LOUISIANA PUBLIC SERVICE COMMISSION MINUTES FROM MAY 21, 2013 OPEN SESSION MINUTES OF MAY 21, 2013 OPEN SESSION OF THE LOUISIANA PUBLIC SERVICE COMMISSION HELD IN BATON ROUGE, LOUISIANA. PRESENT WERE CHAIRMAN ERIC SKRMETTA, VICE CHAIR CLYDE HOLLOWAY AND COMMISSIONERS FOSTER CAMPBELL, LAMBERT BOISSIERE, AND SCOTT ANGELLE. ALSO PRESENT WAS EVE KAHAO GONZALEZ. Open Session of May 21, 2013, convening at 9:24 A.M. and adjourning at 10:55 A.M., Natchez Room, 602 N. 5th Street, 1st Floor, Baton Rouge, Louisiana, with the above-named members of the Commission and Secretary Eve Kahao Gonzalez. Ex. 1 Announcements. Next B&E Meeting will be Wednesday June 26, 2013 in Baton Rouge. Commissioner Holloway announced Ex. 9 will be passed due to lack of votes, but would like to revisit at the next meeting. He asked that the staff revisit the .5%. Chairmen Skrmetta requested Brandon Frey to meet with Commissioner Holloway to identify the electric cooperative that has reached .5% and prepare an analysis as quickly as possible on the affect of the cap of net metering and its financial effects on the electric cooperative and the other consumers. The item will be reheard at the June 2013 B & E. Commissioner Angelle directed staff to revisit the order that was established in 2005 respective to how it applies to individual providers with regard to reaching the cap. Commissioner Skrmetta directed staff to update the current LPSC rules of practice and procedure to conform to current State law and to annually update the same. Commissioner Skrmetta directed staff to look into the possibility of implementing a statewide storm monitoring system similar to the one used by Entergy New Orleans which would be financed by the utilities. Commissioner Skrmetta requests the staff to research mechanisms for financing of utilities at the FERC. Would like a white paper on the concept of double leveraging of equity to debt which is not allowed at the state level. Commissioner Angelle directed staff to include in its report on the Renewable Energy Pilot Program in R-28271 Subdocket B an analysis of the possibility of maintain the standard offer tariffs that Entergy and SWEPCO currently have in place; and also of increasing the capacity limits for each project thereunder. I raise this issue because it is my understanding that Lafource Sugars is the only producer that has taken advantage of the tariff thus far, but that they may be interested in selling more power than they are currently allowed to under the 5MW cap. In addition, he would like staff to issue its report for comment and give a final report to the commission at its July 2013 B & E. Ex. 2 T-32656 - Louisiana Public Service Commission vs. Rice City Trucking, Inc. (Crowley, Louisiana) In re: Alleged violation of Louisiana Revised Statutes Title 45:161 through 180.1 as amended, by operating beyond the scope of authority granted in LPSC 7341 on thirteen counts; allegedly occurring on or about November 4, 2012 through November 21, 2012. In re: Discussion and possible vote pursuant to Rule 57 on Stipulated Agreement On motion of Commissioner Holloway, seconded by Commissioner Skrmetta, and unanimously adopted, the Commission voted to assert its original and primary jurisdiction and take this matter up pursuant to Rule 57. On motion of Commissioner Holloway, seconded by Commissioner Angelle, and unanimously adopted, the Commission voted to adopt Staff Recommendation, wherein the Carrier agreed to plead guilty and admit that it had violated Louisiana Revised Statutes Title 45:161 through 180.1 as amended on twelve (12) counts and receive a fine of $2,000 per count with $1,000 per count suspended, conditioned on the Carrier not committing any additional violations for one (1) year from the date of the agreement, along with a citation fee of $25.00, for a total of $12,025.00 to be paid monthly over six (6) months. -1- Minutes of May 21, 2013 B&E Ex. 3 U-32628 - Entergy Gulf States Louisiana, LLC and Entergy Louisiana, LLC. ex parte. In re: Joint Application for Approval of the Modification of the Current Methodology for Calculating Avoided Cost. (Last month's Exhibit 7) Re: Discussion and Possible Vote Regarding Request by Entergy Gulf States Louisiana, L.L.C. and Entergy Louisiana, LLC to Modify LPSC Order No. U-32148 Requirement to File FERC Application to be Relieved of Qualified Facility “Put” Obligations to be Effective as of the Date of MISO Membership. PASSED Ex. 4 U-32764 - Entergy Louisiana, LLC and Entergy Gulf States Louisiana, LLC. ex parte. In re: Joint Application for Recovery in Rates of Costs Related to Hurricane Isaac, Determination of Appropriate Storm Reserve Escrow Amounts and Related Relief. In re: Discussion and possible vote to hire outside counsel. On motion of Commissioner Campbell, seconded by Commissioner Holloway, and unanimously adopted, the Commission voted to retain Stone Pigman Walther Wittmann L.L.C. as counsel to assist the Commission Staff in this matter for a budget of $169,000 for fees, $10,000 for expenses for a total budget of $179,000. Ex. 5 U-32764 - Entergy Louisiana, LLC and Entergy Gulf States Louisiana, LLC. ex parte. In re: Joint Application for Recovery in Rates of Costs Related to Hurricane Isaac, Determination of Appropriate Storm Reserve Escrow Amounts and Related Relief. In re: Discussion and possible vote to hire outside consultant. Commissioner Skrmetta moved to retain Exeter and Henderson Ridge (“Joint Applicants”) as consultants to assist the Commission Staff in this matter for a budget of $129,500 in fees, and expenses not to exceed $10,000 for a total budget of $139,500. Commissioner Holloway offered a substitute motion to hire WHN which failed for a lack of a 2nd. Commissioner Skrmetta’s motion, seconded by Commissioner Campbell was then unanimously adopted. Ex. 6 U-32759 - Entergy Gulf States Louisiana, LLC. ex parte. In re: Application for an Accounting Order and Declaratory Relief Relating to the Commission's General Order dated November 6, 1997 Governing the Treatment and Allocation of Fuel Costs. In re: Discussion and possible vote to hire outside consultant. On motion of Commissioner Skrmetta, seconded by Commissioner Holloway, and unanimously adopted, the Commission voted to retain Henderson Ridge as consultant to assist the Staff throughout completion of the docket for a budget of $18,500 in fees, $1850 in expenses, for a total budget of $20,350. Ex. 7 S-32314 - North of Crowley Water Corporation, ex parte. In re: Request for an increase in water rates. (non-profit system). In re: Discussion and possible vote on Staff Recommendation. On motion of Commissioner Holloway, seconded by Commissioner Angelle, and unanimously adopted, the Commission voted to accept the Staff Recommendation increasing the metered water rates from $13.50 to $14.60 for the first 2,000 gallons, $3.00 to $3.50 per 1,000 gallons for 2,0015,000 gallons and $2.50 to $3.00 for all additional 1,000 gallons and further accepting all other conditions of the Staff’s Recommendations as detailed in the Memorandum filed into the record on May 1, 2013. Ex. 8 S-32319 - United Water System, Inc., ex parte. In re: Request for an increase in water rates (non-profit system). In re: Discussion and possible vote on Staff Recommendation. On motion of Commissioner Angelle, seconded by Commissioner Campbell, and unanimously adopted, the Commission voted to accept the Staff Recommendation increasing the residential rate from $10.25 to $13.00 for the first 2,000 gallons or less, and from $3.45 to $4.50 for each -2Minutes of May 21, 2013 B&E additional 1,000 gallons thereafter, increasing the Water Type 2 on 1 connection (W2) from $20.50 to $26.00 for the first 4,000 gallons or less and from $3.45 to $4.50 