Exhibit 10.55
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
STATE OF ALASKA
THE REGULATORY COMMISSION OF ALASKA
Before Commissioners: Anthony A. Price, Chairman
Kate Giard
Dave Harbour
Mark K. Johnson
Janis W. Wilson
In the Matter of the Tariff Revision, Designated as)
TA279-8, Filed by CHUGACH ELECTRIC ASSOCIATION,) U-06-134
INC. for a Rate Increase and Rate Redesign )
) ORDER NO. 15
- ---------------------------------------------------)
ORDER ACCEPTING SETTLEMENT AGREEMENTS,
AMENDING PROCEDURAL SCHEDULE,
AND PERMITTING SUPPLEMENTAL TESTIMONY
BY THE COMMISSION:
Summary
We accept the settlement agreement filed by Chugach Electric
Association, Inc. (Chugach), Homer Electric Association, Inc. and Alaska
Electric and Energy Cooperative, Inc. (HEA), and the Attorney General (AG). We
accept the settlement agreement filed by Chugach and the City of Seward
(Seward). We modify the procedural schedule of this docket and permit
supplemental testimony.
Background
We suspended in part the tariff advice filing designated as TA279-8
filed by Chugach.(1) We granted petitions to intervene filed by HEA, Matanuska
Electric
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(1) Order U-06-134(1), Order Suspending Tariff Filing; Approving, In Part,
Materials Filed in Support of Tariff Filing; Granting Petitions to Intervene;
Inviting Intervenors; Designating Commission Panel; and Appointing
Administrative Law Judge, dated December 4, 2006 (Order U-06-134(1)).
U-06-134(15) - (08/09/2007)
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
Association, Inc. (MEA), and Seward.(2) The Attorney General (AG) filed a notice
of election to participate.(3) We also granted the petition to intervene of Ray
Kreig (Kreig).(4)
We established a procedural schedule for prefiling of testimony and
a public hearing commencing on August 6, 2007.(5) On July 27, 2007, Chugach,
HEA, and the AG(6) filed a request that we accept a Joint Settlement
agreement(7) reached among those parties and grant certain scheduling relief,
accompanied by a motion for expedited consideration.(8) We granted in part the
motion for expedited consideration, required the filing of any oppositions to
the request to accept the Joint Settlement to be filed by July 30, 2007, and
scheduled a prehearing conference on July 31, 2007, to allow the Settling
Parties an opportunity to respond to any oppositions.(9) Seward filed a response
to the Joint Request(10) and MEA filed an opposition.(11) Seward then filed a
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(2) Order U-06-134(1).
(3) Notice of Election to Participate, dated November 28, 2006.
(4) Order U-06-134(8), Order Granting in Part Petition to Intervene, dated
February 28, 2007.
(5) Order U-06-134(3), Order Establishing Procedural Schedule, dated
January 23, 2007.
(6) Chugach, HEA, and the AG are referred to as the "Settling Parties."
(7) The terms of settlement are embodied in a Memorandum of Agreement
among the Settling Parties dated July 27, 2007, and resolve all contested issues
in this docket among the Settling Parties (Joint Settlement). The Joint
Settlement is attached to this order as Appendix A.
(8) Joint Notice of Filing of Settlement Among Chugach, Homer and RAPA,
Request to Accept Settlement and Motion for Scheduling Relief (Joint Request)
and Motion for Expedited Consideration, both filed July 27, 2007.
(9) Electronic ruling, dated July 30, 2007.
(10) City of Seward's Response to Joint Notice of Settlement, Joint
Request to Accept Settlement, and Joint Motion for Scheduling Relief, filed July
30, 2007.
(11) Opposition of Matanuska Electric Association, Inc. to Joint Request
to Accept Settlement and Motion for Scheduling Conference, filed July 30, 2007
(Opposition).
U-06-134(15) - (08/09/2007)
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
notice of a separate settlement agreement(12) reached with Chugach (Seward
Settlement) which incorporates by reference the terms of the Joint
Settlement.(13) Replies were received to MEA's Opposition at the prehearing
conference held on the afternoon of July 31, 2007.
Discussion
The Settling Parties invoke AS 42.05.191(14) and 3 AAC 48.166(15) as
authority for our acceptance of a settlement.(16) Under 42.05.191 we will
provide the opportunity for a hearing to non-settling parties. Under 3 AAC
48.166 we assess the settlements with respect to whether they are in the public
interest and consistent with
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(12) The terms of settlement are memorialized in a Settlement Agreement
Between Chugach and City of Seward, dated July 31, 2007, and resolve all
contested issues in this docket between Chugach and Seward. The Seward
Settlement is attached as Appendix B to this order.
(13) Notice of Filing of Seward Settlement Agreement, filed July 31, 2007.
(14) AS 42.05.191 states in part:
Every formal order of the commission shall be based upon the facts of
record. However, the commission may, without a hearing, issue an order
approving any settlement supported by all the parties of record in a
proceeding, including a compromise settlement.
(15) 3 AAC 48.166 states in part:
Parties may stipulate among themselves to the disposition of a proceeding
or to the disposition of outstanding issues in a proceeding by written
agreement filed with the commission or by oral statement presented on the
record. The parties are bound by the terms of the stipulation if the
commission accepts it. The parties may present a statement of the facts
supporting the stipulation. The commission is not bound to adopt a
stipulation by the parties. The commission will, in its discretion,
require evidence to support a finding that the stipulation is in the
public interest and consistent with controlling law.
(16) Joint Request at 4.
U-06-134(15) - (08/09/2007)
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
controlling law. In addition, because the settlements do not include all parties
to this docket, we also consider whether our acceptance of the settlements may
materially prejudice the rights of non-settling parties.
As discussed in greater detail below, we find that the settlements
are in the public interest and consistent with controlling law. In addition,
although we do not believe we are required to do so in this situation, we
nevertheless adopt certain procedural provisions to assure that our acceptance
of the settlements will not materially prejudice the rights of the non-settling
parties.
