BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

Size: px

Start display at page:

Download "BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION"

Milo McLaughlin
5 years ago
Views:

1 BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION SOUTHWESTERN PUBLIC SERVICE ) COMPANY'S APPLICATION FOR: (1) ) AUTHORIZATION TO FORM A ) SUBSIDIARY; (2) AUTHORIZATION TO ) CONTRIBUTE CERTAIN TRANSMISSION ) ASSETS TO THE SUBSIDIARY; (3) ) AUTHORIZATION TO SELL ITS ) INTEREST IN THE SUBSIDIARY TO XCEL ) ENERGY SOUTHWEST TRANSMISSION ) Case No UT COMPANY, LLC; (4) APPROVAL OF ) AGREEMENTS WITH AFFILIATED ) INTERESTS; (5) DETERMINATION THAT ) XEST'S CHARGES TO SPS UNDER THE ) SPP OATT ARE ELIGIBLE FOR ) RECOVERY IN SPS'S NEW MEXICO ) RETAIL RATES; AND (6) OTHER ) RELATED RELIEF ) ) SOUTHWESTERN PUBLIC SERVICE ) COMPANY, ) ) APPLICANT. ) ) following: NOTICE OF PROCEEDING AND HEARING NOTICE is hereby given by the New Mexico Public Regulation Commission of the 1. Southwestern Public Service Company ( SPS ) filed an Application with the New Mexico Public Regulation Commission ( Commission or NMPRC ) on October 29, In its Application, SPS explains that its parent company, Xcel Energy Inc. ( Xcel Energy ), has created subsidiary companies to own electric transmission companies that will operate in various parts of the United States. Xcel Energy has created these electric transmission companies in response to orders from the Federal Energy Regulatory Commission requiring regional planning for electric transmission facilities and competitive solicitation processes for owning and

2 constructing certain new electric transmission facilities. Xcel Energy created these new electric transmission companies to participate in these competitive solicitation processes. One of those newly created Xcel Energy electric transmission companies is Xcel Energy Southwest Transmission Company, LLC ( Southwest Transmission ). SPS owns electric transmission assets located in the states of Kansas and Oklahoma. SPS proposes to sell certain of its Kansas and Oklahoma electric transmission assets to Southwest Transmission in a transaction that involves several steps (as described in paragraph 2 of this notice). Southwest Transmission will pay SPS net book value for those electric transmission assets. SPS proposes to sell those Kansas and Oklahoma electric transmission assets to Southwest Transmission because (a) it is not feasible for SPS to participate in the competitive solicitation processes for transmission facilities outside of its service areas in New Mexico and Texas, (b) selling the assets to Southwest Transmission will assist Southwest Transmission to participate in the competitive solicitation processes for transmission facilities, and (c) Southwest Transmission s ownership of the Kansas and Oklahoma transmission assets will result in lower transmission costs being allocated to SPS s New Mexico retail customers. In addition to selling the Kansas and Oklahoma assets to Southwest Transmission, SPS has entered into an agreement with Southwest Transmission to maintain and operate the Kansas and Oklahoma transmission assets that Southwest Transmission is buying from SPS, and Southwest Transmission will pay SPS for those services. In addition, SPS and Southwest Transmission have entered into an agreement for SPS to provide Southwest Transmission with business and planning support services, and Southwest Transmission will pay SPS for those services. SPS also has entered into an agreement with a different Xcel Energy electric transmission company, Xcel Energy Transmission Development Company, LLC ( Transmission Development ), to provide Transmission Development with business and 2

3 planning support services, and Transmission Development will pay SPS for those services. In its Application, SPS asks the Commission to approve (a) SPS s sale of the Kansas and Oklahoma electric transmission assets to Southwest Transmission, (b) SPS s agreement with Southwest Transmission to operate and maintain the Kansas and Oklahoma electric transmission assets SPS is selling to Southwest Transmission, (c) SPS s agreements with Southwest Transmission and Transmission Development to provide business and planning support services, and (d) SPS s recovery of charges from Southwest Transmission for SPS s use of the Kansas and Oklahoma electric transmission assets SPS is selling to Southwest Transmission. 2. More specifically, SPS s Application requests that the Commission approve: (1) a transaction in which SPS: (a) forms a subsidiary called Hitchland Lamar LLC ( Hitchland Lamar ); (b) contributes certain transmission assets located in Oklahoma and Kansas to Hitchland Lamar in accordance with a Contribution Agreement between SPS and Hitchland Lamar; (c) sells its interest in Hitchland Lamar to Southwest Transmission in accordance with a Membership Interest Purchase Agreement ( Purchase Agreement ) between SPS and Southwest Transmission; and (d) Hitchland Lamar merges into and with Southwest Transmission, which will assume ownership of the assets of Hitchland Lamar (collectively, Southwest Transmission Transaction ), at which 3

