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South Dakota Public Utilities Commission Meeting
May 13, 2014, at 9:30 A.M. CDT
Room 413, Capitol Building
Pierre, South Dakota

MINUTES OF THE COMMISSION MEETING

Vice Chairman Chris Nelson called the meeting to order. Present were: Commissioner: Kristie Fiegen; Commission Counsel: John Smith; Commission Advisor: Greg Rislov; Staff Attorneys: Karen Cremer and Kristen Edwards; Staff Analysts: Brian Rounds, Brittany Mehlhaff, David Henry, Patrick Steffensen, and Darren Kearney; and Consumer Affairs Supervisor: Deb Gregg; Staff: Katlyn Gustafson

Also present were:
Bob Mercer, Reporter; Amy Koenig, Kimberly Nooney, Brian Iverson, Kyle White, Stever Jurek, and Jon Thurber, Black Hills Power, Inc.; Thomas Hart, Riter, Rogers, Wattier & Northrup, LLP; and Pam Bonrud and Jeff Decker, NorthWestern Corporation dba NorthWestern Energy

Joining the meeting by telephone were:
Commissioner: Gary Hanson; Troy Kwasniewski, H-D Electric Cooperative, Inc.; Ron Gogolin, Patsy Pahut, Deb Young and Bill Thomas, NorthWestern Corporation dba NorthWestern Energy; Julie Musselman Oost, Airus, Inc.; Meredith Moore, Cutler & Donahoe, LLP, representing Midstate Communications, Inc.; Phillip Schenkenberg, Briggs and Morgan, PA., representing Sprint Communications Company, LP; Rich Coit, South Dakota Telecommunications Association; Michael Fredrich, Black Hills Power, Inc.; Matt Eldridge, Oahe Electric Cooperative, Inc.; Ronda Hiller, Onida Municipal Electric; and . Geri Coyne, Otter Tail Power Company

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

Administration

1.     Approval of the Minutes of the Commission Meetings Held on April 15, and April 30, 2014 (Staff: Joy Lashley)

     Commissioner Fiegen moved to approve the minutes of the Commission meetings held on April 15, and April 30, 2014. 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 76 contacts since the last report was prepared for the April 30, 2014 Commission meeting.

14 of the contacts involved telecommunication services, 32 of the contacts involved electrical services, 6 of the contacts involved natural gas service, 3 contacts involved cell phone service, 11 contacts were related to the Do Not Call Registry, 2 contacts were related to One Call, 1 contact was related to the Grain Warehouse Division and 7 contacts were related to issues not regulated by the PUC.

709 of the 738 complaints received in 2014 have been resolved.

Electric

1.     EL14-013     In the Matter of the Application of Black Hills Power, Inc. for Approval of Transmission Facilities Adjustment (Staff Analysts: Brittany Mehlhaff, Patrick Steffensen, Robin Meyerink; Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding docket EL14-013. An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2014, May 13, 2014, recording located at: http://puc.sd.gov/commission/media/2014/puc05132014.mp3

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

2.     EL14-015     In the Matter of the Request for Approval of an Electric Service Territory Boundary Agreement between Oahe Electric Cooperative, Inc. and Onida Municipal Electric (Staff Analyst: David Henry; Staff Attorney: Kristen Edwards)

3.     EL14-022     In the Matter of the Request for Approval of an Electric Service Territory Boundary Agreement between Langford Municipal Electric and NorthWestern Corporation dba NorthWestern Energy (Staff Analyst: David Henry; Staff Attorney: Kristen Edwards)

4.     EL14-023     In the Matter of the Request for Approval of an Electric Service Territory Boundary Agreement between Langford Municipal Electric and Lake Region Electric Association, Inc. (Staff Analyst: David Henry; Staff Attorney: Kristen Edwards)

5.     EL14-025     In the Matter of the Request for Approval of an Electric Service Territory Boundary Agreement between Estelline Municipal Electric and H-D Electric Cooperative, Inc. (Staff Analyst: David Henry; Staff Attorney: Kristen Edwards)

Mr. David Henry, staff analyst, recommended that the Commission approve the proposed electric service territory boundary agreements in the above dockets.