The Public Interest
We find that acceptance of the Joint Settlement and the Seward
Settlement (together the "Settlements")(17) is in the public interest. The terms
of the Settlements result in rates to retail and wholesale customers that are
lower than the rates proposed by Chugach and involve a compromise of contested
issues and positions taken by the Settling Parties in their prefiled
testimony.(18) The Settling Parties and Seward are sophisticated persons
represented by competent counsel, and are comprised of representatives of the
utility and its retail and wholesale customers, including the AG as the
representative of the public interest and of retail customers.(19) Acceptance of
the Settlements will likely save the Settling Parties and Seward the
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(17) The Settlements are attached as appendices to this order.
(18) The Settling Parties requested the opportunity to file a supplement
to the Joint Settlement, referred to as a "compliance filing" to further refine
the calculations which underlie the rates and other terms of settlement. We
include this future filing within the term "Joint Settlement." Tr. at 131-132,
151.
(19) Tr. at 126-127, 155-156.
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
considerable time and expense of continuing litigation of this docket and will
also economize on our resources in hearing and deciding contested issues.(20)
Prejudice to the Interest of Non-settling Parties
The Settlements are binding only upon the parties that agreed to
their terms. The Settlements do not require the non-settling parties to do or
not to do anything. The Settlements resolve the issues in this docket among the
Settling Parties and Seward but explicitly do not establish binding precedent or
prevent any party or non-party from taking any position in future dockets.
Non-settling parties retain the right to a hearing to present their evidence and
cross-examine Chugach witnesses. We are not restricted by the Settlements in our
review and determination of remaining contested issues raised by non-settling
parties. Therefore we find that acceptance of the Settlements will not
materially prejudice the rights of the non-settling parties.
Kreig takes no position regarding our acceptance of the
Settlements.(21) MEA agrees that the Settlements by their terms do not affect
MEA, but nonetheless MEA raises two concerns about possible prejudicial effect
of acceptance of the Settlements.(22) The first is the possible impact of a
contract it has with Chugach that establishes a relationship between Chugach's
retail rates and the wholesale rate it may charge MEA. Also MEA expected HEA
witnesses to carry the burden of contesting certain depreciation issues. If HEA
witnesses do not testify at hearing regarding those
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(20) We encourage parties to explore stipulations and settlements that
narrow the scope or eliminate the need for litigation. Consistent with this
policy, we encourage Chugach and MEA to use the time before the rescheduled
hearing to explore a possible stipulation or settlement of contested issues. We
offer the services of a settlement judge if desired by the parties.
(21) Kreig made no filing with respect to the Settlements and attended but
made no substantive statements at the July 31, 2007, prehearing conference.
(22) Tr. at 168-169, 179, 188, 192.
U-06-134(15) - (08/09/2007)
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
certain issues, then MEA would want an opportunity to provide testimony of its
own contesting depreciation issues.
Although MEA had the opportunity to raise any issue it desired to
litigate in its prefiled testimony, it failed to raise either of the two
concerns it now raises. While the Settlements may have been unanticipated by
MEA, they were not unforeseeable. Nonetheless, hearing testimony from MEA and
Chugach on these two concerns will result in a more complete record on which to
base our decision. In our bench rulings of July 31, 2007, we provided MEA with
an opportunity to present supplemental testimony on these two concerns, and
postponed the beginning of the hearing by several weeks.
Commission Determination
For the above reasons we grant the Request and accept the
Settlements subject to the express condition that no issue should be considered
to have been finally determined or adjudicated by virtue of our acceptance of
the Settlements.(23) By accepting the Settlements, we determine that, except for
refinements that may be made by the Settling Parties in a supplement to the
Joint Settlement, the Total Revenue Requirements for Chugach Retail
($82,115,761), for HEA ($11,697,250), and for Seward ($1,293,861), as shown on
Exhibit B to the Joint Request, will be the contributions made by those entities
toward the Chugach System Total revenue requirement.(24) The revenue requirement
responsibility of MEA is not determined by this order. Whatever final
determination we make of the MEA revenue requirement will not affect the revenue
requirement established in this order for HEA, Seward, and the Chugach retail
customers as a result of our acceptance of the Settlements.
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(23) Tr. at 194.
(24) Id. at 151, 165-166.
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
We memorialize the procedural changes made in the July 31, 2007,
bench rulings as follows:
1. All filing requirements of parties during the week of July 30, 2007
are stayed.(25)
2. Chugach shall file a supplement to the Joint Settlement by August
10, 2007.(26)
3. By August 17, 2007, MEA may file supplemental prefiled
testimony.(27)
4. By August 22, 2007, Chugach may file prefiled testimony responsive
to the MEA supplemental prefiled testimony.
The bench ruling established a hearing date for the week of August
27, 2007. Upon further consideration we reschedule the hearing for the week of
September 10, 2007.(28) In addition to these procedural changes, we require
Chugach and the non-settling parties to file a statement of issues.
ORDER
THE COMMISSION THEREFORE ORDERS:
1. The settlement filed on July 27, 2007 by Chugach Electric
Association, Inc.; Alaska Electric and Energy Cooperative, Inc. and Homer
Electric Association, Inc.; and the Regulatory Affairs and Public Advocacy
section of the Office of the Attorney
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(25) Tr. 209.
(26) Id. at 206.
(27) ld.
(28) If the parties desire a different date for the public hearing, they
may request a later hearing date. Due to other dockets pending before us, a
later hearing date is not feasible until after January 1, 2008. If the parties
desire a hearing date that does not allow us at least 90 days after the close of
hearing to complete a final order before the December 29, 2007, statutory
deadline, they must all consent to an extension of the statutory deadline. If
the week of September 10, 2007, is a problem for only a limited number of
witnesses, it may be possible to take their testimony on a day shortly before or
after the week of September 10, 2007.
U-06-134(15) - (08/09/2007)
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Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
General is accepted, subject to the express condition that no issue should be
considered to have been finally determined or adjudicated by virtue of our
acceptance of the settlement.
2. The settlement filed on July 31, 2007, by Chugach Electric
Association, Inc., and the City of Seward is accepted, subject to the express
condition that no issue should be considered to have been finally determined or
adjudicated by virtue of our acceptance of the settlement.
3. With the exception of the new hearing date, the July 31, 2007,
bench rulings amending the procedural schedule are affirmed.
4. Ordering Paragraphs I, m, and n of Order U-06-134(3) are vacated.
5. The following procedural schedule is established:
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a. 4:00 pm August 10, 2007 Chugach Electric Association, Inc., shall file a supplement
to the settlement filed on July 27, 2007.