for each additional 1,000 gallons thereafter, and increasing the Water Type 3 on 1 connection (W3) from $30.75 to $39.00 for the first 6,000 gallons or less and from $3.45 to $4.50 for each additional 1,000 gallons thereafter and further accepting all other conditions of Staff’s Recommendation included in the Audit Memorandum as filed into the record on April 24, 2013. Ex. 9 R-31417 - LPSC, ex parte. In re: Re-examination of the Commission's Net Energy Metering Rules found in General Order No. R-27558, dated November 30, 2005 (the “Net Metering Order”) (Exhibit 12 on last month’s agenda) In re: Discussion and Possible Vote to Amend the Commission’s Net Metering Rules. PASSED Chairmen Skrmetta directed Brandon Frey to meet with Commissioner Holloway to identify the electric cooperative that has reached .5% and prepare an analysis as quickly as possible on the affect of the cap of net metering and its financial effects on the electric cooperative and the other consumers. Ex. 10 R-32765 - Louisiana Public Service Commission, ex parte. Company Storm Recovery Procedures. In re: Investigation of Utility In re: Investigation of Utility In re: Discussion and possible vote to hire outside counsel. PULLED Ex. 11 R-32765 - Louisiana Public Service Commission, ex parte. Company Storm Recovery Procedures. In re: Discussion and possible vote to hire outside consultant. PULLED Ex. 12 R-32777 - Louisiana Public Service Commission, ex parte.. In re: Rulemaking to establish rules and regulations specific to the regulation of prison telephone communications systems. In re: Discussion and possible vote to hire outside counsel. Commissioner Boissiere made a motion, seconded by Commissioner Skrmetta, with Commissioner Holloway and Commissioner Angelle supporting and Commissioner Campbell opposing, to retain McQuaig & Associates, LLC, as counsel to assist Staff throughout the completion of the docket for a budget of $91,500 in fees, expense not to exceed $4,500 for a total not to exceed budget of $96,000. Ex. 13 R-32777 - Louisiana Public Service Commission, ex parte.. In re: Rulemaking to establish rules and regulations specific to the regulation of prison telephone communications systems. In re: Discussion and possible vote to hire outside consultant. Commissioner Skrmetta made a motion, seconded by Commissioner Angelle, with Commissioner Holloway and Commissioner Boissiere supporting and Commissioner Campbell opposing, to retain Henderson ridge Consulting and Allerton & Company LLC, as consultants to assist Staff throughout the completion of the docket for the budget of $78,700 in regulatory fees, and expenses not to exceed $3,200 for a total budget of $82,070. Hourly rates range from $135 to $200. Ex. 14 R-28271 - Subdocket B - Louisiana Public Service Commission, ex parte. In re: Re-study of the feasibility of a renewable portfolio standard for the State of Louisiana. U-32155 - Cleco Power, LLC, ex parte. In re: Informational Filing Containing Draft Request for Proposals for Biomass Fuel Resources. (Exhibit 8. on the February agenda) -3- Minutes of May 21, 2013 B&E In re: Discussion of Staff’s Evaluation of Cleco Power LLC’s Biomass Co-Firing pursuant to Rule 57. PASSED Ex. 15 1) Reports 2) Resolutions 3) Discussions 4) ERSC/OMS business On motion of Commissioner Holloway, seconded by Commissioner Angelle, and unanimously adopted, the Commission voted to ratify the votes taken by Chairman Skrmetta acting as the Commission's representative on the Board of Directors of the Organization of MISO States ("OMS") at the April 18 and May 16 OMS Board meetings. Ex. 16 U-32785 - Entergy Gulf States Louisiana, L.L.C., ex parte. In re: Application for Approval of a 20-Year Contract with Agrilectric Power Partners, LP for the Purchase of Capacity and Energy and Request for Timely Treatment. In re: Discussion and possible vote to hire outside