Wyoming Public Service Commission - wyoleg.gov · essentially serves a “gatekeeper” function...

Wyoming Public Service Commission

Joint Corporations, Elections and Political Subdivisions Interim Committee

May 19, 2017

Basic Overview

of

Public Service Commission

2

3

Public Service Commission

(3 Commissioners)

Secretary & Chief Counsel

1)(

mission ComAdministrator

(1)

Office of Consumer

Advocate (6)

oming Wyversal Uni

Service Fund (1)

Administration 19)(

Technical (8)

For budget and

admin

purposes only

Facility Engineers (3)

Legal (6)

Administrative Support (8)

--IT--Complaints --Accounting/HR --Admin Assistants --Docketing

4

Primary Functions Include:

• Regulation of Public Utility Rates and Terms of Service

• Administration of Wyoming Universal Service Fund

• Safety Inspection

• Advocacy

Public Utilities • Three main industries –• electricity, natural gas and

telephone • Plus –• Some commercial water

utilities• Intrastate oil and gas pipelines

*Key responsibility - to ensure that safe, adequate, and reliable service is available to Wyoming public utility customers at just and reasonable rates

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Do regulate Don’t regulate

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• 4 investor owned electric utilities

• 16 retail rural electric cooperatives *

• 14 natural gas distribution utilities providing retail gas service to Wyoming customers

• 14 incumbent local exchange telephone companies

• 250 (+/-) competitive local exchange telephone companies **

• 19 intrastate pipelines

• 12 private water utilities

*except retail rates

**very limited involvement – WPSC essentially serves a “gatekeeper” function

• Municipal water systems

• Municipal gas and electric utilities (except operations outside city limits)

• Interstate pipeline companies regulated by the federal government

• Cable television companies

• Wholesale generation and transmission cooperatives (Basin and TriState)

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How does the Commission “regulate” public utilities?• Ensures through various

proceedings rates charged are just, reasonable, and uniform.

• Rate cases• Commodity cost

adjustments• Investigations• Transfers of control• Securities Applications• Ensure public access to

rate schedules (tariffs) and utility rules and regulations

• Ensures public safety through facility and record inspections

FPC vs. Hope Natural Gas (1944)

• From the investor or company point of view, it is important that (just) prices are set such that there be enough revenue not only for operating expenses but also for the capital costs of the business – these include service on the debt (interest) and dividends on stock

• The return to the equity/stock owners should be commensurate with the returns on investments in other enterprises with similar risks sufficient to assure confidence in the financial integrity of the utility so as to maintain its credit and to attract capital.

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Basic Ratemaking Steps

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General Rate Case Procedure1. Filing of the Application and Supporting Written Testimony,

Data, Analysis

2. Public Notice of Filing

3. Petitions for Leave to Intervene

4. Pre-hearing or Scheduling Conference

5. Discovery Phase – Information or Data Requests

6. Filing of Written Testimony by Intervenors

7. Filing of Written Rebuttal Testimony by Applicant and Cross Answer Testimony by Intervenors

8. Evidentiary Hearing

9. Possible Legal Briefs

10. Public Deliberation

11. Decision

10

Regulation - substitute for competition

• Under public utility regulation, price, quality of service, profitability as well as entry and exit, are controlled by the state rather than being left to market forces.

11

12

In addition to contested case hearings, Commission action includes:

• Regular open meetings to act on matters that do not require a hearing, receive reports and information, etc.

• Rule-making

Wyoming Universal Service Fund (WUSF)

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Advocacy through the Office of the Consumer Advocate

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Wyoming Office of Consumer Advocate - Wyo. Stats. §§

37-2-401 through 404

• Represent the interests of Wyoming citizens and all classes of utility customers in matters involving public utilities by:• Intervening as a party in any proceeding before the

Commission;

• Appealing actions of the Commission;

• Appearing as amicus curiae in any court proceeding;

• Providing information and assistance to individual consumers regarding Commission proceedings.

15

Commission also protects consumers’ interests:

• Commission Rules – ensure accurate metering and billing, reasonable procedures for discontinuation of service, consistent commodity quality, etc.

• Commission Rules have various requirements for the company price schedules to ensure customers are aware of all costs.

• Commission can resolve complaints informally or after a contested case hearing (formally).

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For instance ---

• Utility Customer Outreach FY2016 - PSC complaint staff processed 232 complaints and 19 requests for information.

• 83% of these matters were resolved within 30 days, and 97% were resolved within 60 days. At the end of FY2016, all but 10 of these matters had been resolved.