4 point Hitchland Lamar will cease to exist as a legal entity and Southwest Transmission will be the surviving legal entity; (2) SPS s proposed Fifth Amended General Diversification Plan reflecting the creation of Hitchland Lamar; (3) a Transmission Operations and Maintenance Agreement ( O&M Agreement ) between SPS and Southwest Transmission; (4) an Administrative Services Agreement between SPS and Southwest Transmission; (5) an Administrative Services Agreement between SPS and Transmission Development; (6) SPS s right to recover in retail rates the wholesale transmission charges attributable to the assets owned by Southwest Transmission on the same terms and to the same extent as SPS recovers other charges assessed under the Southwest Power Pool ( SPP ) Open Access Transmission Tariff ( OATT ); and (7) any other relief the Commission determines is necessary for SPS to implement the approvals and authorizations requested in its Application. 3. The Kansas and Oklahoma assets at issue in the Southwest Transmission Transaction are: (1) approximately 230 miles of 345-kilovolt transmission facilities located in Kansas and Oklahoma, (2) the Finney Switching Station located in Kansas, (3) the Border Reactor Station located in Oklahoma, and 4

5 (4) other property rights associated with the assets. SPS proposes to contribute the assets to Hitchland Lamar at net book value of the facilities at the time of closing, and to then sell its ownership interest in Hitchland Lamar to Southwest Transmission at net book value. 4. As mentioned earlier, SPS and Southwest Transmission have entered into an O&M Agreement under which SPS will operate and maintain the Kansas and Oklahoma electric transmission assets SPS proposes to sell to Southwest Transmission. The O&M Agreement also applies to other transmission facilities Southwest Transmission may acquire in the future that Southwest Transmission asks SPS to operate and maintain (Southwest Transmission currently owns no transmission facilities). The O&M Agreement provides that SPS will furnish the proposed operation and maintenance services to Southwest Transmission at SPS s cost based on direct charges or appropriate allocations. SPS will bill Southwest Transmission for the services provided under the O&M Agreement on a monthly basis and receive payment in the normal course of business. 5. As also mentioned earlier, SPS and Southwest Transmission, and SPS and Transmission Development, have entered into Administrative Services Agreements concerning the sale of goods and provision of services between SPS and Southwest Transmission, and SPS and Transmission Development. Under the Administrative Services Agreements, SPS and Southwest Transmission/Transmission Development will sell goods and render services to each other at their respective cost of the goods and services. SPS and Southwest Transmission, and SPS and Transmission Development, will direct bill each other and receive payment in the normal course of business. 5

6 6. SPS requests that the Commission determine that Southwest Transmission s charges assessed to SPS under the SPP OATT may be recovered by SPS through its New Mexico retail rates. SPS is not requesting that the Commission determine in this case that any specific amount of charges should be approved, but rather that the Commission recognize that these types of charges associated with Southwest Transmission s activities are appropriate and recoverable through SPS s New Mexico retail rates. 7. The present procedural schedule established by the Commission for this proceeding is as follows: (a) Any person desiring to become a party to this case must file a Motion for Leave to Intervene in conformity with Rules (A) and (B) NMAC on or before January 27, (b) SPS shall file supplemental testimony in response to the questions posed in the Hearing Examiner's Procedural Order on or before January 29, (c) A technical conference to discuss the details of SPS's Application is scheduled for 9:30 a.m. on February 16, 2016 at the Hinkle Law Firm, 218 Montezuma Avenue, Santa Fe, NM 87501, Phone: (d) A settlement conference is scheduled for 9:30 a.m. on July 7, 2016 at the Hinkle Law Firm, 218 Montezuma Avenue, Santa Fe, NM (e) Staff and Intervenors shall file testimony on or before July 14, If a settlement is reached prior to this date, the settlement agreement shall be filed on this date with testimony in support of the settlement. (f) Rebuttal testimony shall be filed on or before July 29, 2016 (if there is no settlement). (g) A public hearing will be held beginning at 9:30 a.m. on August 9, 2016, and continuing thereafter through August 12, 2016, if necessary, in the Ground Floor Hearing Room of the Commission in the PERA Building, 1120 Paseo de Peralta, Santa Fe, New Mexico to hear and receive evidence, arguments and any other appropriate matters relevant to this proceeding. 8. The procedural dates and requirements of this case are subject to further order of the Commission or Hearing Examiner. Interested persons should contact the Commission for confirmation of the hearing date, time and place, since hearings are occasionally rescheduled without further published notice. 6