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b. 4 p.m. August 17, 2007 Matanuska Electric Association, Inc., may file supplemental
prefiled testimony on the issues of Chugach Electric
Association, Inc.'s depreciation rates and the possible
impact of any written agreements it has with Chugach
Electric Association, Inc. that establishe a relationship
between retail rates of Chugach Electric Association, Inc.
and the wholesale rate it may charge Matanuska Electric
Association, Inc.
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c. 4 p.m. August 22, 2007 Chugach Electric Association, Inc., may file prefiled
testimony responsive to the supplemental prefiled testimony
filed on August 17, 2007.
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d. 4 p.m. September 5, 2007 Chugach Electric Association, Inc. and Matanuska Electric
Association, Inc. shall each file a statement of issues.
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Page 8 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
- ------------------------------------------------------------------------------------------------
e. 9:00 am September 10, 2007 Hearing commences in RCA's East Hearing Room, 701 West
Eighth Avenue, Suite 300, Anchorage, Alaska and continues
as necessary through September 18, 2007.(29)
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DATED AND EFFECTIVE at Anchorage, Alaska, this 9th day of August, 2007.
BY DIRECTION OF THE COMMISSION
(Commissioner Dave Harbour dissenting in part and concurring in part; and
Janis W. Wilson, not participating.)
(SEAL)
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(29) If you are a person with a disability who may need a special
accommodation, auxiliary aid, or service or alternative communication format in
order to participate in the hearing, please contact Joyce McGowan at
1-907-276-6222, toll free at 1-800-390-2782, or TTY at 1-907-276-4533, or send
your request by electronic mail to rca.mail@alaska.gov, at least three business
days before the hearing to make the necessary arrangements.
Any party wishing to appear telephonically at the hearing must advise us
in advance and provide a telephone number where it may be reached for that
appearance.
U-06-134(15) - (08/09/2007)
Page 9 of 9
MEMORANDUM OF AGREEMENT
This Agreement entered into this 27th day of July, 2007, among Homer
Electric Association, Inc. ("HEA"), Chugach Electric Association, Inc.
("Chugach"), and the Attorney General for the State of Alaska representing the
Regulatory Affairs and Public Advocacy staff ("RAPA"). The parties are involved
in Docket No. U-06-134 (the "Docket") before the Regulatory Commission of Alaska
("Commission"). They have agreed to resolve the issues in the Docket as set
forth below, subject to the approval of the Commission.
With respect to the Docket, the parties agree to resolve the issues therein by
agreeing that the rate for wholesale power paid by HEA will be based on a
revenue requirement calculated assuming the following adjustments. Accordingly
the parties agree to the following adjustments and terms.
1. 68% G&T/32% Distribution allocation of interest on long term debt and for
the calculation of TIER.
2. Accept proposals in Section I of Chugach's letter of July 17, 2007 as
follows:
a. G&T TIER at 1.10
b. Reduction to expense levels in Revenue Requirement
i. AG deferral/surcharge proposals.
ii. Reduced annual expense level reflecting AG proposal.
c. Depreciation expense
i. No change to G&T net salvage rates approved in U-04-102.
ii. Cooper Lake 50 year remaining life (2057 retirement date)
iii. Beluga Unit 5 2017 retirement date
iv. In addition, see Item 5 below regarding Beluga Unit 8.
3. Amortize Beluga compression costs over 10 years.
4. Accept HEA's recommendation on the North submarine cable field, or, in
other words, no change in present life. No change to 40-S3 survivor curve for
North submarine cable field.
5. Review the Beluga Unit 8 refurbishment/retirement issue once more
information is known after Chugach's next Depreciation Study in 2008. This
review will probably take place in 2009. Subject to the realization of Chugach's
current plans for unit retirement, the Beluga Unit 8 life of 2014 will be
provisionally accepted until the next Depreciation Study.
6. Make an adjustment reclassifying G&T and O&M expenses in accordance with
one-half the impact of JAM-6.
7. Pursuant and subject to the terms and conditions of the Settlement
Agreement and Mutual Releases dated June 13, 2007 between Chugach and Matanuska
Electric Association, Inc., Chugach agrees to use the phrase "Temporary
Intracompany Non Interest Bearing Balance" instead of "Due to Distribution from
G&T" and "Due from G&T to Distribution" to refer to offsetting intra-company
accounts reflected on any future publication of Chugach's unbundled
EXHIBIT A
Page 1 of 2
U-06-134(15)
Appendix A
Page 1 of 3
balance sheet. Chugach further agrees to include the following explanatory note
when using the term "Temporary Intracompany Non Interest Bearing Balance":
"Temporary Intracompany Non Interest Bearing Balance" does not represent
a debt or payable owed by any Chugach customer.
HEA does not agree with Chugach's unbundling methodology, but will accept the
allocation of long term interest expense as noted in Item 1 above.
8. Accept Chugach's new labor allocators and present cost allocation until
the next rate case.
9. HEA and Chugach agree to meet and confer in advance of proposing any
changes to the Cost Allocation Manual.
10. In the event Chugach files a rate case based on a 2007 or 2008 TY, both
parties agree that the 68% G&T/32% Distribution allocation of interest on long
term debt for the calculation of TIER will be applied to the HEA revenue
requirement. Regardless of this agreement, the Commission retains the discretion
to determine a just, fair, and reasonable allocator for long term interest
expense, and the Attorney General retains the discretion to assert any position
deemed by the Attorney General to be supported by the evidence and consistent
with the public interest.
11. HEA's and the Attorney General's prefiled testimony will be filed with the
Commission for the sole purpose of supporting the settlement reached herein, and
for no other purpose.
12. Nothing in this agreement is deemed to constitute an amendment to the HEA
Power Sales Agreement.
13. The parties enter into this Agreement for the sole purpose of resolving
all issues in this rate case. Subject to the forgoing specific restrictions
relating to the interest expense allocator, this Agreement does not prevent the
parties from presenting or arguing their respective positions on the same or
similar issues in future cases. This Agreement is binding on the Parties for the
purposes of this docket only and will have no binding or precedential effect.
Dated this 27th day of July, 2007.