• Complaints concerning telephone service accounted for 41% of the total, electric service 31%, gas service 26%, and water service 2%.

• 174 of 251, or 69%, of complaints pertaining to matters within the WPSC’s jurisdiction were categorized as service, billing, and disconnection issues.

• Customers that filed complaints received credits and refunds of over $16,000 during the year.

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INSPECTION

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Overview of inspection---• In FY2016, the Facility Engineering Section conducted

72.5 days of electrical utility inspection (104% of the 70-day inspection goal) and 167 days of natural gas utility and pipeline inspection.

• Under W.S. § 37-2-131 the WPSC has safety jurisdiction over certain transmission lines associated with wind generation facilities located in Wyoming. During FY2015 and 2016, these facilities were included in the electrical inspection cycle, with inspections performed at 7 of 14 jurisdictional wind generation facilities. • Wind generation facilities subject to Commission safety

jurisdiction will be placed in a five-year rotation after initial inspections.

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• The WPSC conducts natural gas pipeline safety inspections under authority delegated from the U.S. Department of Transportation’s Pipeline and Hazardous Material Safety Administration (PHMSA), Office of Pipeline Safety funded by a Grant-in-Aid program.

• The inspection program ensures consumers of natural gas have access to safe, adequate and reliable service.

• In FY2015 the Facility Engineering Section conducted 183 days of gas utility and natural gas pipeline operator inspection activity or 104% of the 176 inspection day PHMSA requirement.

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Wyo. Stat. § 37-3-114 - Safety Standards

• Additional examples of safety requirements in Commission Rules:

• Require service interruption reports for incidents likely to produce significant detrimental effect on customers–the reasons and the outcomes. (These reports are shared with Wyo. Homeland Security as necessary).

• Clear construction and maintenance standards and safety requirements.

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Telecommunications

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•WUSF Overview

•Qwest Un-credited FUSF Update

•Quality of Service Investigation Status

•Utility Complaint Comparison

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Today’s Telecom Presentation

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Wyoming

Universal

Service

Fund

•Purpose•Assist

Customers

•Rural Areas

•High Telephone Rates

•$30 Imputed Price Benchmark

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Wyoming Universal Service Fund

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Wyoming State Statute § 37-15-501

Universal Service Fund Created; Contributions; Administration

Subsection (a)

Telecommunications companies shall

contribute to the WUSF for all gross

intrastate retail voice service revenue

Local Telecom Companies

VoIP Companies

Broadband Providers

Cellular Companies

Radio Spectrum Companies

Other Wireless Technology Providers

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Subsection (b)

Commission designates method for calculation,

collection and distribution of contributions

Commission authorizes a monthly charge to

customers, to recover each contributor’s

required payment to WUSF

Any charge related to mobile service only

applies if the customer’s place of primary use

is in this state



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Subsection (c)

WUSF assists customers located in

rural areas with relatively high rates

for non-competitive essential (voice)

services

Commission determines a fair

method of distributing monies



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Two Methods of Distribution from the WUSF

Subsection (d)

TC’s receive WUSF support to the extent

that its essential service rate, after

consideration of any FUSF contributions,

exceed the $30 imputed price benchmark

Subsection (g)

TC’s receive WUSF support if its loop costs

exceed FUSF contributions plus its annual

local revenues



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• Subsection (h)

• Price Benchmark = $30

• Until July 1, 2019

• Unless changed by the

Commission

• Commission may change if the $30

price is not within 130% of the

weighted statewide average



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• Commission Does Not Regulate

• Cable/Television

• Broadband

• Cellular/Wireless Technology Services

• Long Distance Carriers

• Internet Providers

• Radio

• Payphone

• Directory Services



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WYOMING UNIVERSAL SERVICE FUND

ASSESSMENT LEVEL CALCULATION

FY 2017 - 2018

FY 2017-2018 Revenue Requirement

FY 2017-2018 Price Benchmark ($30.00) Annualized Monthly Support Payments 1 $ 1,534,698

Plus: FY 2017-2018 Maximum 501 (g) Disbursements $ 779,323

Total FY 2017-2018 Annualized Maximum Disbursements $ 2,314,021

FY 2017-2018 WUSF Annualized Administrative Expense $ 84,727

FY 2017-2018 WUSF 3-Month Fund Reserve $ 599,687

Less: Current Reserve as of March 31, 2017 $ 620,704

FY 2017-2018 WUSF Fund Reserve Net Requirement $ (21,017)

