20160325Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM: DON HOWELL
DEPUTY ATTORNEY GENERAL
DATE: MARCH 25, 2016
SUBJECT: RENEWAL OF THE COMMISSION’S REGULATORY CONTRACT WITH
THE UTAH PUBLIC SERVICE COMMISSION REGARDING QUESTAR GAS,
CASE NO. QST-G-16-01
In August 1990 the Commission issued Order No. 23282 granting a Certificate of Public
Convenience and Necessity to Questar Gas Company’s predecessor, Mountain Fuel Supply Company.
The Commission’s Certificate authorized Questar to serve customers in Franklin County with natural
gas utility services. Order No. 23282 also approved “a regulatory service contract” with the Utah
Public Service Commission pursuant to Idaho Code § 61-505. This section allows the Idaho
Commission “to contract with regulatory agencies of neighboring states . . . [to] set rates and charges
for customers in Idaho located in or nearby border communities served by utilities principally located
in” neighboring states. The Idaho Commission found in its Order approving the contract:
that the provision of utility service to small border communities by a willing out-of-
state utility can be facilitated by entering into a regulatory service contract with a
regulatory agency of the neighboring state in which the utility has greater presence.
Such contracts reduce the regulatory costs to the utility and enhance the expansion
of [utility] service across state boundaries.
Order No. 23282 at 3.
On March 3, 2016, Questar filed a “Notice of Agreement and Plan of Merger” between
itself and Dominion Resources, Inc. dated January 31, 2016. In its Notice, the parties assert that
Dominion Resources will acquire Questar Corporation and change the name of the utility serving
Idaho to Dominion Questar Gas. The gas utility “will continue its tradition of providing safe and
reliable service at reasonable costs to its customers in Utah, Idaho and Wyoming. Regulation of
Questar Gas will not be affected by the Merger.” Transmittal Letter at 1-2. Given the pending
transaction between Dominion and Questar, Staff believes there is a need to update the 1990 regulatory
contract between the Utah and Idaho Commissions. Earlier this month the Idaho Staff submitted an
DECISION MEMORANDUM 2
updated draft regulatory contract for review by the Utah Commission. The Utah Commission opened a
docket inviting public comment on the proposed contract on March 11, 2016. No comments were filed
in the Utah docket and the President of the Utah Commission executed the contract and returned it on
March 23, 2016.
UPDATED CONTRACT
Attached for your review is the updated regulatory contract between the two Commissions.
The updated contract removes all references to “Mountain Fuel Supply Company”; updates citations
concerning references to the Idaho Commission’s winter moratorium Rule 306, IDAPA 31.21.01.306,
and provides that the contract shall be renewed automatically each year on April 1 subject to
termination by either party upon written notice. The new contract also deleted a provision regarding
the sharing of Idaho regulatory fees for Questar. Staff recommended deleted this clause because the
Idaho Commission Staff currently performs natural gas safety inspections for Questar – authority that
Idaho did not exercise when the regulatory contract was first initiated in 1990. The attached contract
makes other minor changes regarding notice provisions and other formatting changes.
STAFF RECOMMENDATION
Staff recommends that the Commission make the necessary finding (below from 61-
505(3)) and execute the updated regulatory contract. If signed a copy of the executed contract will be
forwarded to the Utah Commission for its records.
COMMISSION DECISION
Does the Commission find:
1. The continued provision of utility service by Questar is in the public interest;
2. It is impractical or not in the public interest for the Idaho Commission to regulate the
utility principally-located in a neighboring state;
3. That Idaho affected residents have full right of participation before the Utah Public
Service Commission and exercise the same rights as customers in Utah; and
4. The rates, charges and services regulation for Idaho customers are not less favorable
than those in Utah. Does the Commission approve the attached regulatory contract?
bls/M:QST-G-16-01_don