CHUGACH ELECTRIC ASSOCIATION, TALIS J. COLBERG
INC. ATTORNEY GENERAL
By: /s/ William R. Stewart By: /s/ Steve Devries
------------------------------- ----------------------
HOMER ELECTRIC ASSOCIATION, INC. Steve Devries
Assistant Attorney General
By: /s/ Bradley Janorschke
-------------------------------
EXHIBIT A
Page 2 of 2
U-06-134(15)
Appendix A
Page 2 of 3
2
SETTLEMENT ANALYSIS
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Revenue Requirement Adjustments (approximations)
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Chugach Wholesale G&T
Chugach -----------------------------------------------------
Source System Total Retail Wholesale HEA MEA SES
---------------------------------------------------------------------------------
RAPA (approximate) (1) Exhibit JKF-2 $ (1,026,449) $ (703,374) $ (323,074) $ (125,111) $ (183,688) $ (14,276)
Depr Adj NHH $ (2,528,707) $ (1,472,165) $ (1,056,542) $ (367,667) $ (649,852) $ (39,024)
1.10 G&T TIER with 68% G&T Debt JAM & RWC $ -- $ -- $ -- $ -- $ -- $ --
Long-Term Interest $ -- $ 563,611 $ (563,611) $ (195,818) $ (346,109) $ (21,683)
Margin $ -- $ 908,808 $ (908,808) $ (315,580) $ (557,789) $ (35,439)
Beluga Gas Compressor - 10 yr
amortization $ (370,000) $ (183,596) $ (186,404) $ (78,098) $ (99,519) $ (8,787)
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Subtotal $ (3,925,156) $ (886,716) $ (3,038,439) $ (1,082,274) $ (1,836,957) $ (119,208)
Reclassification of G&T Expenses
- Approx half of JAM proposal JAM $ -- $ 92,089 $ (92,089) $ (263,118) $ 212,911 $ (41,882)
---------------------------------------------------------------------------------
Total $ (3,925,156) $ (794,627) $ (3,130,528) $ (1,345,391) $ (1,624,046) $ (161,091)
(1) Also includes impacts of change in G-Debt allocator to other accounts
besides long-term interest expense.
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Existing Rates (fuel & purchased power in existing rates adjusted out for
comparison purposes)
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Chugach Wholesale G&T
Chugach -----------------------------------------------------
System Total Retail Wholesale HEA MEA SES
---------------------------------------------------------------------------------
Revenue Requirement (Exhibit FMF-03) $116,130,362 $ 86,352,527 $ 29,777,835 $ 10,292,179 $ 18,309,971 $1,175,685
- --------------------------------------------------------------------------------
Chugach Original Filing
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Chugach Wholesale G&T
Chugach -----------------------------------------------------
System Total Retail Wholesale HEA MEA SES
---------------------------------------------------------------------------------
G&T Revenue Requirement
Energy $ 33,763,388 $ 26,944,565 $ 6,818,823 $ 2,897,277 $ 3,590,456 $ 331,089
Demand $ 39,432,250 $ 10,223,835 $ 29,208,415 $ 10,125,564 $ 17,962,589 $1,120,263
Customer $ 39,600 $ 0 $ 39,600 $ 19,800 $ 16,200 $ 3,600
---------------------------------------------------------------------------------
Subtotal G&T $ 73,235,238 $ 37,168,400 $ 36,066,838 $ 13,042,641 $ 21,569,245 $1,454,952
Distribution Revenue Requirement $ 45,741,988 $ 45,741,988 $ 0 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------
Total Revenue Requirement $118,977,226 $ 82,910,388 $ 36,066,838 $ 13,042,641 $ 21,569,245 $1,454,952
Revenue Requirement % Change from
Existing Rates 2.5% -4.0% 21.1% 26.7% 17.8% 23.8%
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Settlement
- --------------------------------------------------------------------------------
Chugach Wholesale G&T
Chugach -----------------------------------------------------
System Total Retail Wholesale HEA MEA SES
---------------------------------------------------------------------------------
G&T Revenue Requirement
Energy $ 6,852,241 $ 3,393,762 $ 3,458,479 $ 1,469,597 $ 1,820,964 $ 167,918
Demand $ 60,161,587 $ 30,723,356 $ 29,438,231 $ 10,207,853 $ 18,108,035 $1,122,343
Customer $ 39,600 $ 0 $ 39,600 $ 19,800 $ 16,200 $ 3,600
---------------------------------------------------------------------------------
Subtotal G&T $ 67,053,428 $ 34,117,118 $ 32,936,310 $ 11,697,250 $ 19,945,199 $1,293,861
Distribution Revenue Requirement $ 47,998,643 $ 47,998,643 $ 0 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------
Total Revenue Requirement $115,052,071 $ 82,115,761 $ 32,936,310 $ 11,697,250 $ 19,945,199 $1,293,861
Revenue Requirement % Change from
Existing Rates -0.9% -4.9% 10.6% 13.7% 8.9% 10.1%
Revenue Requirement % Change from
Chugach Proposed Rates in Orig Filing -3.3% -1.0% -8.7% -10.3% -7.5% -11.1%
SETTLEMENT AGREEMENT
BETWEEN CHUGACH AND CITY OF SEWARD
This settlement agreement ("Seward Settlement Agreement") is entered into
by and between Chugach Electric Association, Inc. ("Chugach") and the City of
Seward, Seward Electric Utilities Division ("Seward").
WHEREAS, on July 27, 2007, Chugach, Homer Electric Association, Inc.
("HEA"), and the Attorney General for the State of Alaska representing the
Regulatory Affairs and Public Advocacy Staff ("RAPA") entered into a Memorandum
of Agreement ("HEA/RAPA Settlement Agreement") to settle and resolve all issues
among those parties in Docket U-06-134 of the Regulatory Commission of Alaska
("RCA"). A copy of the HEA/RAPA Settlement Agreement is attached hereto as
Exhibit 1;
WHEREAS, Seward is a party to Docket U-06-134, but was not able to
adequately review the HEA/RAPA Settlement Agreement prior to its execution;
WHEREAS, Chugach and Seward desire to enter into a settlement agreement
incorporating the same terms and conditions as are set forth in the HEA/RAPA
Settlement Agreement as though Seward had been a party to the HEA/RAPA
Settlement Agreement;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Chugach and Seward agree as follows:
1. Chugach and Seward agree to resolve the issues between them in Docket
U-06-134 in accordance with the terms and conditions of the HEA/RAPA Settlement
Agreement as if Seward were a party to that agreement.