consultant to assist Staff in its review. At the request of Commissioner Holloway. On motion of Commissioner Holloway, seconded by Commissioner Campbell, and unanimously adopted, the Commission voted to retain J. Kennedy and Associates as consultants to assist the Commission Staff throughout completion of the docket for a total budget of $28,000 in regulatory fees, $2,800 in expenses, for a total not to exceed budget of $30,800. Ex. 17 T-32547 - Shell Pipeline Company, LP (Houston, Texas), ex parte.. In re: Application to file LPSC Tariff No. 81 to replace Supplement No. 16 to LPSC No. 55, Supplement No. 16 to LPSC No. 59, Supplement No. 13 to LPSC No. 60, Supplement No. 16 to LPSC No. 67 and Supplement No. 8 to LPSC No. 68 which will increase certain rates on its Delta pipeline system for Crude Petroleum. In re: Discussion and possible vote on request for rehearing. At the request of Commissioner Boissiere. On motion of Commissioner Skrmetta, seconded by Commissioner Boissiere, with Commissioner Angelle abstaining, and Commissioners Campbell and Holloway concurring, the Commission voted to rehear the matter pursuant to its original and primary jurisdiction. On motion of Commissioner Boissiere, seconded by Commissioner Skrmetta, with Commissioner Holloway concurring, Commissioner Campbell opposing, and Commissioner Angelle abstaining, Shell Pipeline was authorized to implement a 15% increase in the rates of the requested routes detailed in the application filed by Shell Pipeline. One year from the effective date of the 15% increase in rates, Shell is authorized to file tariffs with the LPSC Staff reflecting the remaining 15% increase which shall become effective upon Staff’s acceptance of the tariffs. Ex. 18 S-32738 - West Winnsboro Water System, Inc., ex parte.. In re: Request for a Letter of Non-Opp for authorization to borrow $400,000.00 from the Franklin State Bank & Trust Co. In re: Discussion and possible vote to approve refinance. At the request of Commissioner Campbell. PASSED Ex. 19 S-32582 - Southeast Grant Water System, Inc., ex parte.. In re: Request for an increase in water rates (non-profit). In re: Discussion and possible vote to adopt Staff Recommendation. -4- Minutes of May 21, 2013 B&E At the request of Commissioner Holloway. On motion of Commissioner Holloway, seconded by Commissioner Campbell, and unanimously adopted, the Commission voted to accept the Staff Recommendation increasing the residential rates from $20.27 to $23.00 for the first 2,000 gallons, $2.00 to $4.25 for all additional 1,000 gallons and increase commercial rates from $50.27 to $57.00 for the first 10,000 gallons and $2.00 to $4.25 for all additional 1,000 gallons. Ex. 20 Greater Ouachita Water Company, ex parte. In Re: Request for Commission approval to acquire certain wastewater properties and to increase water and sewer rates in order to finance water and sewer facility improvements, meet increased operating expenses and satisfy existing an incremental debt service obligations. In re: Discussion and possible vote to hire Henderson Ridge to assist Staff in the above-captioned proceeding. At the request of Commissioner Campbell. On motion of Commissioner Campbell, seconded by Commissioner Holloway, and unanimously adopted, the Commission voted to retain Henderson Ridge as consultants to assist the Commission Staff in this matter for a budget of $35,900 with expenses not to exceed $2,700 for a total budget of $38,600. Ex. 21 U-32425 - Louisiana Public Service Commission, ex parte.. In re: Evaluation of the 10.5% authorized Return on Equity in Entergy Gulf States Louisiana, LLC's current Rate Stabilization Plan for its retail gas operations. U-32682 - Entergy Gulf States Louisiana, L.L.C. In re: Test year 2012 Rate Stabilization Plan Filing. In re: Discussion and Possible Vote on Joint Report of Proceedings and Draft Order Accepting