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N.D. regulators approve four-year rate increase plan for Xcel Energy Mike Nowatzki, Forum News Service

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BISMARCK – Xcel Energy customers in North Dakota will see rate increases – and a refund – under a rare four-year agreement approved Wednesday that state regulators said will address some longstanding challenges with the company and give customers more certainty. The North Dakota Public Service Commission unanimously accepted the agreement, which will allow Xcel to collect a projected $28.4 million in additional revenue through 2016 to help extend the lives of its nuclear power plants, expand its transmission grid and upgrade its distribution system. The agreement provides for rate increases of 4.9 percent in 2013, 2014 and 2015 and a rate freeze in 2016 for Xcel’s approximately 90,000 customers in North Dakota, primarily in Fargo, Grand Forks, Minot and West Fargo. The new rates take effect May 1. The average residential customer will see an increase in their monthly bill of about $1.22 over current rates in 2014, followed by an increase of $3.43 in 2015, based on monthly usage of 750 kilowatt hours, PSC staff estimated. Because customers have been paying an interim rate increase of 8.05 percent since February 2013, the average customer will receive a refund of about $19 credited to their account. The agreement concludes 14 months of negotiations that began when Xcel filed a request in December 2012 for a one-year, 9.25 percent rate hike that would have generated $16.9 million in additional revenue. The rate increases approved Wednesday will allow Xcel to collect $28.4 million in additional revenue over the four-year term, believed to be the longest rate agreement in company history, said David Sederquist, a senior consultant for regulation and financial analysis at Xcel’s office in Fargo. “We believe that this settlement is a very reasonable and fair settlement,” he said. Even with the rate increases in this agreement, the commission said Xcel’s rates in North Dakota are projected to remain among the lowest in the Midwest and about 15 percent lower than the national average through 2016. ‘A fundamental shift’ Commissioner Julie Fedorchak said she favored a multiyear agreement because the three-member commission knew the company would otherwise be return for additional rate increases. “So ultimately I believe it’s beneficial to ratepayers because it locks it in. We know exactly what the rate increase is going to be … through this investment cycle,” she said. In addition to the rate increases, the agreement contains several provisions aimed at reducing costs to North Dakota customers. “It’s a fundamental shift in how North Dakota deals with Xcel Energy and Minnesota policies,” commission chairman Brian Kalk said. The biggest benefit, he said, is the ability for the PSC to “restack” the energy resources North Dakota customers are paying for as a result of Minnesota’s alternative energy mandates, mainly with regard to wind and solar power. The commission estimates restacking could reduce future costs to North Dakota customers by about $5 million. “Now our staff and (the commission) can sit down with Xcel and say, ‘OK, these resources that you’re building to meet Minnesota mandates, North Dakota customers aren’t going to pay for them,’” Kalk said. Sederquist said Minneapolis-based Xcel has “a lot of work to do” with the Minnesota Public Utilities Commission and state policymakers to make the case that costs which now may not be recovered in North Dakota could be recoverable in Minnesota “because some of them stem from Minnesota policy.” With the agreement, the company takes the risk that Minnesota regulators may not agree, and stranded costs could fall to Xcel’s investors. “That is a very real risk,” he said. Commitment made The agreement also requires a third party to conduct a one-year study of the formula Xcel uses to spread certain generation and transmission costs among states where it does business. The current formula has been used for 20 years, and some analysts believe it may overcharge North Dakota customers for their part of the total system costs, Fedorchak said. A formula change that’s been discussed by the PSC would save Xcel’s North Dakota customers $20 million a year, she said. Fedorchak also called it a “huge win” that the agreement includes a commitment from Xcel to develop thermal generation resources in North Dakota no later than 2036. Last spring, Xcel proposed adding two 215-megawatt, natural gas-fired generators near Hankinson in the southeastern corner of North Dakota, but the company later backed away from the proposal to the disappointment of PSC members. Commissioners said the commitment is important because of rising demand from Xcel’s customer base in the Red River Valley and that fact that the company currently has no generation facilities in North Dakota. Sederquist said there’s a likelihood Xcel will move forward with a project earlier than 2036, but he added, “It’s not going to be a plant that’s simply built because of a commitment. There’ll need to be a need and there’ll have to be a cost-effective analysis of that.” Deal contains savings Commissioner Randy Christmann said that with interest rates low for commercial financing, the rate hikes could have been kept lower with four smaller increases, “because there are customers out there that I think don’t have the money available.” But on the positive side, Christmann noted that the rate hikes average out to a little more than 3.5 percent per year. The agreement also relieves North Dakota customers of the costs of Xcel’s charitable contributions and economic development donations and much of their employee incentive bonuses. “Now, NSP’s investors will be responsible for these costs, and these changes alone are going to save the ratepayers over $2 million over these four years,” he said. If Xcel’s earnings exceed what is authorized in the agreement, the company must refund 50 percent of those earnings to customers. Two wind energy projects – Border Winds near Rolette and the Courtenay wind project in Stutsman County – also will receive advance determinations of prudence through the agreement, meaning Xcel will be able to seek recovery of costs associated with the projects from customers in the future. “This is sort of a new, innovative way to approach all of these issues,” Fedorchak said. “I think we’ve done so in a manner that helps us address some longstanding challenges that we’ve had to the company.”

