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South Dakota Public Utilities Commission Meeting
April 23, 2013, at 9:30 A.M. CDT
Room 412, Capitol Building
Pierre, South Dakota

MINUTES OF THE COMMISSION MEETING

Chairman Gary Hanson called the meeting to order. Present were: Commissioners: Chris Nelson and Kristie Fiegen; Commission Counsel: John Smith and Rolayne Wiest; Staff Attorneys: Karen Cremer and Kristen Edwards; Staff Analysts: Brittany Mehlhaff, David Jacobson, Matthew Tysdal, Darren Kearney, Jason Simmons, and David Henry; and Staff: Sherry Dickerson

Also present were:
Margo Northrup, Riter, Rogers, Wattier & Northrup, LLP, representing Local Exchange Carriers Association and South Dakota Telecommunications Association; Bill VanCamp, Olinger, Lovald, McCahren & Reimers, P.C., representing AT&T Communications of the Midwest; Jon Oostra, Ron Gogolin, and Mike Sydow, NorthWestern Energy; Mark Mengenhauser and Kassie Nilson, Charles Mix Electric Association, Inc.;  Michael Whalen, Michael J. Whalen Law Office, Prof. LLC, representing Charles Mix Electric Association, Inc.; Bruce Gerhardson, Peter Beithon, and Tom Brause, Otter Tail Power Company; and Michael Makens, Bill Makens, James Makens, and Pat Makens, Oak Tree Energy, LLC

Joining the meeting by telephone were:
Sharon Thomas, Technologies Management, Inc., representing Ymax Communications Corp. and Budget Prepay, Inc. dba Budget Phone; Meredith Moore, Cutler & Donahoe, LLP, representing Interstate Telecommunications Cooperative, Inc.; Talbot Wieczorek, Gunderson Palmer Nelson & Ashmore, LLP, representing MidContinent Communications; Marlene Bennett, Consortia Consulting, representing South Dakota Telecommunications Association; Jason Topp, Qwest Corporation dba CenturyLink QC; Jon Thurber and Chris Kilpatrick, Black Hills Power, Inc.; Bleau LaFave, Pam Bonrud, Rick Edwards, Tim Olson, and Al Brogan, NorthWestern Energy; Yvette LaFrantz, Doney Law Firm, representing Oak Tree Energy, LLC; Mike Uda, Uda Law Firm, P.C., representing Oak Tree Energy, LLC; Bob Towers, Dave Peterson, and Basil Copeland, Chesapeake Regulatory Consultants Inc., representing SD Public Utilities Commission; Brad Howard, Diane Munns, and Suzan Stewart, MidAmerican Energy Co.; and Sherman Vomacka and Alysia Adams, Gregory Farmers Elevator

(NOTE: For the purpose of continuity, these minutes are not necessarily in chronological order.)

Administration

1.     Approval of the Minutes the Ad Hoc Commission Meeting held on March 29, 2013. (Staff: Joy Irving)

     Commissioner Nelson moved to approve the Ad Hoc Commission Meeting held on March 29, 2013. Motion carried 3-0.

Consumer Reports

1.     Status Report on Consumer Utility Inquiries and Complaints Received by the Commission (Consumer Affairs: Deb Gregg)

The Commission received a total of 88 contacts since the last report was prepared for the April 9, 2013 Commission meeting.

8 of the contacts involved telecommunication services, 45 of the contacts involved electrical services, 7 contacts involved natural gas service, 4 contacts involved cell phone service, 13 contacts were related to the Do Not Call Registry, and 11 contacts were related to issues not regulated by the PUC.

561 of the 585 complaints received in 2013 have been resolved.

Electric

1.     EL11-001     In the Matter of the Petition of Black Hills Power, Inc. to Establish an Environmental Measures Cost Recovery Tariff (Staff Analyst: Brittany Mehlhaff; Attorney: Karen Cremer)

Mr. Chris Kilpatrick, Black Hills Power, Inc. (BHP), asked that the Commission accept Statements A through R and Work Papers 1 through 4 submitted in Docket EL12-061 on December 17, 2012, as Black Hills Power's 2012 Annual Report of South Dakota Jurisdictional Financial Condition. Ms. Karen Cremer, staff attorney, stated staff does not object to BHP's request.

     Commissioner Nelson moved to accept Statements A through R and Work Papers 1 through 4 submitted in Docket EL12-061 on December 17, 2012, as Black Hills Power's 2012 Annual Report of South Dakota Jurisdictional Financial Condition. Motion carried 3-0.

2.     EL11-006     In the Matter of the Complaint by Oak Tree Energy LLC against NorthWestern Energy for refusing to enter into a Purchase Power Agreement (Staff Analyst: Brian Rounds, Staff Attorney: Karen Cremer)
        
A lengthy discussion took place regarding docket EL11-006.  An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2013, April 23, 2013, recording located at: http://puc.sd.gov/commission/media/2013/puc04232013.mp3.