Proposed Uncontested Stipulated Settlement. At the request of Commissioner Boissiere. Commissioner Holloway made a motion to adopt the Uncontested Joint Report and Draft Order with Settlement Term Sheet. On substitute motion of Commissioner Boissiere, seconded by Commissioner Angelle, and unanimously adopted, the Commission voted to adopt the Uncontested Joint Report and Draft Order with Settlement Term Sheet, as filed into the record on May 16, 2013, with a modification to the language in Paragraph 8 of the Settlement Term Sheet. Ex. 22 R-32786 - Louisiana Public Service Commission, ex parte. In re: Rulemaking to establish “Best Practices” protocols for disaster planning and response by all LPSC-jurisdictional utilities. In re: Discussion and possible vote to hire outside counsel. At the request of Commissioner Skrmetta. On motion of Commissioner Boissiere, seconded by Commissioner Skrmetta, and unanimously adopted, the Commission voted to retain McQuaig and Associates as counsel to assist the Staff throughout completion of the docket for a budget of $259,900 in fees, expenses not to exceed $5,000 for a total not to exceed budget of $264,950. Ex. 23 R-32786 - Louisiana Public Service Commission, ex parte. In re: Rulemaking to establish “Best Practices” protocols for disaster planning and response by all LPSC-jurisdictional utilities. In re: Discussion and possible vote to hire outside consultant. At the request of Commissioner Skrmetta. On motion of Commissioner Skrmetta, seconded by Commissioner Boissiere, and unanimously adopted, the Commission voted to retain Henderson Ridge as consultant to assist the Staff throughout completion of the docket for a budget of $148,870 in regulatory fees, and expenses not to exceed $12,000 for a total budget of $160,870. -5- Minutes of May 21, 2013 B&E Ex. 24 R-31106 - LPSC, ex parte. In re: Rulemaking to study the possible development of financial incentives for the promotion of energy efficiency by jurisdictional electric and gas utilities. (Ex. 18 on February 27, 2013 Agenda) In re: Request for rehearing of Order R-31106. At the request of Commissioner Skrmetta. PASSED Ex. 25 U-32538 - Entergy Louisiana, LLC, Entergy Gulf States Louisiana, LLC, Mid South TransCo, LLC, Transmission Company Louisiana I, LLC, Transmission Company Louisiana II, LLC, ITC Holdings Corp. and ITC Midsouth LLC., ex parte.. In re: Joint Application for Entergy Louisiana, LLC, Entergy Gulf States Louisiana, LLC, Mid South TransCo, LLC, Transmission Company Louisiana I, LLC, Transmission Company Louisiana II, LLC, ITC Holdings Corp. and ITC Midsouth LLC for Approval of Change of Ownership of Electric Transmission Businesses, for Certain Cost-Recovery Adjustments and for Related Relief. In re: Possible Executive Session pursuant to La. R.S. 42:17 to discuss litigation strategy. At the Request of Commissioner Skrmetta. On motion of Commissioner Skrmetta, seconded by Commissioner Boissiere, and unanimously adopted, the Commission voted to enter into Executive Session. Ex. 26 Louisiana Public Service Commission et al. vs. Louisiana State Legislature, Docket No. 592,231, Section 26, 19th Judicial District Court, Parish of East Baton Rouge, State of Louisiana; Docket No. 2012-CA-0353, Louisiana Court of Appeal, First Circuit, State of Louisiana. In re: Possible Executive Session pursuant to La. R.S. 42:17 to discuss litigation strategy. At the request of Commissioner Skrmetta. On motion of Commissioner Skrmetta, seconded by Commissioner Boissiere, and unanimously adopted, the Commission voted to exit Executive Session On motion of Commissioner Skrmetta, seconded by Commissioner Holloway, and unanimously adopted, the Commission voted to adjourn. MEETING ADJOURNED The next Business and Executive Session will be held Wednesday June 26, 2013 at 9:00 a.m. in Baton Rouge, Louisiana. -6- Minutes of May 21, 2013 B&E