BEFORE THE PUBLIC SERVICE COMMISSION OF WYOMING

IN THE MATTER OF THE CONSIDERATION OF PROMULGATING CHAPTER 3, SECTIONS 325 THROUGH 329 OF THE COMMISSION’S PROCEDURAL RULES AND SPECIAL REGULATIONS REGARDING STANDARDS FOR (1) NET METERING, (2) FUEL SOURCE DIVERSITY, (3) FOSSIL FUEL EFFICIENCY, (4) SMART METERING AND (5) INTERCONNECTION FOR ELECTRIC UTILITIES

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Docket No. 90000-95-XR-06 (Record No. 10719)

ORDER

(Issued January 25, 2007)

            This matter is before the Wyoming Public Service Commission (Commission) upon the Commission’s decision to not promulgate new rules establishing energy efficiency-related standards for electric utilities regarding Net Metering, Fuel Source Diversity, Fossil Fuel Efficiency, Smart Metering and Interconnection.  The Rules, as originally proposed, include the following sections:

                        SECTION                                           TITLE

325 Net Metering

326 Fuel Source Diversity

327 Fossil Fuel Efficiency

328 Smart Metering

329 Interconnection

            The Commission, having reviewed the record of the proceeding and the comments filed with respect thereto, applicable utility law, and otherwise being fully advised in the premises, FINDS and CONCLUDES:

PROCEDURAL HISTORY

            1.         This proceeding was initiated by the Commission, on its own motion to consider the adoption of Sections 325 through 329 of its Procedural Rules and Special Regulations in order for the Commission to comply with federal law and regulatory requirements delineated in the Public Utility Regulatory Policies Act of 1978 (PURPA), as amended by the federal Energy Policy Act of 2005 (EPAct 2005).  See 16 U.S.C. § 2621(d).  According to EPAct 2005, enacted on August 8, 2005, state regulatory commissions must “commence the consideration”, but not necessarily the adoption, of PURPA Standards (14) Smart Metering and (15) Interconnection by August 8, 2006, and must complete consideration by August 8, 2007.  See EPAct 2005, § 1251(b)(1), which amends 16 U.S.C. § 2622(b). The Commission’s consideration of PURPA Standards (11) Net Metering, (12) Fuel Source Diversity and (13) Fossil Fuel Efficiency must begin by August 8, 2007, and must be complete by August 8, 2008.  See EPAct 2005 §§ 1252(g) and 1254(b)(1), which also amends 16 U.S.C. § 2622(b).  The proposed new rules meet minimum federal requirements.

2.         Sections 325 through Section 329 of the Wyoming Public Service Commission’s Procedural Rules and Special Regulations are being proposed to meet PURPA standards requiring state public utility commissions, under the EPAct 2005, to formally consider adopting these standards in Wyoming. The standards concern Net Metering, Fuel Source Diversity, Fossil Fuel Efficiency, Smart Metering and Interconnection.  Because of the related nature of the standards to be considered, the Commission commenced consideration of all standards in the same proceeding.

            3.         On July 24, 2006, the Commission notified the Governor of its intent to consider promulgating Sections 325 through 329 of its Procedural Rules and Special Regulations to conform with the directives of PURPA.  On July 27, 2006, the Office of the Governor provided the Commission with written confirmation that it could proceed with the rulemaking.

            4.         On August 4, 2006, the Commission issued an Order Commencing Rulemaking.   Notice of the Commission’s consideration of Sections 325 through 329 of its Procedural Rules and Special Regulations was published once per week for two consecutive weeks in the legal notice sections of the Riverton Ranger, Daily Rocket-Miner, Daily Times, The News-Record, Sheridan Press, Wyoming Tribune-Eagle, Daily Boomerang, Jackson Hole Guide¸ Powell Tribune, Northern Wyoming Daily News, Cody Enterprise, Uinta County Herald and Casper Star Tribune.  Public Service Announcements were broadcast on KTWO-AM radio in Casper, KGAB radio in Cheyenne, KYTI-FM radio in Sheridan, KIML-AM radio in Gillette, KRAL radio in Rawlins, KRKK-AM radio in Rock Springs, KTMN-FM radio in Jackson, KPOW-AM radio in Powell, KWOR-AM radio in Worland, KODI radio in Cody and KEVA-AM radio in Evanston.  Additionally, all jurisdictional electric utilities were sent copies of the Commission’s Order Commencing Rulemaking, the Notice and Intent and the proposed rules.  Several electric utilities, several individuals, the Office of Consumer Advocate (OCA) and the Wyoming Rural Electric Association (WREA) provided comments with regard to the Commission’s consideration and adoption of Sections 325 through 329 of its Procedural Rules and Special Regulations.

            5.         On October 31, 2006, Walter F. Eggers, III, counsel for Wyoming Industrial Energy Consumers (WIEC), filed a Motion for Admission Pro Hac Vice of Robert M. Pomeroy, Jr. (Motion), asking that Pomeroy be admitted to practice before the Commission for all purposes in this proceeding.  The Motion was supported by Certificates of Compliance with Rule 11 issued by the Wyoming State Bar on November 1, 2006.

            6.         On November 1, 2006, the Commission issued its Order Granting Admission Pro Hac Vice of Robert M. Pomeroy.

            7.         On November 1, 2006, the Commission issued its Special Order Authorizing One Commissioner and/or Hearing Examiner to Conduct Public Hearing.

