20231020Exhibit 4 - Direct Testimony Judd Cook.pdf

BEFORE THE PUBLIC SERVICE COMMISSION OF UTAH
In the Matter of the Joint Notice and
Application of Questar Gas Company and
Enbridge Quail Holdings, LLC for Approval of the Proposed Sale of Fall West Holdco, LLC to Enbridge Quail Holdings, LLC

Docket No. 23-057-16

DIRECT TESTIMONY OF JUDD E. COOK
FOR JOINT APPLICANTS

October 20, 2023

Joint Application Exhibit 4.0

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TABLE OF CONTENTS
I. INTRODUCTION..............................................................................................................1
II. QUESTAR GAS OWNERSHIP AND MANAGEMENT ..............................................2
III. FINANCIAL CONDITION OF QUESTAR GAS ..........................................................2
IV. QUESTAR GAS CURRENT OPERATIONS .................................................................3
V. BENEFITS OF THE TRANSACTION ...........................................................................6
VI. CONCLUSION ..................................................................................................................8

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I. INTRODUCTION 1
Q. Please state your name and business address. 2
A. My name is Judd E. Cook. My business address is 333 South State Street, Salt Lake City, 3
Utah 84145. 4
Q. By whom are you employed and what is your position? 5
A. I am employed by Questar Gas Company dba Dominion Energy Utah (“Questar Gas” or 6
“Company”) as Vice President and General Manager. I am responsible for the 900 7
employees who provide natural gas service to over 1.1 million customers in Utah, 8
Wyoming and Idaho. These employees work in many functions, including operations, 9
engineering, customer relations, regulatory and gas supply. 10
Q. What are your qualifications to testify in this proceeding? 11
A. I have been employed with the Questar Gas and/or its affiliated companies for the past 26 12
years. My qualifications are attached as Exhibit 4.01 to the Joint Application. 13
Q. What is the purpose of your testimony? 14
A. My testimony provides a summary of the current organizational structure of Questar Gas, 15
and I discuss the Company’s current goals and objectives related to operations, system 16
reliability, safety, customer satisfaction and community involvement. I also discuss the 17
proposed sale of Questar Gas and some of its affiliates to Enbridge Quail Holdings, LLC 18
(“EQ Holdings”) as defined in the Joint Application in this Docket as the “Transaction” 19
and explain why it will result in no harm, and in many cases will result in benefits to, the 20
employees, customers and communities where Questar Gas operates. 21
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Q. How will this Transaction benefit Questar Gas customers and employees? 22
A. As discussed later in my testimony, Questar Gas will continue to operate in a safe and 23
reliable manner essentially as it does today, and its new membership in the Enbridge Inc. 24
(“Enbridge”) group of companies as a result of its acquisition by EQ Holdings will provide 25
additional benefits and strengths to all stakeholders. 26
II. QUESTAR GAS OWNERSHIP AND MANAGEMENT 27
Q. Please describe the ownership structure of Questar Gas. 28
A. Questar Gas is currently a subsidiary of Dominion Energy Questar Corporation which is, 29
in turn, a subsidiary of Dominion Energy Inc. In the pending Docket No. 23-057-15, 30
Questar Gas is seeking Commission approval for a reorganization which would place 31
Questar Gas and some of its affiliates within a new holding company, in anticipation of the 32
sale contemplated in this docket. Copies of organizational charts reflecting the organization 33
both before and after that reorganization are attached to the Application in this docket as 34
Joint Exhibit 8. 35
III. FINANCIAL CONDITION OF QUESTAR GAS 36
Q. Please describe the financial condition of Questar Gas. 37
A. Questar Gas’ assets as of December 31, 2022 totaled $4.3 billion; revenues in 2022 totaled 38
$1.318 billion and net income in 2022 totaled $128.9 million. Questar Gas’ capital structure 39
as of December 31, 2022 was 45% long-term debt and 55% equity. 40
Q. Please provide a copy of Questar Gas’s financial statements. 41
A. Questar Gas’s financial statements are attached as Exhibit 4.02 to the Joint application. 42
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Q. How is long term debt provided to Questar Gas? 43
A. Questar Gas issues its own long-term debt. Questar Gas’s senior unsecured credit rating is 44
A3 with Moody’s and BBB+ with Standard and Poor’s. 45
Q. What were Questar Gas’s plans for capital expenditures for the next five years, prior 46
to the Transaction? 47
A. 48
49
Q. Will those plans change as a result of the Transaction? 50
A. No. Absent a material change in circumstances, the Transaction will not change Questar 51
Gas’ plans for capital expenditures over the next five years. 52
IV. QUESTAR GAS CURRENT OPERATIONS 53
Q. Please describe Questar Gas’s current operations. 54
A. Questar Gas provides safe and reliable natural gas service to customers in Utah, Wyoming 55
and Idaho. 56
Q. Will the approval of the Transaction have any impact on any other utility? 57
A. No. Questar Gas will continue to provide service in its certificated service territory. The 58