     Commissioner Nelson moved, on the issue of the levelized avoided cost in the Commission's Final Decision and Order not including a discount factor, that the actual annual avoided cost values be approved as opposed to an avoided cost value levelized over the 20 year term of the contract. Commissioner Fiegen moved as a substitute motion to reconsider the Commission's Final Decision and Order regarding the use of levelized avoided cost without inclusion of a discount factor, but to defer final action on the appropriate resolution of the issue until the next meeting. Substitute motion carried 3-0.

     Commissioner Fiegen moved to not reconsider the Commission's Final Decision and Order with respect to the use of a 20% capacity factor in calculating avoided cost. Motion carried 3-0.

     Commissioner Fiegen moved to reconsider the Final Decision and Order's commencement of escalation of avoided capacity costs in the initial year of energy delivery rather than in 2015. Motion passed 2-1. Commissioner Hanson dissented. The Commission did not take action to establish the proper capacity escalation commencement date.

     Commissioner Nelson moved to reconsider the Final Decision and Order's use of a 2.25% load growth factor in the avoided cost calculation model, but to defer decision on the issue until its next meeting. Motion carried 3-0.

3.     EL12-027     In the Matter of the Petition of Otter Tail Power Company to Establish an Environmental Quality Cost Recovery Tariff (Staff Analyst: Brittany Mehlhaff, Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding docket EL12-027.  An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2013, April 23, 2013, recording located at: http://puc.sd.gov/commission/media/2013/puc04232013.mp3.

     Commissioner Nelson moved to grant Otter Tail's request to withdraw the petition and dismiss and close the docket without prejudice. Motion carried 3-0.

4.     EL12-054     In the Matter of the Petition of Otter Tail Power Company for Approval of its 2013 Transmission Cost Recovery Eligibility and Rate Adjustment (Staff Analyst: Brittany Mehlhaff; Staff Attorney: Kristen Edwards)

Mr. Bruce Gerhardson, Otter Tail Power Company (Otter Tail), asked that the Commission approve its annual update to its Transmission Cost Recovery Rider (TCR) rate. Ms. Brittany Mehlhaff, staff analyst, recommended that the Commission grant the Joint Motion for Approval of the Settlement Stipulation and approve the rates, terms, conditions, and tariff revisions stipulated therein.

     Commissioner Nelson moved to grant the Joint Motion for Approval of the Settlement Stipulation and approve the rates, terms and conditions stipulated therein effective May 1, 2013. Motion carried 3-0.

5.     EL13-004     In The Matter of the Request for a Declaratory Ruling Regarding the Electric Service Territory Boundary Between Charles Mix Electric Association, Inc. and Northwestern Corporation dba Northwestern Energy (Staff Analyst: Matt Tysdal; Staff Attorney: Kristen Edwards)

A lengthy discussion took place regarding docket EL13-004.  An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2013, April 23, 2013, recording located at: http://puc.sd.gov/commission/media/2013/puc04232013.mp3.

     Commissioner Nelson moved to determine that the north-south boundary line between Charles Mix Electric Association, Inc. and NorthWestern Energy in the Southwest Quarter of the Northeast Quarter of Section 23 of T99N, R68W, Charles Mix County is located at the 1/16th line. Motion carried 2-1. Commissioner Fiegen dissented.

6.     EL13-007     In the Matter of the Petition of Otter Tail Power Company for Approval of Deferred Accounting for Certain Transmission-Related Costs for Big Stone II (Staff Analysts: Patrick Steffensen, David Jacobson; Staff Attorney: Kristen Edwards)

Mr. Bruce Gerhardson, Otter Tail Power Company (Otter Tail), asked that the Commission grant Otter Tail the authority to use deferred accounting until its next rate case for certain transmission-related costs incurred during its participation in the Big Stone II generation project. Mr. Patrick Steffensen, staff analyst, recommended that the Commission grant the deferred accounting method, with staff's conditions.

     Commissioner Fiegen moved to grant the deferral of the proposed accounting method for the transmission-related costs incurred by Otter Tail Power Company during its participation in the Big Stone II project, subject to the three recommendations by staff. Motion carried 3-0.

Grain

1.     GW13-001     In the Matter of Gregory Farmers Elevator Company (Staff Analyst: Jim Mehlhaff; Staff Attorney: Kristen Edwards)

Mr. Jim Mehlhaff, Grain Warehouse Division Manager, recommended that Gregory Farmer's Elevator Company's (GFEC) grain buyer and warehouse licenses be revoked. Mr. Sherman Vomacka, GFEC, stated that GFEC had no objection. Ms. Kristen Edwards, staff attorney, recommended that GFEC's grain buyer and warehouse licenses be revoked and pursue no further action at this time.

     Commissioner Nelson moved to revoke GFEC's grain buyer and warehouse licenses. Motion carried 3-0.

Natural Gas

1.     NG13-001     In the Matter of the Filing by MidAmerican Energy Company for Approval of Its 2012 Economic Development Activities and 2013 Proposed Budget (Staff Analyst: Darren Kearney, Staff Attorney: Kristen Edwards)

Ms. Suzan Stewart, MidAmerican Energy Company (MidAmerican), asked that the Commission approve its 2012 Economic Development Annual Report and 2013 Economic Development Plan. Ms. Steward stated that the filing included MidAmerican's report on 2012 economic development activities, actual expenses for 2012, and planned budget for 2013. Mr. Darren Kearney, staff analyst, recommended that the Commission approve MidAmerican's request.

