20160919_5071.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM: BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
DATE: SEPTEMBER 15, 2016
SUBJECT: QUESTAR GAS AND DOMINION RESOURCES MERGER
AGREEMENT, CASE NO. QST-G-16-01
Following extensive negotiations relating to the above captioned merger, Staff signed
onto a Settlement Stipulation that concluded the regulatory approval process before the Utah
Public Service Commission (PSC). Th e PSC’s adoption of the Stipulation grants regulatory
approval of the merger in Utah and a portion of Franklin County, Idaho. While the merger
Application is not before the Idaho Commission, Staff represented Idaho interests during
negotiations. Staff now requests that the Commission issue notice of the Settlement Stipulation
and allow Idaho customers affected by it an opportunity to comment. At the conclusion of the
comment period, if Commission deems it appropriate, Staff recommends adoption of the
Stipulation and that this matter be closed.
BACKGROUND
Questar’s operations are almost entirely in Wyoming and Utah. Franklin County,
Idaho is the only area outside those states served by Questar. Franklin County is located on the
Idaho-Utah border. Its small population and unique geography make the number of customers
served by Questar low with service coming out of Utah. Accordingly, in August 1990, the
Commission approved “a regulatory service contract” with the Utah PSC pursuant to Idaho Code
§ 61-505, allowing the Utah PSC regulatory authority over Questar operations in Idaho. Order
No. 23282.
On March 3, 2016, Questar filed a copy of its “Notice of Agreement and Plan of
Merger” between itself and Dominion Resources, Inc. that was filed in front of the Utah PSC.
Therein, the parties gave notice that Dominion Resources would acquire Questar Corporation.
DECISION MEMORANDUM 2
Dominion stated that it “will continue its tradition of providing safe and reliable service at
reasonable costs to its customers in Utah, Idaho and Wyoming.” According to the Companies,
regulation of Questar Gas will not be affected by the merger. Transmittal Letter at 1-2.
In April 2016, in anticipation of the underlying merger, the Commission updated its
contract with the Utah PSC. The updated contract removed references to Questar’s predecessor,
Mountain Fuel Supply Company, included reference to the Commission’s winter moratorium
Rule 306, and provided a mechanism for automatic renewal or the service contract. IDAPA
31.21.01.306
Additionally, Idaho customers served by Questar were notified of the proposed
merger on multiple occasions through press releases and direct communications—in February,
March, and May 2016. Both Companies also posted the information on their web sites. Under
the agreement between the Commission and the Utah PSC, customers in Idaho were able to
participate in the case before the PSC.
After filing the Application, Questar and Dominion convened settlement negotiations
with the Utah Division of Public Utilities, the Utah Office of Consumer Services, the Utah
Governor’s Office of Energy Development, and other interested parties. Commission Staff
participated in these negotiations and represented Idaho interests. The parties spent considerable
time over several months discussing the merger and its effect on ratepayers. On August 15,
2016, the parties concluded negotiations and signed onto a Settlement Stipulation.
SETTLEMENT STIPULATION
Attached for your review is the Settlement Stipulation now before the Commission.
The terms of the Stipulation include provisions relating to company management, employment
matters, regulatory and financial terms, customer rates, allocation of transaction-related costs,
customer standards, and ring fencing provisions. Idaho Commission Staff is a signatory to the
Settlement Stipulation.
STAFF RECOMMENDATION
Staff recommends that the Commission issue notice of the Settlement Stipulation,
implement a ten-day customer comment period, and after that time, if appropriate, issue an Order
adopting the Settlement Stipulation and close this docket.
DECISION MEMORANDUM 3
COMMISSION DECISION
Does the Commission wish to:
1. Issue notice of the Settlement Stipulation;
2. Implement a ten-day public comment period; and
3. At the appropriate time, adopt the Settlement Stipulation entered into by Staff?

M:QST-G-16-01_bk