2. Specifically, Chugach and Seward agree that the rates for wholesale
power paid by Seward will be based on a revenue requirement for serving Seward
that is calculated assuming the adjustments and terms set forth in the HEA/RAPA
Settlement Agreement.
3. Nothing in this Seward Settlement Agreement or the HEA/RAPA Settlement
Agreement shall be construed as an amendment, waiver, or compromise of any
provision of the Chugach/Seward Power Sales Agreement.
4. This Seward Settlement Agreement is subject to ratification and
approval by the City Council of the City of Seward. It is expected that the City
Council of the City of Seward will take action regarding this Seward Settlement
Agreement on August 1, 2007.
CHUGACH ELECTRIC CITY OF SEWARD, SEWARD
ASSOCIATION, INC. ELECTRIC UTILITIES DIVISION
/s/ William R. Stewart /s/ Phillip Oates
- ---------------------------- --------------------
William R. Stewart Phillip Oates
Chief Executive Officer City Manager
Date: 07/31/07 Date: 07/31/07
[SEAL]
Attest: /s/ Jean Lewis
-------------------------------
Jean Lewis, City Clerk 7/31/07
U-06-134(15)
Appendix B
Page 1 of 4
MEMORANDUM OF AGREEMENT
This Agreement entered into this 27th day of July, 2007, among Homer
Electric Association, Inc. ("HEA"), Chugach Electric Association, Inc.
("Chugach"), and the Attorney General for the State of Alaska representing the
Regulatory Affairs and Public Advocacy staff ("RAPA"). The parties, are involved
in Docket No. U-06-134 (the "Docket") before the Regulatory Commission of Alaska
("Commission"). They have agreed to resolve the issues in the Docket as set
forth below, subject to the approval of the Commission.
With respect to the Docket, the parties agree to resolve the issues therein by
agreeing that the rate for wholesale power paid by HEA will be based on a
revenue requirement calculated assuming the following adjustments. Accordingly
the parties agree to the following adjustments and terms.
1. 68% G&T/32% Distribution allocation of interest on long term debt and for the
calculation of TIER.
2. Accept proposals in Section I of Chugach's letter of July l7, 2007 as
follows:
a. G&T TIER at 1.10
b. Reduction to expense levels in Revenue Requirement
i. AG deferral/surcharge proposals
ii. Reduced annual expense level reflecting AG proposal
c. Depreciation expense
i. No change to G&T net salvage rates approved in U-04-102.
ii. Cooper Lake 50 year remaining life (2057 retirement date)
iii. Beluga Unit 5 2017 retirement date
iv. In addition, see Item 5 below regarding Beluga Unit 8.
3. Amortize Beluga compression costs over 10 years.
4. Accept HEA's recommendation on the North submarine cable field, or, in other
words, no change in present life. No change to 40-S3 survivor curve for North
submarine cable field.
5. Review the Beluga Unit 8 refurbishment/retirement issue once more information
is known after Chugach's next Depreciation Study in 2008. This review will
probably take place in 2009. Subject to the realization of Chugach's current
plans for unit retirement, the Beluga Unit 8 life of 2014 will be provisionally
accepted until the next Depreciation Study.
6. Make an adjustment reclassifying G&T and O&M expenses in accordance with
one-half the impact of JAM-6.
7. Pursuant and subject to the terms and conditions of the Settlement Agreement
and Mutual Releases dated June 13, 2007 between Chugach and Matanuska Electric
Association, Inc., Chugach agrees to use the phrase "Temporary Intracompany Non
interest Bearing Balance" instead of "Due to Distribution from G&T" and "Due
from G&T to Distribution" to refer to offsetting intra-company accounts
reflected on any future publication of Chugach's unbundled
EXHIBIT 1
Page 1 of 3
U-06-134(15)
Appendix B
Page 2 of 4
balance sheet Chugach further agrees to include the following explanatory note
when using the term "Temporary Intracompany Non Interest Bearing Balance":
"Temporary Intracompany Non Interest Bearing Balance" does not represent a
debt or payable owed by any Chugach customer.
HEA does not agree with Chugach's unbundling methodology, but will accept the
allocation of long term interest expense as noted in Item 1 above.
8. Accept Chugach's new labor allocators and present cost allocation until the
next rate case.
9. HEA and Chugach agree to meet and confer in advance of proposing any changes
to the Cost Allocation Manual.
10. In the event Chugach files a rate case based on a 2007 or 2008 TY, both
parties agree that the 68% G&T/32% Distribution, allocation of interest on long
term debt for the calculation of TIER will be applied to the HEA revenue
requirement. Regardless of this agreement, the Commission retains the discretion
to determine a just, fair, and reasonable allocator for long term interest
expense, and the Attorney General retains the discretion to assert any position
deemed by the Attorney General to be supported by the evidence and consistent
with the public interest.
11. HEA's and the Attorney General's profiled testimony will be filed with the
Commission for the sole purpose of supporting the settlement reached herein, and
for no other purpose.
12. Nothing in this agreement is deemed to constitute an amendment to the HEA
Power Sales Agreement.
13. The parties enter into this Agreement for the sole purpose of resolving all
issues in this rate case. Subject to the forgoing specific restrictions relating
to the interest expense allocator, this Agreement does not prevent the parties
from presenting or arguing their respective positions on the same or similar
issues in future cases. This Agreement is binding on the Parties for the
purposes of this docket only and will have no binding or precedential effect.