approval of the Transaction will not expand or otherwise change that service territory, and 59
it will not impact any other utility providing natural gas service in Utah, Wyoming or Idaho. 60
Q. Please describe your mission as a local distribution company. 61
A. As a management team, we strive to provide safe, reliable, affordable and sustainable 62
energy to our customers. 63
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Q. Is customer service an important goal of Questar Gas? 64
A. Yes. Questar Gas strives to provide courteous, professional service to its customers and to 65
be as responsive as possible to their needs. 66
Q. Does the Company track its customer satisfaction levels? 67
A. Yes, the Company uses independent third-party surveys, internal statistics, and regional 68
reporting to track customer satisfaction. The surveys are performed monthly and given to 69
randomly selected customers and customers who have recently received customer service 70
from the Company. Additionally, we have developed internal statistics and reporting that 71
allows us to monitor and measure our customer service performance. Questar Gas’ 2022 72
customer service results are attached to the Joint Application in this matter as Joint Exhibit 73
4.03. As the reports show, Questar Gas receives a high score from customers in terms of 74
responsiveness and overall satisfaction. 75
Q. Is safety an important goal to Questar Gas? 76
A. Yes, Questar Gas has a culture that encourages safety as its highest priority. Just last month, 77
Questar Gas was one of four companies to receive the “Leading Indicator Safety Award” 78
from the American Gas Association. This is the second consecutive year Questar Gas 79
received this award, which recognizes companies for the implementation of proactive 80
safety programs and initiatives. Over the years, Questar Gas has been routinely recognized 81
by AGA for having exceptionally low employee injury incident rates and preventable 82
motor vehicle accident rates. 83
In 2023, Questar Gas partnered with Perceptyx, an independent research organization, to 84
administer a Safety Culture Survey to gauge our employees’ thoughts on our safety culture. 85
In addition to the Company’s survey, this survey was conducted with many of Questar Gas’ 86
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industry peers. This is the fourth time Questar Gas has participated in such a survey since 87
2013. Results from these surveys help us identify ways to continuously improve our safety 88
culture. 89
Over the last two years, Questar Gas has implemented a new Human Performance program 90
with extensive training for all employees. Human Performance is a set of principles and 91
practical “defense” techniques that help us reduce human error. We can minimize the 92
frequency and severity of incidents by anticipating and preventing active errors, and 93
identifying and eliminating gaps in our policies, training, and culture. There are five 94
principles of our Human Performance Program: 95
1. People are fallible, and even the best people make mistakes. 96
2. Error-likely situations are predictable, manageable, and preventable. 97
3. Individual behavior is influenced by organizational processes and values. 98
4. People achieve high levels of performance largely because of the encouragement 99
and reinforcement received from leaders, peers, and subordinates. 100
5. Events can be avoided through an understanding of the reasons mistakes occur and 101
application of the lessons learned from past events (or errors). 102
Questar Gas employees begin meetings with a “safety minute” discussion about a relevant 103
and timely safety topic. Questar Gas further emphasizes safety with safety-related bonus 104
goals. Questar Gas recently showed its commitment to safety and reliability in its Utah 105
service territory by investing over $65 million per year in pipeline replacement. 106
Q. Please describe Questar Gas’ current community involvement. 107
A. Questar Gas employees are very active in their communities. In 2022, for example, Questar 108
Gas and its affiliate employees participated in 6,374 hours of service in Utah. In addition, 109
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Questar Corporation donated about $1.7 million in Utah. Questar Corporation employees 110
are also very involved in leadership and serve on boards of 63 local Utah charitable and 111
community organizations. The Company’s Education Foundation also contributes to Utah 112
colleges and universities. 113
V. BENEFITS OF THE TRANSACTION 114
Q. What benefits will come from this Transaction? 115
A. One of the main benefits of this acquisition is that our business will be part of the Enbridge 116
group of companies. Enbridge’s core competencies are natural gas, liquids pipelines, and 117
renewable energy. Affiliation with similarly situated businesses has created and will 118
continue to create benefits for Questar Gas. Additionally, there will be potential benefits 119
in safety, community involvement, energy sustainability and geographic diversity. 120
Q. Please explain in more detail how being affiliated with other LDCs has been beneficial 121
to the Company. 122
A. One of the benefits that we received from being a part of the Dominion family of companies 123
was the ability to share best practices and synergies with our affiliates who are local natural 124
