Department of Public (D/B) Versus Precedent Agreements in Tennessee

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1 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE ATTORNEY GENERAL ONE ASHBURTON PLACE BOSTON, MASSACHUSETTS (617) (617) TTY Laurie Ellen Weisman, Hearing Officer Department of Public Utilities One South Station, 5 th Floor Boston, MA May 11, 2015 Re: National Grid, D.P.U and Bay State Gas, D.P.U Procedural Schedule Dear Hearing Officer Weisman: On May 7, 2015, the Department of Public Unities ( Department ) conducted a public hearing to receive comments on the petitions of Boston Gas Company d/b/a National Grid, and Bay State Gas Company d/b/a Colombia Gas of Massachusetts (collectively the Companies ) for approval of their Precedent Agreement with Tennessee Pipeline Company, LLC ( Tennessee ), docketed as D.P.U and D.P.U , respectively. The Department indicated that the matters were not consolidated. At the public hearing, approximately 30 members of the public (not including representatives for the Companies and the intervenors) were present, and approximately fourteen members of the public made comments. At the conclusion of the public hearing, the Department conducted a procedural conference, at which time the Department and the Companies presented their proposed procedural schedules for the first time. 1 While the proposed procedural schedules had different internal deadlines, both procedural schedules assumed that (1) both Northeast Energy Direct Precedent Agreement dockets would follow the same procedural schedule, but would not be consolidated; and (2) the Department must issue its Order in each case by September 1, During an off the record discussion, the Department questioned the firmness of the September 1, 2015 deadline proposed by the Companies and whether Department approval of the Companies Precedent Agreements is a prerequisite to a formal FERC certificate of convenience 1 The Companies provided the Attorney General s Office with a copy of their proposed procedural schedule on May 7, 2015 at 10:54 am.

2 and public necessity ( Certificate ) application. Back on the record, the Department asked the Companies to provide the Department with answers to these questions. The Department then withheld its ruling on a procedural schedule, and set Monday, May 11, 2015 at 12:00 p.m. as the deadline for parties to file comments on the procedural schedule. On Friday afternoon May 9, the Companies submitted a response to the Department s questions. The response is noteworthy for what it does not say. First, it does not say that the September 1, 2015 deadline is firm. Indeed, it is clear from the Precedent Agreements themselves that the September 1, 2015 deadline is far from firm. The parties have already negotiated an extension of that deadline once and could do so again. The lack of firmness is further demonstrated by the lack of any penalty or other negative ramification if the Companies fail to obtain Department approval by September 1. Indeed, the Companies do not assert that they will incur liability if they do not obtain Department approval by September 1. Second, the Companies response also does not say that Department approval is a prerequisite for a formal FERC Certificate application. What is clear from the Companies response, however, is that even if there were such a requirement, Tennessee is still in the prefiling stage at FERC, several steps away from being able to file its formal FERC Certificate application. As the attached FERC flowchart shows, 2 FERC must take the following actions before Tennessee may file its formal FERC Certificate application: (1) issue a Notice of Intent for preparation of an Environmental Impact Statement; (2) hold multiple scoping meetings; (3) make site visits; (4) consult other agencies; and (5) take public comment. The Companies do not assert that these steps will be completed by September 1 nor do they cite any FERC requirement for filing a formal Certificate application by any date certain or that Tennessee has any informal FERC deadline for doing so. If September 1 was at one point a meaningful date, it is clear that it no longer is. Indeed, if the Department issues its Orders at the end of November, Tennessee could still meet its target of a 4th Quarter filing with FERC. While there is no meaningful reason to rush this important proceeding, there are many reasons for not doing so. First, as demonstrated by the public hearing, there is great interest in this case. It is important that the Department provide the parties and the public with adequate time to consider, question, and testify about the Companies proposal. For the Attorney General s Office ( AGO ), this means, among other things, having enough time to engage expert witnesses and to coordinate their schedules. Because the Department has yet to authorize the AGO to hire experts, the AGO has been unable to hire experts and do this coordination. Second, if the Department intends on using the same procedural schedule in the Berkshire Gas Company ( Berkshire ) Precedent Agreement docket (D.P.U ), the Department should allow Berkshire and any other person who wants to comment or intervene the opportunity 2 2

3 to comment on the schedule before the Department issues it. Yet, the Berkshire public hearing and procedural schedule is not scheduled until May 26, If the same schedule is adopted on May 26, the parties to D.P.U will have lost two weeks of their discovery period. Third, multiple parties have filed petitions to intervene in D.P.U and D.P.U (and are likely to do so in D.P.U ). By adopting a procedural schedule before ruling on the extent of participation of all the parties, the Department creates uncertainty and may limit a future party s ability to fully participate. A potential party who is uncertain as to whether they will be granted intervenor status, may be reluctant to expend resources to engage witnesses or conduct discovery before knowing their status. Later, even if the Department grants them party status, they will not be afforded catch-up time to conduct their discovery or submit testimony. Given the above, the AGO offers the following procedural schedule, which allows for a more reasonable procedural pace and a Department Order by November 30: June 1, 2015 July 17, 2015 July 31, 2015 If no intervenor testimony August 10 to August 14, 2015 September 11, 2015 October 2, 2015 November 30, 2015 If intervenor testimony August 7, 2015 August 21, 2015 September 4, 2015 September 11, 2015 September 14 to September 18, 2015 October 16, 2015 November 6, 2015 November 30, 2015 Deadline for intervenors to provide notice of intent to file testimony Deadline for issuing discovery on the Company Final discovery responses from the Company due Evidentiary hearings Initial briefs due Reply briefs due Order from Department due Deadline for intervenors to file direct testimony Deadline for issuing discovery to intervenors Final discovery responses from intervenors due Deadline to file rebuttal testimony, if any Evidentiary Hearings Initial briefs due Reply briefs due Order from Department due 3

4 Thank you for your attention to this matter. Please do not hesitate to contact me if you have any questions regarding this filing. Sincerely, /s/ Matthew E. Saunders Matthew E. Saunders Assistant Attorney General cc: Mark Marini, Secretary Service List, D.P.U and D.P.U

5 COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES Boston Gas Company d/b/a National Grid Bay State Gas Company d/b/a Colombia Gas of Massachusetts D.P.U D.P.U CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon all parties of record in these proceedings in accordance with the requirements of 220 C.M.R. 1.05(1) (Department s Rules of Practice and Procedure). Dated at Boston this 11th day of May, /s/ Matthew E. Saunders Matthew E. Saunders Assistant Attorney General Massachusetts Attorney General Office of Ratepayer Advocacy One Ashburton Place Boston, MA (617)