Dated this 27th day of July, 2007
CHUGACH ELECTRIC ASSOCIATION, TALIS J. COLBERG
INC. ATTORNEY GENERAL
By: /s/ William R. Stewart By: /s/ Steve Devries
------------------------------- ------------------------------
HOMER ELECTRIC ASSOCIATION, INC. Steve Devries
Assistant Attorney General
By: /s/ Bradley Janorschke
-------------------------------
EXHIBIT 1
Page 2 of 3
U-06-134(15)
Appendix B
Page 3 of 4
2
SETTLEMENT ANALYSIS
- --------------------------------------------------------------------------------
Revenue Requirement Adjustments (approximations)
- --------------------------------------------------------------------------------
Chugach Wholesale G&T
Chugach -------------------------------------------------
Source System Total Retail Wholesale HEA MEA SES
----------------------------------------------------------------------------
RAPA (approximate)(1) Exhibit JKF-2 $ (1,026,449) $ (703,374) $ (323,074) $ (125,111) $ (183,688) $ (14,276)
Depr Adj NHH $ (2,528,707) $(1,472,165) $(1,056,542) $ (367,667) $ (649,852) $ (39,024)
1.10 G&T TIER with 68% G&T Debt JAM & RWC $ -- $ -- $ -- $ -- $ -- $ --
Long-Term Interest $ -- $ 563,611 $ (563,611) $ (195,818) $ (346,109) $ (21,683)
Margin $ -- $ 908,808 $ (908,808) $ (315,580) $ (557,789) $ (35,439)
Beluga Gas Compressor - 10 yr
amortization $ (370,000) $ (183,596) $ (186,404) $ (78,098) $ (99,519) $ (8,787)
----------------------------------------------------------------------------
Subtotal $ (3,925,156) $ (886,716) $(3,038,439) $(1,082,274) $(1,836,957) $(119,208)
Reclassification of G&T
Expenses - Approx half of JAM
proposal JAM $ -- $ 92,089 $ (92,089) $ (263,118) $ 212,911 $ (41,882)
----------------------------------------------------------------------------
Total $ (3,925,156) $ (794,627) $(3,130,528) $(1,345,391) $(1,624,046) $(161,091)
(1) Also includes impacts of change in G-Debt allocator to other
accounts besides long-term interest expense.
- --------------------------------------------------------------------------------
Existing Rates (fuel & purchased power in existing rates adjusted out for
comparison purposes)
- --------------------------------------------------------------------------------
Chugach Wholesale G&T
Chugach --------------------------------------------------
System Total Retail Wholesale HEA MEA SES
-----------------------------------------------------------------------------
Revenue Requirement (Exhibit FMF-03) $116,130,362 $86,352,527 $29,777,835 $10,292,179 $18,309,971 $1,175,685
- --------------------------------------------------------------------------------
Chugach Original Filing
- --------------------------------------------------------------------------------
Chugach Wholesale G&T
Chugach --------------------------------------------------
System Total Retail Wholesale HEA MEA SES
-----------------------------------------------------------------------------
G&T Revenue Requirement
Energy $ 33,763,388 $26,944,565 $ 6,818,823 $ 2,897,277 $ 3,590,456 $ 331,089
Demand $ 39,432,250 $10,223,835 $29,208,415 $10,125,564 $17,962,589 $1,120,263
Customer $ 39,600 $ 0 $ 39,600 $ 19,800 $ 16,200 $ 3,600
-----------------------------------------------------------------------------
Subtotal G&T $ 73,235,238 $37,168,400 $36,066,838 $13,042,641 $21,569,245 $1,454,952
Distribution Revenue Requirement $ 45,741,988 $45,741,988 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------
Total Revenue Requirement $118,977,226 $82,910,388 $36,066,838 $13,042,641 $21,569,245 $1,454,952
Revenue Requirement % Change
from Existing Rates 2.5% -4.0% 21.1% 26.7% 17.8% 23.8%
- --------------------------------------------------------------------------------
Settlement
- --------------------------------------------------------------------------------
Chugach Wholesale G&T
Chugach --------------------------------------------------
System Total Retail Wholesale HEA MEA SES
-----------------------------------------------------------------------------
G&T Revenue Requirement
Energy $ 6,852,241 $ 3,393,762 $ 3,458,479 $ 1,469,597 $ 1,820,964 $ 167,918
Demand $ 60,161,587 $30,723,356 $29,438,231 $10,207,853 $18,108,035 $1,122,343
Customer $ 39,600 $ 0 $ 39,600 $ 19,800 $ 16,200 $ 3,600
-----------------------------------------------------------------------------
Subtotal G&T $ 67,053,428 $34,117,118 $32,936,310 $11,697,250 $19,945,199 $1,293,861
Distribution Revenue Requirement $ 47,998,643 $47,998,643 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------
Total Revenue Requirement $115,052,071 $82,115,761 $32,936,310 $11,697,250 $19,945,199 $1,293,861
Revenue Requirement % Change from
Existing Rates -0.9% -4.9% 10.6% 13.7% 8.9% 10.1%
Revenue Requirement % Change from
Chugach Proposed Rates in
Orig Filing -3.3% -1.0% -8.7% -10.3% -7.5% -11.1%
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
STATE OF ALASKA
THE REGULATORY COMMISSION OF ALASKA
Before Commissioners: Anthony A. Price, Chairman
Kate Giard
Dave Harbour
Mark K. Johnson
Janis W. Wilson
In the Matter of the Tariff Revision, )
Designated as TA279-8, Filed by CHUGACH ) U-06-134
ELECTRIC ASSOCIATION, INC. for a Rate )
Increase and Rate Redesign ) ORDER NO. 15
- -----------------------------------------)
STATEMENT OF COMMISSIONER DAVE HARBOUR
DISSENTING IN PART AND CONCURRING IN PART
Introduction
The sole purpose of the July 31, 2007, hearing(1) was to provide
settling parties(2) an opportunity to provide oral reply to oppositions to their
requests for acceptance of the settlement and motion for scheduling relief.(3)
After Administrative Law Judge Wood(4) announced the Majority's
bench order at the end of the hearing, I offered an impromptu dissent from the
decision to alter
- ----------
(1) Electronic order, dated July 30, 2007.
(2) Chugach Electric Association, Inc. (Chugach), Alaska Electric and
Energy Cooperative, Inc. and Homer Electric Association, Inc. (together HEA),
and the Attorney General (AG). The City of Seward (Seward) subsequently joined
in the settlement with the other settling parties.
(3) If the Commission, including this panel member, had enforced our order
by restricting comment to 'settling parties' and restricting replies to the
scope of the motion, this separate statement would not have been required as (a)
the specter of procedural delay would have been less likely to have arisen, and
(b) acceptance of the settlement and due process arguments of a non-settling
party would have attracted less attention and stimulated less tension.
