`BEFORE THE
`FEDERAL ENERGY REGULATORY COMMISSION
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`BASIN ELECTRIC POWER COOPERATIVE
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`|
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`DOCKET NO. ER20284000
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`MOTION TO INTERVENE AND COMMENTS OF
`ROSEBUD ELECTRIC COOPERATIVE INC.
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`Pursuant to Rules 212 and 214 of the Rules of Practice and Procedure of the Federal
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`Energy Regulatory Commission (“Commission”)1 and the November 1, 2019 Combined Notice
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`of Filings #1 issued in the abovecaptioned docket, Rosebud Electric Cooperative Inc. (“Rosebud
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`Electric”) respectfully moves to intervene and submits these comments in support of Basin
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`Electric Power Cooperative’s (“Basin Electric”) filing in this proceeding.2 In the November 1
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`Filing, Basin Electric submitted a revised Rate Schedule A, which establishes a comprehensive
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`cost of service rate for the service that Basin Electric provides to its eighteen Class A member
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`cooperatives and one Class D member cooperative (individually, a “Member,” and collectively,
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`“Members”) pursuant to the terms of wholesale power contracts (“Wholesale Power Contracts”).
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`The Basin Electric Board of Directors (“Basin Electric Board”) approved the revised Rate
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`Schedule A in August 2019 to implement a one mill decrease in the rates assessed under Rate
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`Schedule A beginning in January 1, 2020. Rosebud Electric respectfully requests that the
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`Commission approve the revised Rate Schedule A effective January 1, 2020, as filed.
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`1
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`2
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` 18 C.F.R. §§ 385.212 and 385.214 (2019).
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` Basin Electric Power Cooperative, Submission of Revised Rate Schedule A, Docket No. ER20284000 (filed
`Nov. 1, 2019) (“November 1 Filing”).
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`Docket No. ER20284000
`Page 6
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`I.
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`MOTION FOR LEAVE TO INTERVENE
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`Rosebud Electric Cooperative Inc.
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` Rosebud Electric is a notforprofit memberowned electric distribution cooperative serving
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`South Central South Dakota, was established in 1945. Today, Rosebud Electric owns and operates
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`approximately 29 miles of transmission lines and 7 related substations and over 2,395 miles of
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`distribution lines, which are interconnected with the facilities of Western Area Power
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`Administration – Upper Great Plains Region (“WAPAUGP”) and Basin Electric. In 2018, Rosebud
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`Electric’s sales totaled about 92,116 megawatt hours of electricity. Rosebud Electric is governed by
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`a 9member Board of Directors. Rosebud Electric is a Class A member of Basin Electric. Rosebud
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`Electric is a borrower under the United States Department of Agriculture’s Rural Utilities Service
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`program. Finally, because Rosebud Electric sells less than 4,000,000 megawatt hours of electricity
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`per year, it is not a “public utility” under section 201(e) of the FPA by virtue of section 201(f) of the
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`FPA. 16 U.S.C. §§ 824(e) and 824(f).]
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`As a Member of Basin Electric that pays rates according to Rate Schedule A, Rosebud
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`Electric has a direct and substantial interest in the outcome of this proceeding that cannot be
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`adequately represented by any other participant. Accordingly, Rosebud Electric respectfully
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`requests that it be granted full party status in this proceeding.
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`II.
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`COMMUNICATIONS
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`Please send all correspondence regarding this matter to the following individuals3:
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`Kevin Mikkelsen
`Rosebud Electric Cooperative Inc.
`512 Rosebud Ave , Gregory SD 57533
`Telephone:16058359624
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`3
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`Docket No. ER20284000
`Page 6
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`III. COMMENTS IN SUPPORT
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`The Commission should approve the revised Rate Schedule A as filed because it is just and
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`reasonable and results in an overall rate decrease for Basin Electric’s Members. As Basin Electric
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`explained in its November 1 Filing, the Basin Electric Board approved the revised Rate Schedule A
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`in August 2019.4 The revised Rate Schedule A is intended to implement an overall rate decrease of
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`one mill beginning on January 1, 2020.5 In midOctober 2019, subsequent to the date on which
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`Basin Electric submitted several filings to the Commission in anticipation of becoming subject to
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`the Commission’s jurisdiction, the Basin Electric Board unanimously reaffirmed the August 2019
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`Basin Electric Board approval of the revised Rate Schedule A.6
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`The Basin Electric Board’s decision to reaffirm its earlier approval of revised Rate Schedule
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`A highlights that the revised Rate Schedule A is just and reasonable. As Basin Electric explained in
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`its November 1 Filing, Basin Electric’s rate review process for Rate Schedule A revisions is robust.7
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`First, the Basin Electric Board is required to review the rates at least annually and to revise the rates
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`as necessary.8 Second, in addition to the Basin Electric Board review of the rates, Basin Electric
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`discusses Rate Schedule A and its rates with and solicits feedback from the Basin Electric Board, its
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`Member managers, and its general membership multiple times per year.9 [Member Short Name] has
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`elected a representative to the Basin Electric Board and that representative participates in the Basin
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`Electric Board meetings, representing Rosebud Electric’s interests in those meetings. Rosebud
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`4
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`5
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`6
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`7
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`8
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`9
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` November 1 Filing at 15.
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` Id.
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` Id. (referencing November 1 Filing, Attachment G).