     In Dockets EL14-015, EL14-022, EL14-023, and EL14-025, Commissioner Hanson moved to approve the proposed electric service territory boundary agreements. Motion carried 3-0.

6.     EL14-029     In the Matter of the Joint Request for Service Rights Exception between Otter Tail Power Company and Lake Region Electric Association, Inc. (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Ms. Geri Coyne, Otter Tail Power Company (Otter Tail), requested that the Commission approve its service rights exception between Otter Tail and Lake Region Electric Association, Inc. (Lake Region). Ms. Coyne stated that Lake Region's provision of the three-phase electric service to the customer will avoid unnecessary duplication of facilities, provide adequate electric service to the customer affected, and promote the efficient and economical use and development of Lake Region and Otter Tail's electric systems. Ms. Kristen Edwards, staff attorney, recommended that the Commission grant approval of the request.

     Commissioner Fiegen moved to approve the joint request for service rights exception between Otter Tail Power Company and Lake Region Electric Association, Inc. Motion carried 3-0.

7.     EL14-034     In the Matter of the Application of Black Hills Power, Inc. for an Order Authorizing it to Issue up to $110 Million in Additional First Mortgage Bonds. (Staff Analyst: Brittany Mehlhaff; Staff Attorney: Karen Cremer)

Mr. Brian Iverson, Black Hills Power, Inc., (BHP) asked that the Commission authorize BHP to issue up to $110 million in additional first mortgage bonds. Ms. Brittany Mehlhaff, staff analyst, recommended that the Commission authorize BHP to issue up to $110 million in additional first mortgage bonds, with the conditions that Commission authorization does not constitute the Commission's determination of any utility ratemaking issues and that the issuance of securities does not mean that the Commission is in any way prohibited at some future date from finding BHP's capital structure in need of adjustment.

     Commissioner Hanson moved to authorized to issue up to $110 million in additional First Mortgage Bonds, subject to the conditions that Commission authorization does not constitute the Commission's determination of any utility ratemaking issues and that the issuance of securities does not mean that the Commission is in any way prohibited at some future date from finding BHP's capital structure in need of adjustment. Motion carried 3-0.

8.     EL14-037     In the Matter of the Application of Black Hills Power, Inc. for Approval of its Environmental Improvement Adjustment (Staff Analyst: Brittany Mehlhaff; Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding docket EL14-037. An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2014, May 13, 2014, recording located at: http://puc.sd.gov/commission/media/2014/puc05132014.mp3

     Commissioner Nelson moved to assess a filing fee up to the amount of $50,000 to account for actual expenses incurred in review of this filing commencing from the filing date and to approve the 2014 Environmental Improvement Adjustment, including the associated tariff sheet and revised rates, with an effective date of June 1, 2014, and approve BHP's request to credit/charge the remaining EIA balancing account amounts through the Transmission Facilities Adjustment. Motion carried 2-1. Commissioner Fiegen dissented.

9.     EL14-038     In the Matter of the Application of Black Hills Power, Inc. for Approval to Extend Its Energy Efficiency Solutions Plan (Staff Analysts: Darren Kearney, Brian Rounds; Staff Attorney: Kristen Edwards)

Ms. Amy Koenig, Black Hills Power, Inc. (BHP), asked that the Commission approve its application for approval to Extend its Energy Efficiency Solutions Plan and also approve its revised EESA Tariff.  Mr. Brian Rounds, staff analyst, recommended that the Commission grant approval.

     Commissioner Fiegen moved to approve the Application of Black Hills Power, Inc. for Approval to Extend its Energy Efficiency Solutions Plan and approve the revised EESA Tariff. Motion carried 3-0.