(4) Administrative Law Judge J.P. Wood substituted for Administrative Law
Judge David A. Lawrence.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 1 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
the procedural schedule by postponing the scheduled hearing from August 6 to
August 27, 2007. A second electronic order on August 2, 2007, notified the
parties of the Commission's intent to accept the settlements and further
deferred the hearing to the week of September 10, 2007.(5) Order No. 15 provides
further opportunity for significant delay.(6)
The purpose of this written statement is to clarify my position with
respect to Order U-06-134(15).(7) Respectfully, I dissent from that part of the
Majority's decision to reschedule the hearing to September 10, 2007, or beyond,
and I concur with that part of the Majority's decision to accept the settlement
agreements.
Background: The Settling Parties' Hearing and the Majority's Decision
Position of Matanuska Electric Association, Inc.
MEA, a non-settling party, fully participated in the settling
parties' hearing.(8) MEA raised an issue that, de facto, expanded the scope of
the hearing,(9) by
- ----------
(5) Electronic order, dated August 2, 2007.
(6) Order U-06-134(15), n.28. "If the parties desire a different date for
the public hearing, they may request a later hearing date. Due to other dockets
pending before us, a later hearing date is not feasible until after January 1,
2008. If the parties desire a hearing date that does not allow us at least 90
days after the close of hearing to complete a final order before the December
29, 2007, statutory deadline, they must all consent to an extension of the
statutory deadline. If the week of September 10, 2007, is a problem for only a
limited number of witnesses, it may be possible to take their testimony on a day
shortly before or after the week of September 10, 2007."
(7) Order U-06-134(15), Order Accepting Settlement Agreements, Amending
Procedural Schedule, and Permitting Supplemental Testimony, dated August 9,
2007.
(8) We could ameliorate this sort of conundrum in the future by providing
more specific language in convening orders, electronic or otherwise.
(9) This is another challenge, the sort of which we could better address
in the future by providing more specific language in convening orders,
electronic or otherwise.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 2 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
arguing that due process rights in a proceeding require protection, "when the
situation changes as dramatically as it is on the eve of this hearing."(10)
MEA took the position that it had privately relied on HEA's witness
to defend its position on depreciation.(11) MEA posited that with HEA's
agreement to the settlement MEA was thereby deprived of representation for its
position on depreciation.(12) MEA also complained that a clause in a tripartite
agreement not before us(13) might cause development of two revenue requirements
that it labeled a "complicating factor".(14)
MEA then said that it is not blocking the settlement,(15) but
believes the tripartite agreement is relevant and requires greater review.(16)
Although MEA stated it was "not a settling party" and did not intend to "hijack
the settlement", after a series of questions from Commissioner Giard, MEA
presented its prayer for relief which included: (1) more time to introduce
depreciation testimony and (2) to have a determination of the impact of the
tripartite agreement on the settlement.(17) MEA added that the
commission-approved tripartite agreement among Chugach, the Alaska Electric
- ----------
(10) Tr. 203.
(11) Ibid. at 169.
(12) Ibid.
(13) I could not find the tripartite agreement to which MEA refers in any
of its prefiled material. However, we do maintain it in our Commission files and
it is entitled "Modified Agreement for the Sale and Purchase of Electric Power
and Energy by and among CHUGACH ELECTRIC ASSOCIATION, INC., MATANUSKA ELECTRIC
ASSOCIATION, INC., AND ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,
INC." pursuant to Commission Order U-87-43(12).
(14) Tr. 179.
(15) Tr. 184.
(16) Ibid. at 185.
(17) Ibid. at 199.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 3 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
Generation and Transmission Cooperative, Inc. and itself could be circumvented
with acceptance of the stipulation.(18)
Positions of the Settling Parties
Counsel for the AG opined that MEA had the opportunity to present
numerous witnesses and the affirmative case it desired;(19) and that MEA's due
process rights were not violated in this instance.(20) The AG said that the
tripartite agreement was not before the Commission, adding that if it were the
Commission has jurisdiction and authority to modify such contracts when that
becomes necessary.(21) The AG said that any "side deal" between MEA and HEA is
not before the Commission; that it should not be the Commission's business;(22)
and that the AG was aware of "no principle of law that would allow them [MEA] to
hijack this proceeding the way that they are suggesting . . . ."(23) Chugach
responded in answer to Commissioner Price's inquiry that MEA has the full
benefit of a separate proceeding.(24) Chugach explained that MEA's reference to
the tripartite agreement was, "somewhat of a red herring" because accommodation
to the retail customers could be made and it should not be an impediment to the
Commission's acceptance of the settlement.(25) Chugach said, responding to
Commissioner Giard's questions that "if you hold with MEA's logic it means that
once prefiled testimony is filed by interveners any intervener is capable of
- ----------
(18) Ibid. at 200.
(19) Ibid. at 176.
(20) Ibid. at 177.
(21) Ibid. at 182.
(22) Ibid. at 196.
(23) Tr. 197.
(24) Ibid. at 178.
(25) Ibid. at 183.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 4 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
stopping everyone else from settling a case that really ought to be settled. . .
.. There has to be a way to allow parties that want to agree to be able to agree
to save their ratepayers all the money that they're going to save and get the
certainty of a settlement."(26) HEA emphasized that MEA could choose to settle
or not,(27) but that with its decision comes risk that it might through separate
adjudication achieve a better or worse result than the settlement produces.(28)
HEA described in response to a series of questions why HEA's informal
relationship with MEA as testimony was being developed would not affect any due
process principle.(29)
Seward pointed out the similarities applying to due process rights
of one party when another either withdraws or settles, concluding that
Homer Electric could withdraw today and without any settlement with
Chugach. And there are serious constitutional protections that would
prohibit any other party or you compelling them to present their case if
they didn't want to. They could withdraw and then when another party
wanted to submit its prefiled testimony there would be no one to sit in
that chair and authenticate it and you likely would not accept that
testimony . . . .(30)
Seward also stated, "the due process rights argument is not
implicated because Matanuska Electric, City of Seward, all the parties . . . did
not have a right to rely on any other parties' actions. And absent a contract
right there's no obligation to continue . . . . "(31)
- ----------
(26) Ibid. at 195.
(27) Ibid. at 180.
(28) Ibid. at 181.
(29) Ibid. at 191.
(30) Tr. 204.