            8.         The public hearing in this proceeding was held on November 1, 2006.  Representatives for OCA, Montana-Dakota Utilities, Rocky Mountain Power, Cheyenne Light Fuel and Power, WIEC and WREA appeared and offered comments regarding the Commission’s proposed adoption of Sections 325 through 329 of its Procedural Rules and Special Regulations.

            9.         Deliberations were held on November 17, 2006, with regard to this matter.  The Commission determined it would not adopt any of the rules.

PROCEDURAL CONSIDERATIONS

            10.       This rulemaking proceeding was properly initiated pursuant to the provisions of W.S. § 16-3-103.

            11.       Proper notice of this rulemaking proceeding was provided pursuant to the W.S. § 16-3-103(a)(i).  Such notice was correct in content, form, time and distribution.

            12.       A hearing was held pursuant to the provision of W.S. § 16-3-103(a).

CONCLUSIONS OF LAW

            13.       The Commission, during deliberations held in this matter, determined it would not adopt Sections 325 through 329 of its Procedural Rules and Special Regulations, as delineated below: 

a.         Section 325, Net Metering.  The Commission finds the comments provided by the parties to this proceeding indicated there was no support for this section as proposed.  The Commission finds there is some interest from one commenter to revisit the net metering standard; however, there is not sufficient interest at this time to make changes.  The Commission further finds and concludes W.S. §§ 37-16-101 through 104, as adopted by the Wyoming Legislature in 2001 and amended in 2003, is complete and sufficient to meet the net metering standard as proposed in 16 U.S.C § 2621(d)(11).  Since Wyoming implemented a net metering standard prior to the enactment of EPAct 2005, subsections (b) and (c) of 16 U.S.C. § 2622, providing for the timeline for Commission consideration and determination of a net metering standard, shall not apply.  The net metering standard is grandfathered, and the Commission finds and concludes Section 325 should not be adopted.

                        b.         Section 326, Fuel Source Diversity.  The Commission finds the comments provided by the parties to this proceeding indicated there was no support for this section.  The Commission further finds and concludes resource planning by utilities addresses fuel source diversity and is a better approach for this issue than a rulemaking.  The Commission finds the resource planning legislation pending for the 2007 Wyoming legislative session may address several issues related to fuel source diversity, and several utilities already go through resource planning.  The Commission finds and concludes Section 326 should not be adopted.

                        c.         Section 327, Fossil Fuel Efficiency.  The Commission finds the comments provided by the parties to this proceeding indicated there was no support for this section.  The Commission further finds the marketplace will address fossil fuel efficiency and these issues are more proactive to a resource planning process.  The Commission finds and concludes Section 327 should not be adopted.

                        d.         Section 328, Smart Metering.  The Commission finds the comments provided by the parties to this proceeding indicated there was no support for this section.  The Commission finds adoption of this section is not a real opportunity for Wyoming ratepayers because the economic and social makeup of the state does not make smart metering a useful tool.  However, the Commission finds there is support from the commenters to hold a technical conference on the subject of smart metering.  Additionally, the Commission finds adoption of Section 328(D), regarding third-party marketers’ ability to sell electric energy to retail customers, would be illegal in Wyoming.  Section 328(D) is inconsistent with state law, and 16 U.S.C. § 2623(a)(1) requires the PURPA standards, if adopted, to be consistent with state law.  The Commission finds and concludes Section 328 should not be adopted.

e.         Section 329, Interconnection.  The Commission finds the comments provided by the parties to this proceeding indicated there was no support for this section.  However, the Commission finds there is support from the participants to hold a technical conference, especially relating to how interconnection affects small generators of electricity and how to address safety and reliability with interconnections.  The Commission finds some elements of interconnection, as proposed in 16 U.S.C § 2621(d)(15), are addressed in Wyoming’s net metering statutes (W.S. §§ 37-16-101 through 104), and interconnection is addressed in tariffs filed by individual utilities.  Since Wyoming implemented some elements of an interconnection standard prior to the enactment of EPAct 2005 and the Commission has considered utility tariff filings, subsections (b) and (c) of 16 U.S.C. § 2622, providing for the timeline for Commission consideration and determination of an interconnection standard, shall not apply.  Therefore, some elements of an interconnection standard are grandfathered.  The Commission finds and concludes Section 329 should not be adopted.

14.       The Commission also determined it would hold a technical conference to explore smart metering and interconnection as recommended by parties in their comments and at hearing. 

IT IS THEREFORE ORDERED:

1.         Pursuant to deliberations held on November 17, 2006, in this matter, the rulemaking proceeding with regard to Sections 325. Net Metering., 326. Fuel Source Diversity., 327. Fossil Fuel Efficiency., 328. Smart Metering., and 329. Interconnection., is abandoned for the reasons established in paragraph 13a. through e., above.

            2.         This Order is effective immediately.

MADE and ENTERED at Cheyenne, Wyoming, this 25^th day of January 2007.

                                                            Public Service Commission of Wyoming

                                                            STEVE FURTNEY, Chairman

                                                            KATHLEEN A. LEWIS, Deputy Chair

                                                            MARY BYRNES, Commissioner

(SEAL)          

ATTEST:

J. BLAIR BALES, Assistant Secretary