Gas and Electric

1.     GE12-001     In the Matter of the Filing by NorthWestern Corporation dba NorthWestern Energy for Approval of Tariff Revisions to its South Dakota Demand Side Management Plan  (Staff Analyst: Brian Rounds; Staff Attorney: Karen Cremer)

A lengthy discussion took place regarding docket GE12-001. An audio of the discussion can be found on the PUC website under Commission Actions, Commission Meeting Archives, 2014, May 13, 2014, recording located at: http://puc.sd.gov/commission/media/2014/puc05132014.mp3

     Docket deferred until next Commission meeting.

Telecommunications

1.     TC11-087     In the Matter of the Application of Native American Telecom, LLC for a Certificate of Authority to Provide Interexchange Telecommunications Services and Local Exchange Services in South Dakota (Staff Analyst: Patrick Steffensen; Staff Attorney: Karen Cremer)

     Commissioner Hanson moved to grant NAT a certificate of authority to provide local and interexchange services within the Fort Thompson exchange. Commissioner Hanson stated NAT has shown that it has sufficient technical, financial, and managerial capabilities to offer telecommunications services in the Fort Thompson exchange. The Commission is limiting the service area to the Fort Thompson exchange based on the Stipulation entered into among NAT, Midstate, and SDTA. Consistent with this Stipulation, Commissioner Hanson further moved that the Commission grant NAT a waiver of ARSD 20:10:32:15 pursuant to ARSD 20:10:32:18. Commissioner Hanson stated that he believed that the Commission does not have primary regulatory authority over the provisioning of services by NAT to Tribal members on the reservation. In addition, pursuant to the Stipulation entered into between CenturyLink and NAT, Commissioner Hanson moved that the Commission include in its Order, NAT's commitment regarding a direct connection to CenturyLink. Commissioner Hanson further noted that NAT submitted an updated state sales tax number, and NAT also filed a new Certificate of Authority from the Secretary of State. Commissioner Hanson moved that, to the extent necessary, the Commission take judicial notice of the filing. Motion carried 3-0.
                                 
2.     TC14-009     In the Matter of the Filing by Airus, Inc. for Approval of its Access Service Tariff No. 1 (Staff Analyst: Eric Paulson; Staff Attorney: Kristen Edwards)

Ms. Kristen Edwards, staff attorney, recommended that the Commission grant approval of Airus, Inc.'s request to approve its Access Services Tariff No. 1.

     Commissioner Fiegen moved to approve Airus, Inc.'s Access Services Tariff No. 1 effective April 27, 2014. Motion carried 3-0.

3.     TC14-013     In the Matter of the Filing by Metropolitan Telecommunications of South Dakota, Inc. for Approval of Revisions to its Access Tariff No. 2 (Staff Analyst: Robin Meyerink; Staff Attorney: Karen Cremer)

Ms. Karen Cremer, staff attorney, stated that the Commission does not regulate the services in the revised tariffs submitted by Metropolitan Telecommunications of South Dakota, Inc. Ms. Cremer recommended that the Commission grant the request to withdraw the docket.

     Commissioner Nelson moved to approve the withdrawal of this docket.  Motion carried 3-0.

Items for Commission Discussion

1.     Following a brief discussion of the two options set forth in the Memorandum filed by Commission Counsel Smith on May 5, 2014, for the process to be followed under ARSD 20:10:26:04(6), Vice Chairman Nelson moved that the Commission open a docket to pursue an administrative policy to cover the process. Chairman Hanson offered a substitute motion that the Commission open an administrative docket to consider issuing an order that will provide a procedure for the Commission's administrative process in determining when individual metering is not required as set forth in ARSD 20:10:26:04(6) and that Commission Counsel Smith's Memorandum be filed in such docket as a beginning point for the Commission's consideration of what process should be established through such an administrative order. Vice Chairman Nelson did not object to the Chairman Hanson's substitute motion, and the Commission voted unanimously in favor of it.

There being no further business, at the hour of 11:53 a.m. the South Dakota Public Utilities Commission meeting adjourned.

/S/Joy Lashley
Joy Lashley
Administrative Assistant
puc@state.sd.us
May 13, 2014