Less: FY 2017-2018 Annualized Investment Income $ 9,336

FY 2017-2018 Revenue Requirement $ 2,368,394

FY 2017-2018 Projected Revenue

FY 2016-2017 Annualized Monthly Revenue March 2017 (@ 1.3% assessment rate) X 12 2 $ 2,242,556

Less: FY 2017-2018 Revenue Required $ 2,368,394

FY 2017-2018 Projected Revenue Overage/(Shortage) $ (125,838)

FY 2017-2018 Projected Assessment Rate

FY 2017-2018 Revenue Requirement $ 2,368,394

(Divided by) /FY 2017-2018 Annualized (Gross-up) Assessment Intrastate Revenue for all Telephone Companies $ 172,504,287

FY 2017-2018 Approximate Assessment Rate Needed for Revenue Requirement 1.40%

Recommended Fund Assessment for FY 2017-2018 1.40%

1 Excludes elected cost-based

2 Includes forecasted historical annual revenue decline of 7.33%

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1.00%

6.00%

2.00%

3.00%

2.00%

3.00%

2.00%

4.00%

1.00%

0.00%

0.85%

1.05%

1.00%

1.20%

1.00% 0.80%

1.00%

1.20%

1.30% 1.40%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

1997 1998 1998 1998 1999 1999 1999 2000 2001 2003 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

WUSF HISTORICAL ASSESSMENT RATES

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$27.24

$24.36 $24.46 $24.87 $24.98

$25.85

$25.05 $24.60

$25.74 $25.44

$24.14

$22.86

$21.70

$21.53

$25.11

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

HISTORICAL STATEWIDE BENCHMARK AVERAGE

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$35.42

$31.67 $31.80 $32.33 $32.47

$33.61 $32.57

$31.98

$33.46 $33.07

$31.39

$29.71

$28.21

$27.98

$32.64

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

HISTORICAL 130% OF STATEWIDE BENCHMARK AVERAGE

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$3,040,688.06

$3,084,437.97

$3,152,886.85

$3,091,376.91

$2,814,546.10

$2,221,608.52

$2,343,257.30

$2,639,385.51

$2,419,937.13

$0.00 $500,000.00 $1,000,000.00 $1,500,000.00 $2,000,000.00 $2,500,000.00 $3,000,000.00 $3,500,000.00

FY 08-09

FY 09-10

FY 10-11

FY 11-12

FY 12-13

FY 13-14

FY 14-15

FY 15-16

FY 16-17

WUSF ANNUAL COLLECTIONS

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$2,676,481.38

$2,793,766.64

$3,251,929.32

$2,619,795.00

$2,544,811.56

$3,117,292.92

$1,974,249.72

$2,505,019.32

$2,350,791.82

$0.00 $500,000.00 $1,000,000.00 $1,500,000.00 $2,000,000.00 $2,500,000.00 $3,000,000.00 $3,500,000.00

FY 08-09

FY 09-10

FY 10-11

FY 11-12

FY 12-13

FY 13-14

FY 14-15

FY 15-16

FY 16-17

WUSF ANNUAL DISBURSEMENTS

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25,889

37,300

43,991

30,229

34,322

35,835

10,212

25,344

23,035

22,386

- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

FY 08-09

FY 09-10

FY 10-11

FY 11-12

FY 12-13

FY 13-14

FY 14-15

FY 15-16

FY 16-17

FY 17-18

ACCESS LINES SUPPORTED BY WUSF

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$30,027,026

$27,173,163

$25,614,793

$21,375,464

$18,826,449

$16,978,429

$18,426,152

$19,692,459

$18,790,672

$- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000

2008

2009

2010

2011

2012

2013

2014

2015

2016

FUSF SUPPORT RECEIVED BY WYOMING TELECOM COMPANIES

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79,055

79,749

74,816

59,445

60,675

56,471

54,458

56,947

47,351

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

2008

2009

2010

2011

2012

2013

2014

2015

2016

ACCESS LINES SUPPORTED BY FUSF

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QWEST

Un-credited

FUSF

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QWEST Corporation D/B/A CenturyLink QC