7 9. The Commission has assigned Case No UT to this filing and inquiries should refer to that case number. 10. The Commission's Procedural Rules found at NMAC shall apply to this proceeding except as modified by Order of the Commission or Hearing Examiner. A copy of such Rules may be obtained from the offices of the Commission or at Any interested person may obtain further information about this case and examine the filing together with any exhibits and related papers that may be filed in this case by contacting SPS or the Commission at the following addresses and telephone numbers: Southwestern Public Service Company Mike McLeod 111 East Fifth Street, Roswell, NM Telephone: (575) or Brooke A. Trammell 600 S. Tyler, Amarillo, TX Telephone (806) ; or the New Mexico Public Regulation Commission P.E.R.A. Building, 1120 Paseo De Peralta, Santa Fe, NM Telephone: Further information can also be obtained at and at "Case Lookup Edocket" on the Commission's website at Any interested person may appear at the time and place of hearing and make an oral or written comment pursuant to Rule (F) NMAC without becoming an Intervenor. Interested persons may also send written comments, which shall reference NMPRC 7

8 Case No UT, to the Commission at the address set out below. Such comments, however, are not considered as evidence in this proceeding. 13. Any person filing prepared testimony under I NMAC on behalf of a party shall attend the hearing and submit to examination under oath. 14. All documents filed with the Commission by mail shall be sent to: Records Bureau, New Mexico Public Regulation Commission, P.E.R.A. Building, P.O. Box 1269, Santa Fe, New Mexico, The following physical address of the Commission shall be used only for special or hand deliveries: 1120 Paseo de Peralta, Santa Fe, NM Copies of documents filed with the Commission must be served on all parties of record and the Commission's Utility Division Staff ("Staff") in the manner indicated on the Certificate of Service for this case. All filings shall be ed to Staff and the parties on the date they are filed with the Commission. All filings shall be ed to the Hearing Examiner at Ashley.Schannauer@state.nm.us. 16. Additional details regarding this proceeding and its procedural requirements are set forth in the Hearing Examiner's December 17, 2015 Procedural Order. 17. ANY PERSON WITH A DISABILITY REQUIRING SPECIAL ASSISTANCE IN ORDER TO PARTICIPATE IN THIS PROCEEDING SHOULD CONTACT THE COMMISSION AT LEAST 24 HOURS PRIOR TO THE COMMENCEMENT OF THE HEARING. 18. Individuals with a disability who are in need of a reader, amplifier, qualified sign language interpreter, or any other form of auxiliary aid or service to attend or participate in the hearing, may contact the Commission's docketing office at least 24 hours prior to the hearing. The Commission's docketing office may be reached at (505) Public documents 8

9 associated with the hearing can be provided in various accessible forms for disabled individuals. Requests for summaries or other types of accessible forms also should be addressed to the Utility Division at (888) ISSUED at Santa Fe, New Mexico, this December 17, NEW MEXICO PUBLIC REGULATION COMMISSION Ashley C. Schannauer Hearing Examiner 9

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) NOTICE TO SPS CUSTOMERS

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION IN THE MATTER OF SOUTHWESTERN PUBLIC SERVICE COMPANY S ENERGY EFFICIENCY COMPLIANCE APPLICATION THAT REQUESTS AUTHORIZATION TO: (1 PER APPROVED VARIANCE,