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` November 1 Filing at 18.
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` Id.
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` Id.
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`Docket No. ER20284000
`Page 6
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`Electric also is represented by the District 9 Manager at the meetings that Basin Electric holds four
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`to six times each year and on the monthly calls. The District manager group is made up of one
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`manager from each of the eleven districts within Basin Electric.10 In addition, Basin Electric also
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`discusses its rates and Rate Schedule A at the January and July meetings it holds with all Member
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`managers, including Rosebud Electric’s General Manager. Finally, Rosebud Electric’s members
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`also have the opportunity to participate in the annual meeting that Basin Electric holds each
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`November. Through this robust review process, any disputes concerning the rates included in Rate
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`Schedule A are resolved through the democratic cooperative governance process. In other words,
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`while not all Members may be happy with the proposed rates, they all agree that the rates derived
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`through this annual process are appropriate and in the Members’ collective interest. This is
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`evidenced by the Basin Electric Board resolution reaffirming the proposed revised Rate Schedule
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`A.11
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`Because Rate Schedule A is an attachment to the Wholesale Power Contracts that Basin
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`Electric’s Class A and Class D Members executed and is itself reviewed and approved by the Basin
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`Electric Board, the Commission should employ the more rigorous public interest application of the
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`just and reasonable standard of review when considering the rates reflected on the revised Rate
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`Schedule A. Under the MobileSierra doctrine,12 the Commission “must presume that the rate set
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`out in a freely negotiated wholesaleenergy contract meets the ‘just and reasonable’ requirement
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`imposed by law. The presumption may be overcome only if [the Commission] concludes that the
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`10
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`11
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`12
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` Id.
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` See November 1 Filing, Attachment G.
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` The MobileSierra doctrine refers to the authority of the Commission to modify rates set bilaterally by contract
`rather than unilaterally by tariff as described in United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332
`(1956), and FPC v. Sierra Pacific Power Co., 350 U.S. 348 (1956). The application of the MobileSierra
`presumption to contract rates also often is referred to as the “public interest standard.”
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`Docket No. ER20284000
`Page 6
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`contract seriously harms the public interest.”13 Basin Electric’s Wholesale Power Contracts are
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`freely negotiated bilateral agreements between Basin Electric and its Members that play a
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`significant role in ensuring that Basin Electric has access to capital.14 Moreover, the cooperative
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`structure and the wholesale power contracts underlying that structure allow Basin Electric’s
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`Members to take advantage of economies of scale.15 Basin Electric’s Wholesale Power Contracts
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`and the associated rates are not generally applicable tariffs or rates.16 Instead, applicability is
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`restricted to Basin Electric and its Members.17 Further, the rates charged under Rate Schedule A are
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`agreed to by Basin Electric’s Members, benefit Basin Electric’s Members, and do not harm the
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`public interest.18 Thus, as it has done when reviewing other cooperatives’ contracts,19 the
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`Commission should apply the public interest standard when reviewing the rates reflected on the
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`revised Rate Schedule A and find them to be just and reasonable.
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`13
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`14
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`15
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`16
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`17
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`18
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`19
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` Morgan Stanley Capital Group Inc. v. Pub. Util. Dist. No. 1 of Snohomish County, 554 U.S. 527, 530 (2008).
`While “regulated parties have retained broad authority to specify whether [the Commission] can review a contract
`rate solely for whether it violates the public interest or also for whether it results in an unfair rate of return . . . the
`MobileSierra presumption remains the default rule.” Id. at 534.
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` November 1 Filing at 11, 13.
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` Id. at 13.
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` Id. at 13.
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` Id.
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` Id. at 14.
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` See, e.g., N. Va. Elec. Coop., Inc. v. Old Dominion Elec. Coop., 114 FERC ¶ 61,240, at P 18 (2006) (rejecting a
`complaint by Northern Virginia Electric Cooperative, Inc. (“NOVEC”) requesting that the Commission modify
`NOVEC’s wholesale power agreement with Old Dominion Electric Cooperative).
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`Docket No. ER20284000
`Page 6
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`IV. CONCLUSION
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`WHEREFORE, for the foregoing reasons, Rosebud Electric Cooperative Inc. respectfully
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`requests that the Commission grant its motion intervene and approve the revised Rate Schedule A
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`effective January 1, 2020, as filed.
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`Respectfully submitted,
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`Rosebud Electric Cooperative Inc.
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`/s/ Kevin Mikkelsen
`Kevin Mikkelsen
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`512 Rosebud Ave. Gregory SD 57533
`16058359624
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`Kevin Mikkelsen/ Manager
`Rosebud Electric Cooperative Inc.
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`November 21,2019
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`CERTIFICATE OF SERVICE
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`I hereby certify that I have served this day copies of the foregoing on the official service
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`list compiled by the Office of the Secretary in accordance with Rule 2010 of the Commission
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`Rules of Practice and Procedure.
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`Dated at Washington, D.C. this 21nd day of November, 2019.
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`/s/ Kevin Mikkelsen
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`Kevin Mikkelsen
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`Rosebud Electric Cooperative Inc.
`512 Rosebud Ave. Gregory, SD 57533
`Telephone: 16058359624
`EMail: klmikk@gwtc.net
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`General Manager for
`Rosebud Electric Cooperative Inc.
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