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Home My WebLink About13638 RESOLUTION NO. 13638 A RESOLUTION EXPRESSING CITY COUNCIL’S CONCERN AND POSITION ON RECENT DEVELOPMENTS AT THE COLORADO PUBLIC UTILITIES COMMISSION REGARDING THE REQUEST BY BLACK HILLS ENERGY FOR THE REMOVAL OF A COMMISSIONER FROM PARTICIPATING IN A PENDING BLACK HILLS RATE MATTER WHEREAS, the City of Pueblo (“City”) is an electric service customer of Black Hills Energy (“Black Hills”); and WHEREAS, Black Hills is regulated by the Colorado Public Utilities Commission (“Commission”); and WHEREAS, Black Hills requested an increase in its electric rates affecting all its customers which the Commission docketed as proceeding 16AL-0326E (the “Rate Increase”); and WHEREAS, the City intervened and fully participated in the Rate Increase before the Commission; and WHEREAS, following hearings held by the Commission in October 2016, the Commission entered its decision in December 2016 decreasing the rate increase sought by Black Hills; and WHEREAS, in January 2017, Black Hills filed an application with the Commission requesting reconsideration of their rate decision; and WHEREAS, contemporaneously with its application for reconsideration, Black Hills also filed a request to disqualify Commissioner Francis Koncilja from any further participation in the Rate Increase proceeding (the “Request for Disqualification”); and WHEREAS, the City filed a response in opposition to Black Hill’s Request for Disqualification; and WHEREAS, in early January 2017, the Governor appointed two new Commissioners, namely Jeff Ackerman and Wendy Moser; and WHEREAS, on March 1, 2017, the Commissioners decided at their Open Meeting to deny the Black Hills Request for Disqualification on a 2-1 vote with Commissioner Moser indicating she would have granted the Request for Disqualification; and WHERAS, we note that Commissioner Moser was employed by Black Hills as its in-house counsel and chief regulatory counsel between 2011-2014; and WHEREAS, the City Council is concerned that Commissioner Moser did not recuse herself from participation in the Request for Disqualification and the Rate Increase proceeding; and WHEREAS, the City Council wishes to express its concern over the developments occurring at the Commission affecting customers of Black Hills; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pueblo, Colorado: SECTION 1. The above recitals are incorporated by reference in this Resolution. SECTION 2. Council reaffirms its support of Commissioner Koncilja in the pending Rate Increase proceeding. Commissioner Koncilja was extremely well prepared and we believe she fully and fairly considered the evidence presented in the proceeding. She acted diligently in trying to understand how the rates for Black Hills in Colorado had become as high as they are. We believe that was an appropriate inquiry in the proceeding and one which is of considerable public interest and importance to the citizens of the City. SECTION 3. We further believe that Commissioner Moser should have recused herself from participating in the Request for Disqualification and the Rate Increase proceeding. We understand that Commissioner Moser was not employed by Black Hills during the course of the proceeding, but her prior employment by Black Hills, her familiarity with several of the witnesses that Commissioner Koncilja asked probing questions of, and her prior involvement in rate case issues on behalf of Black Hills, should have prompted her to consider removing herself from any participation in the proceeding. Attorneys for regulated utilities such as Black Hills are not passive bystanders in rate cases before the Commission. They are intimately involved in every aspect of the proceeding, including issue identification, positions the regulated entity should take before the Commission, how those issues should be developed and presented on behalf of the utility, assisting witnesses in the preparation of their testimony, preparing the witness for cross-examination, and filing post-hearing pleadings on behalf of the utility. On information and belief, we assume Commission Moser played all these roles when she was employed by Black Hills, a mere three years ago. Issues before the Commission tend to extend beyond one discrete case and a three-year period is not that substantial to eliminate concerns of customers when a new Commissioner is appointed who has worked for the utility being regulated. Commissioner Moser’s refusal to voluntarily remove herself from the Rate Increase proceeding and then voting to involuntarily bar Commissioner Koncilja from further participation has had adverse impacts in the City and we believe it has served to diminish the credibility and trust of the Commission among local citizens and customers of Black Hills. As noted, the Council resolves its belief and position that Commissioner Moser should have recused herself from the Rate Increase proceeding. SECTION 4. City Council has been following the developments in the Rate Increase proceeding closely and with great interest. It is quite clear from what we read and hear that tensions are running pretty high at the Commission over the matters noted in this Resolution. We would like to see the Commission take a step back, breathe deeply and resolve to thoroughly and with passion investigate all issues in future proceedings involving Black Hills. Skeptical customers deserve a thorough and independent review of all future Black Hills’ cases that impact their rates. Furthermore, we would like to see senior officials at Black Hills view matters in a light more favorable to customers and not focus exclusively on investor interests. SECTION 5. This Resolution shall become effective immediately upon final passage. INTRODUCED March 13, 2017 BY: Chris Nicoll City Clerk’s Office Item # Q-4 Background Paper for Proposed RESOLUTION COUNCIL MEETING DATE: March 13, 2017 TO: President Stephen G. Nawrocki andMembers of City Council CC: City Attorney D. Kogovsek VIA: Gina Dutcher, City Clerk FROM: City Manager Sam Azad SUBJECT: A RESOLUTION EXPRESSING CITY COUNCIL’S CONCERN AND POSITION ON RECENT DEVELOPMENTS AT THE COLORADO PUBLIC UTILITIES COMMISSION REGARDING THE REQUEST BY BLACK HILLS ENERGY FOR THE REMOVAL OF A COMMISSIONER FROM PARTICIPATING IN A PENDING BLACK HILLS RATE MATTER SUMMARY: Attached is a resolution reflecting Council’s concern over developments at the PUC involving the attempted removal of Commissioner Koncilja from participating in the Black Hills pending rate increase proceeding and the refusal of Commissioner Moser to remove herself from participation in the proceeding. PREVIOUS COUNCIL ACTION: The City is an Intervenor in the pending Black Hills Rate increase case pursuant to previous action of the Council. BACKGROUND: At the Council work session on March 6, 2017, Staff was instructed to bring back a proposed resolution for Council review concerning the matter noted in the summary above. Black Hills unsuccessfully attempted to involuntarily remove Commissioner Francis Koncilja from any further participation in the rate increase pending before the PUC. The vote was 2-1 with new Commissioner Moser voting to remove Commissioner Koncilja. Commissioner Moser worked for Black Hills from 2011-2014 as its attorney. In light of this, this resolution expresses Council’s concern and position that Commissioner Moser should have voluntarily removed herself from both the request by Black Hills to remove Commissioner Koncilja as well as the rate increase case. FINANCIAL IMPLICATIONS: None. BOARD/COMMISSION RECOMMENDATION: None. STAKEHOLDER PROCESS: None. ALTERNATIVES: City Council could choose not to adopt the proposed resolution. RECOMMENDATION: This Resolution is at the request of City Council. Attachments: None.