S.D. regulators let some utilities stop reporting their COVID-19 debts and costs

Capitol News Bureau

Texans who shopped for electricity in 2014 paid more on average than folks who only had one power option. (Photo by Dan Atrill via The Texas Tribune)

PIERRE, S.D. (KELO) — South Dakota regulators have decided three investor-owned utilities that supply electricity and natural gas to thousands of customers in the state can stop publicly reporting their expenses from the coronavirus pandemic.

The South Dakota Public Utilities Commission agreed Friday that Montana-Dakota Utilities, MidAmerican Energy and NorthWestern Energy can withdraw from the docket.

Two others, Xcel Energy and Otter Tail Power, will continue filing quarterly reports. Black Hills Power declined to participate.

“COVID was a shared experience for all of us, but it was different for everybody as well,” Brett Koenecke, a Pierre lawyer representing MDU, told commissioners Friday. “And where we’ve ended up today is that it was different for all of the companies. Three of them feel the desire and the need to cease their participation and the other ones want to go on and see where the path leads.”

The commission opened the docket in August 2020 at the request of the five. The companies wanted a way to potentially adjust the amounts they charge on a temporary basis without going through full rate cases.

The reports show such things as higher operating costs and bad debts by customers from COVID-19.

“At the beginning of the pandemic I guess none of us knew for sure where this was all going to go,” said Jeff Decker, a rates specialist for NorthWestern Energy. “We certainly wanted the opportunity to recover, to be able to recover some bad-debt costs if needed to extreme levels and we watched that and tracked that, and earlier this year came to the determination that the amounts were not substantial as we feared they might become.

“Any costs that we had practically have written off. Currently the bad-debt expense is very near that of 2019. Things have returned much closer to normal,” Decker continued.

A commission analyst didn’t object to the three bowing out. “Given that these companies no longer plan to seek recovery for these COVID-related costs, staff views this request as appropriate,” Patrick Steffensen said.

Commissioner Gary Hanson said the withdrawals made sense to him. “I don’t know that there’s mounds of paperwork involved in something of this nature, but I’ll mention it might be. Regardless of that, it’s really good news to hear that people were paying their bills during this very, very challenging time. The companies were able to not use the COVID-related reimbursement funds.”

Commission chairman Chris Nelson spread praise.

“We really didn’t know and the companies didn’t know where this was going,” Nelson said. “We didn’t know if there were going to be substantial extra costs. We did not know what bad-debt levels were going to be. Just a lot of unknown.

“And so I think the commission was certainly on-board with creating these, the possibility of these regulatory assets, given that unknown. But I want to give great credit to these three companies that since that time have worked to aggressively manage their expenses and particularly manage their bad-debt amounts.”

Nelson recalled that when the commission decided to open the docket he was concerned about how the companies would handle the bad debt and whether they would be aggressive in working with customers to keep that level low.

“As we’ve heard today, these three companies have done that. And I want to say to these three, thank you for doing that and bringing us to this point where we can let you out of this docket and move forward with business as usual,” Nelson said. “Well done.”

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