     Commissioner Hanson moved to approve MidAmerican's 2012 Economic Development Activities Report and 2013 Proposed Budget. Motion carried 3-0.

2.     NG13-002     In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of Its 2013 Economic Development Proposed Budget and 2012 Economic Development Expenses (Staff Analyst: Darren Kearney; Staff Attorney: Karen Cremer)

Ms. Pam Bonrud, NorthWestern Energy (NorthWestern), asked that the Commission approve its proposed 2013 economic development budget and 2012 economic development report detailing NorthWestern's actual versus budgeted expenses. Mr. Rick Edwards, NorthWestern, explained the underlying basis for NorthWestern's economic report and budget.

     Commissioner Fiegen moved to approve NorthWestern's 2012 economic development report and the 2013 economic development budget. Motion carried 3-0.

Telecommunications

1.     TC12-117     In the Matter of the Filing by Budget PrePay, Inc. dba Budget Phone for Approval of Revisions to its Access Services Tariff No. 3 (Staff Analyst: David Jacobson, Staff Attorney: Karen Cremer)

Ms. Sharon Thomas, Technologies Management, Inc., representing, Budget Prepay, Inc. dba Budget Phone (Budget Prepay), asked that the Commission dismiss and close the docket. Ms. Karen Cremer, staff attorney, recommended that the Commission dismiss and close the docket.

     Commissioner Fiegen moved to grant Budget PrePay, Inc.'s request to withdraw its filing and dismiss and close the docket.  Motion carried 3-0.

2.     TC12-179     In the Matter of the Filing by Ymax Communications Corp. for Approval of Revisions to its Tariff No. 2 (Staff Analyst: Brian Rounds; Staff Attorney: Kristen Edwards)
        
Ms. Sharon Thomas, YMax Communications Corp. (YMax), asked that the Commission approve its proposed tariff revisions. Mr. Brian Rounds, staff analyst, recommended that the Commission approve YMax's proposed tariff revisions.

     Commissioner Hanson moved to approve the proposed tariff revisions. Motion carried 3-0.

3.     TC13-023     In the Matter of the Filing by Interstate Telecommunications Cooperative, Inc., for Approval of Revisions to its Access Services Tariff No. 1 (Staff Analyst: Darren Kearney; Staff Attorney: Karen Cremer)

Ms. Margo Northrup, Rogers, Wattier & Northrup, LLP, representing Local Exchange Carriers Association (LECA), asked that the Commission grant LECA's Petition to Intervene. Ms. Meredith Moore, Cutler & Donahoe, LLP, representing Interstate Telecommunications Cooperative, Inc. and Ms. Karen Cremer, staff attorney, stated there was no objection to LECA's request. Ms. Moore explained ITC's revisions to its tariffs. Mr. Darren Kearney, staff analyst, identified the revisions were in order per ITC's explanation. Mr. Kearney recommended that the Commission grant approval.

     Commissioner Nelson moved to grant LECA's Petition to Intervene. Motion carried 3-0.

     Commissioner Fiegen moved to grant ITC's Petition for Approval of an Amendment to the Tariff. Motion carried 3-0.

4.     TC13-027     In the Matter of the Consideration of Eligible Telecommunications Carrier Certification Requirements (Commission Counsel: Rolayne Wiest)

A lengthy discussion took place regarding docket TC13-027.  An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2013, April 23, 2013, recording located at: http://puc.sd.gov/commission/media/2013/puc04232013.mp3.

     Commissioner Nelson moved to waive the June 1st deadline to July 1st for all ETCs. If an ETC is filing for a 5 year plan with the FCC that ETC is not required to file a 2 year plan pursuant to the rule; however other ETC's must continue to file their 2 year plans. All ETCs must continue to file progress reports. Commissioner Nelson further moved that subsections 2, 4, and 5 are waived only for the portions that are not consistent with the federal rules and subsections 8 and 9 are waived. Motion carried 3-0.

Administration

1.     Establishment of the Gross Receipts Tax levy for the 2014 Fiscal Year (Finance Manager: Cindy Kemnitz)

Ms. Cindy Kemnitz, Finance Manager, requested that the Commission establish the rate and assess the gross receipts tax as authorized in SDCL49-1A-3.   

     Commissioner Hanson moved to establish the rate and assess the gross receipts tax as authorized in SDCL49-1A-3 as the maximum rate of $250.00 or $0.15% whichever is greater.  Motion carried 3-0.

Items for Commission Discussion

A lengthy discussion took place regarding how and when the Commission should discuss future energy efficiency policies.  An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2013, April 23, 2013, recording located at: http://puc.sd.gov/commission/media/2013/puc04232013.mp3.

There being no further business, at the hour of 1:09 p.m. the South Dakota Public Utilities Commission meeting adjourned.

 

/S/Joy Irving
Joy Irving
Administrative Assistant
puc@state.sd.us
April 23, 2013