checked with the Deputy Executive Director, Heather Forney, and she indicated that amount is acceptable and available in the Public Utilities Commission budget.
Commissioner Johnson moved to authorize the Executive Director to enter into a Consulting contract with Spiegel & McDairmid regarding the above stated matter with a maximum expenditure amount of $50,000.00. Chairman Sahr seconded. Motion passed 2-0.
Meeting adjourned.
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Tina Douglas
Administrative Secretary