gas distribution (“LDC”) companies in Ohio and North Carolina. For example, Questar 125
Gas’ LDC affiliate in Ohio, East Ohio Gas, is a center of technical excellence when it 126
comes to hot tapping. Hot tapping allows a company to perform maintenance on a pipeline 127
while there is still gas flowing in it, allowing the Company to perform the maintenance 128
without interrupting service to customers. Questar Gas has been able to use that expertise 129
on its system. Additionally, in 2022, Questar Gas experienced a shortage of meter risers 130
due to supply chain issues. The Company was able to secure the necessary risers from our 131
affiliate in North Carolina until it could acquire its own supply. This helped avoid delays 132
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in adding new customers. Questar Gas’ affiliation with these two LDCs has been extremely 133
beneficial. After the Transaction is complete, Questar Gas will enjoy benefits of affiliation 134
with Enbridge’s many companies involved in the transportation of natural gas and two 135
retail gas distribution companies, Enbridge Gas Inc. and Gazifère Inc., as well as the 136
utilities that are being acquired in North Carolina and Ohio (subject to the approval of all 137
relevant federal and state authorities). As explained by Ms. Harradence and Mr. Sanders, 138
Enbridge Gas Inc., which provides service in Ontario, has over 175 years of experience 139
and is North America’s largest natural gas utility by volume of natural gas delivered and 140
third largest by customer count with rate base in excess of C$15 billion (US$ 11 billion).1 141
Both of these companies have won numerous safety and customer service awards and by 142
working with them I am certain that Questar Gas employees will expand our knowledge 143
base and share best practices not only with two new companies, but also with other 144
companies in the Enbridge family. 145
Q. How will the Merger benefit Questar Gas’ safety culture? 146
A. As I mentioned earlier, Questar Gas currently have a strong safety culture, and this is 147
expected to continue after completion with the Transaction. 148
Q. How will the Transaction benefit community involvement? 149
Questar Gas has a history of charitable giving in the areas where it operates, and this will 150
continue with Enbridge. As the Joint Application in this docket states, EQ Holdings 151
commits, at shareholders’ expense to increase by $175,000 per year, Questar Gas’s historic 152
level of corporate contributions to charities identified by local leadership and community 153
1 All CAD to USD conversion utilized October 12, 2023 exchange rate of 1.3657.
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investments that are within Questar Gas’s service areas as well as low-income assistance 154
to Questar Gas’s customers for at least three years following completion of the Transaction. 155
Q. How does energy diversity benefit Questar Gas? 156
A. As noted in Ms. Harradence’s testimony, Enbridge manages and operates a diverse 157
portfolio of energy assets consisting of liquid pipelines, gas transmission and midstream, 158
renewable power, and a gas distribution and storage business. This diverse energy supply 159
portfolio will allow the Company to be poised in the future to take advantage of resources 160
for customers. 161
Q. How is geographic diversity a benefit to Questar Gas? 162
A. A benefit of geographic diversity is that if a natural disaster were to occur in Questar Gas’ 163
service area after the Transaction, Enbridge would have resources such as, operations and 164
management outside of the affected area. Geographic diversity allows resources to be 165
deployed to help Questar Gas manage, communication and service restoration. 166
VI. CONCLUSION 167
Q. Please describe the impact this Transaction will have on overall operations and 168
customer service? 169
A. The Transaction will allow the newly combined companies to share safety and customer 170
service best practices. I expect this will only strengthen Questar Gas’ ability to provide safe 171
and reliable service. 172
Q. Please describe the impact the transaction will have on the regulatory oversight of 173
Questar Gas? 174
A. It will remain unchanged. Questar Gas will continue to operate under the Commission’s 175
jurisdiction. 176
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Q. Are other Commissions reviewing similar applications submitted by the parties? 177
A. Yes. Questar Gas concurrently filed a Joint Application in Wyoming substantively similar 178
to the Joint Notice and Application filed in Utah and a letter of notification in Idaho. 179
Q. What is your recommendation? 180
A. I recommend the Commission approve the Joint Notice and Application. 181
Q. Does this conclude your testimony? 182
A. Yes. 183
State of Utah )
) ss.
County of Salt Lake )
I, Judd E. Cook, being first duly sworn on oath, state that the answers in the foregoing
written testimony are true and correct to the best of my knowledge, information and belief. The
exhibits attached to the testimony were prepared by me or under my direction and supervision, or
to the best of my knowledge are true and correct copies of the documents they purport to be.
SUBSCRIBED AND SWORN TO this rr?--day of October, 2023.
~-
Nota~y Public
Notary Public State of Utah
My Commtaaton Expires on:
•
RENA,ORTER
April 25, 2027
comm. NumDer: 11oso,