Investigation by the Commission

Credit of FUSF to Customers

Docket No. 70000-1424-TI-09 opened May 20, 2009

Final Order issued August 19, 2013

Investigation of FUSF Credit to Customers

Under the Price Plan, company was obligated to distribute all

FUSF to its customers

October 1, 1999 through December 31, 2012, company

received $6,991,995 more FUSF revenue than it credited to

customers

Uncredited FUSF amount continues to grow

As of March 31, 2017 uncredited balance is $8,846,533

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$5,487,070.00

$7,153,877.00

$8,382,519.00

$8,322,606.00 $8,080,275.00

$8,069,773.00

$8,684,337.00

$8,846,533.00

$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$7,000,000.00

$8,000,000.00

$9,000,000.00

$10,000,000.00

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

QWEST CORPORATION D/B/A CENTURYLINK QCFUSF CREDIT BALANCE

Balance as of Order Date 8/19/13

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QWEST

Quality of

Service

Investigations

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QWEST Corporation D/B/A CenturyLink QC

Quality and Reliability of

Telecommunications Service

Investigations by the Commission

THREE OPEN INVESTIGATIONS

Zone 3 of the Lusk Exchange

Zones 2 and 3 of the Wheatland Exchange

Zones 2 and 3 of the Rural Areas of Crook

County, Wyoming

Investigations have been consolidated into

one with the hearing scheduled for October

25-26, 2017

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Utility

Complaint

Comparison

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Four Year (Calendar Year) Utility Complaint

Comparison

42%

26%

31%

1%

2013

Telephone

Electric

Gas

Water

41%

29%

27%

3%

2014

Telephone

Electric

Gas

Water

41%

31%

26%

2%

2015

Telephone

Electric

Gas

Water

37%

32%

29%

2%

2016

Telephone

Electric

Gas

Water

Electricity Rates

48

51

Retail Rate De-Regulated Coops WPSC Regulated Utilities

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PacifiCorp/RMP Interstate Allocation Protocol

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CAISO Update

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PURPA

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PacifiCorp QFs (RMP Business Update 03/21/17)

PacifiCorp

QFs Current

MW

PacifiCorp

QFs in the

Queue MW QF Contract Length

CA 19 - 20

OR 496 652 20

WA 3 - 5

UT 1,042 2,366 15 Years

ID 194 -

2 Years (Contracts can

be up to 20 Years)

WY 483 1,417 20 Years

Total 2,237 4,435

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QF Effect on WY Rates• State commissions set the avoided cost prices for

purchase power agreements under PURPA.

• For PacifiCorp/Rocky Mountain Power, the 2017 Protocol assigns the costs associated with qualifying facility contracts on a system basis. However, if a portion of the cost of the QF exceeds the costs the Company would have otherwise incurred to acquire a comparable resource, the portion of the cost that exceeds the comparable resource is assigned on a situs basis to the jurisdiction that approved the contract.

• QFs were 5.41% of the total PacifiCorp/Rocky Mountain Power Portfolio MWh in 2016.

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Renewable Portfolio

Standards

63

Renewable Portfolio Standard (RPS) Effect on Wyoming Rates

• In the case of PacifiCorp/RMP, the utility pursues least cost, least risk compliance alternatives in its IRP planning process and resources procured through RFP.

• The 2017 Protocol includes: Jurisdiction-Specific Initiatives, which states that costs and benefits associated with Resources acquired in accordance with a Jurisdiction-specific initiative will be assigned on a situs basis to the Jurisdiction adopting the initiative. This includes, but is not limited to, the costs and benefits of incentive programs, net-metering tariffs, feed-in tariffs, capacity standard programs, solar subscription programs, electric vehicle programs, and the acquisition of renewable energy certificates (RECs can be utilized as part of meeting an RPS objective).

• When a utility requests to include any resource in Wyoming rates, the costs and prudence are scrutinized by the Commission.

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Renewable Portfolio Standards in PacifiCorp (RMP) Service Territory

Utah Oregon California Washington

20% by 2025 if cost-effective 5% by 12/31/11 20% by 12/31/13 3% by 1/1/12

15% by 12/31/15 25% by 12/31/16 9% by 1/1/16

20% by 12/31/20 33% by 12/31/20 15% by 1/1/20

27% by 12/31/25 40% by 12/31/24

35% by 12/31/30 45% by 12/31/27

45% by 12/31/35 50% by 12/31/30

50% by 12/31/40

Based on adjusted retail sales

for the calendar year 36

months before the target

year.

Based on retail load for

the year

Based on load for 3-year

compliance period.

Based on average load for

previous 2-years.

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Idaho does not have an RPS.

Thank you

Please do not hesitate to contact us with additional questions at 777-7427.

• Bill Russell, Chairman• Kara Brighton Fornstrom, Deputy Chair• Robin Sessions Cooley, Commissioner

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Wyoming Public Service Commission - wyoleg.gov · essentially serves a “gatekeeper” function...

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