(31) Ibid. 205.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 5 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
The Majority's Decision
The Majority accepted the settling parties' agreement, gave MEA the
opportunity to file supplemental testimony, and provided MEA with a delay of the
hearing between itself and Chugach.(32) In doing so, the Majority effectively
dismissed part of MEA's prayer: that the impact of the settlement on the
tripartite agreement should be determined before accepting the settlement. It
then dealt with the balance of MEA's prayer by delaying the proceeding without
supporting rationale and with an observation that, "we do not believe we are
required to do so."(33) The Majority said that MEA failed to raise its two
foreseeable concerns in prefiled testimony and had the opportunity to raise such
issues in prefiled testimony. The Majority then seemed to contradict its own
rationale by executing an about-face and ordering procedural delay. To attempt
justification for its action, the Majority then relied on its opinion(34) that
"hearing testimony from MEA and Chugach on these two concerns will result in a
more complete record . . . ."(35) The Majority then described its public
interest rationale for acceptance of the settlement, which benefits ratepayers
and does not materially prejudice rights of non-settling parties.(36)
- ----------
(32)On page 3 of Order U-06-134(15), I believe the majority erred in
claiming to grant a hearing to MEA as a non-settling party under AS 42.05.191.
On page 4, it finds that MEA's rights are not materially prejudiced before
another hearing is convened, making the matter moot. In any case, AS 42.05.191
does not address rights of a non-settling party to a hearing. The TA279-8 rate
case and rate design hearing will continue for MEA and Chugach, but it is not a
hearing about the accepted settlement and it does not continue pursuant to AS
42.05.191.
(33) Order U-06-134(15) at 4.
(34) AS 42.05.191.
(35) Order U-06-134(15) at 6.
(36) Ibid. at 5.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 6 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
For me, the AG put it best: "I don't begrudge MEA from making any
argument that its counsel thinks is prudent argument to make. What I am
commenting on is the foundation for that argument and...that it's lacking in
merit when you consider how and under what circumstances it has been presented
to you."(37) Even MEA affirmed that "[t]he settlement should not affect our
rights in the hearing against Chugach . . . ,"(38) even though it went on to
strenuously argue for delay of the decision to accept the settlement and
subsequent delay of the hearing, half of which rationale was lost when the
Commission dismissed the tripartite agreement argument with acceptance of the
settlement.
MEA further argued that acceptance of the settlement could in some
way taint the Commission.(39) I found this unsupported argument a challenge to
the responsibility every commission bears to produce unbiased decisions. I found
MEA's further claims that the "texture" of the hearing in wake of a settlement
could work against its interest(40) to be similarly not useful. While the
Majority seemed to agree with all of the rationale for ignoring MEA's prayers
for delay, it nevertheless delayed the proceeding without offering meaningful
support for its decision.
I Dissent From That Part of the Majority's Decision to Reschedule the Hearing
to September 10 or Beyond for Three Reasons
First, MEA's delay plea defaults to its baseless claim that without
HEA's witness its obscurely developed due process rights are threatened. When we
believe
- ----------
(37) Tr.198.
(38) Ibid. at 168.
(39) Ibid. at 169. "just the fact that there is a pre-determined set of
results that you will be having in the back of your mind or off to the side,
which is the settlement proposal that perhaps we then have to bat against, if
you will."
(40) Ibid. at 168.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 7 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
as the Majority apparently does, and I do, that this record shows due process
rights of the non-settling party are protected, the Commission can make a
finding to that effect.(41) The Commission should have been comfortable and
confident in maintaining this docket's schedule. MEA's decision to rely on HEA's
witness was a tactical decision for which it alone is responsible, and that
should not delay the settling parties and this Commission when HEA decides to
settle. Furthermore, before shouting "fire" in the regulatory theater at a late
hour, MEA could have opted for a different course of action if its ultimate goal
truly was to find a reasonable solution rather than cause chaos and delay. It
could have wisely, discretely, and diligently explored with HEA the possibility
of retaining HEA's witness going forward or, alternatively, petitioned this
Commission to subpoena a witness at MEA's expense. Either of these options, or
others I can envision, might have timely preserved the witness representation
MEA professes to consider critical without raising, before settling parties and
this Commission, the specter of delay.
Second, by agreeing to delay, the Majority weighed MEA's
disingenuous due process claims more heavily than the settling parties'
ratepayers' interests in timely resolution of the case. In particular, Chugach's
residential customers might expect to pay a higher rate for a longer time than
if the hearing had been held as scheduled. Furthermore, avoidable delay in one
proceeding produces unavoidable consequences for ratepayers impacted by other
proceedings as dockets stack up and demands on staff and commissioners grow.
- ----------
(41) AS 42.05.191 requires that "Every formal order of the commission
shall be based upon the facts of record." The facts of this record do not well
support the Majority's decision. The statute also requires that, "Every order
entered pursuant to a hearing must state the commission's findings, the basis of
its findings and conclusions together with its decision." This statement
identifies the weak basis for Order No. 15's findings.
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 8 of 9
Regulatory Commission of Alaska
701 West Eighth Avenue, Suite 300
Anchorage, Alaska 99501
(907) 276-6222; TTY (907) 276-4533
Third, the Commission well knows that one of the fundamental
justifications for our accepting stipulations involving the Attorney General's
public advocate is the increased confidence we have that the settlement is
consistent with the public interest. Likewise, when the Attorney General's
public advocate advises the Commission that the procedural schedule can be
maintained without eroding MEA's statutory and due process rights, our
reluctance to entertain delay should be even greater. In this case, even without
the AG's advice, support for delay is unconvincing.
I Concur With That Part of the Majority's Decision Accepting
the Settling Parties' Agreement
On a smaller issue, I concur with the Majority's acceptance of the
stipulation, but believe the record justified acceptance when the bench order
was issued and should have been included in the bench order. By delaying the
formal acceptance until Order U-06-134(15) issued on August 9, 2007, the
Majority prevented settling parties from more timely shedding expensive
arrangements for their participation in a hearing, when the record before the
Commission was no more instructive on August 9 than it was on July 31.
DATED AND EFFECTIVE at Anchorage, Alaska, this 10th day of August, 2007.
----------------------------
Commissioner Dave Harbour
U-06-134(15) - (08/10/2007)
Statement of Commissioner Dave Harbour Dissenting In Part and Concurring In Part
Page 9 of 9