Grand Forks Herald: Fedorchak launches bid to stay on Public Service Commission

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Public Service Commissioner Julie Fedorchak

Public Service Commissioner Julie Fedorchak announced Friday she will run for the job in 2014. And though she’s no stranger to the job, it won’t quite be a re-election campaign.

Gov. Jack Dalrymple appointed Fedorchak to fill the spot vacated by Kevin Cramer in December, after he won a seat in the U.S. House of Representatives. And although Cramer’s term didn’t expire until 2016, North Dakota law says appointed officials must face the voters in the next general election.

If elected next November, Fedorchak would stay on as one of three commissioners of a public agency that has surged in importance in the past decade. In addition to overseeing mining and utility companies, the Public Service Commission regulates in-state oil pipelines, grain elevators, telecommunications and auctioneers. Its budget has more than doubled in the past decade.

In an interview, Fedorchak said she’s happy to make her case before the voters as to why she deserves a full, six-year term. She will be in Bismarck and Fargo on Monday morning to start her campaign. No challengers have announced a bid for her seat.

She said her mix of political and business knowledge and policy acumen have made her a good fit for the commission in the past 10 months, and make her the right candidate for 2014. Having lived in nearly every corner of the state helps, too, she said.

“I think that gives me a really good understanding of our state and our people,” she said.

In a statement, Dalrymple called Fedorchak “a dedicated advocate for the people of North Dakota.”

“Commissioner Fedorchak is serving with distinction during this historic time of economic growth throughout the state,” Dalrymple said.

After graduating from the University of North Dakota, Fedorchak eventually entered politics in 1995 when she joined former North Dakota Gov. Ed Schafer’s staff as his primary spokeswoman. After Schafer retired in 2000, Fedorchak left politics and started her own marketing and communications business.

When Dalrymple picked her to take Cramer’s spot on the Public Service Commission, she was serving as Sen. John Hoeven’s state director.

Fedorchak said her 10 months on the commission have given her insight into what North Dakota needs to continue capitalizing on a growing economy while still ensuring North Dakotans have access to reliable and affordable utilities.

Among her priorities, she said, is to increase public awareness about the commission’s activities; improve the agency’s responsiveness by adding staff or streamlining when possible; and use the commission’s role as a utility regulator to try to reduce flaring in the Bakken region.

“This takes constant diligence,” Fedorchak said of her work. “There is lots of change in the industry. We have to really be focused on keeping an eye on what these changes are.”

 

Fargo Forum: Fedorchak launches bid to stay on Public Service Commission

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Public Service Commissioner Julie Fedorchak announced Friday she will run for the job in 2014.

She’s no stranger to the job, but it won’t quite be a re-election campaign.

Gov. Jack Dalrymple appointed Fedorchak to fill the spot vacated by Rep. Kevin Cramer in December, after he won a seat in the U.S. House of Representatives. Though Cramer’s term didn’t expire until 2016, North Dakota law says appointed officials must face the voters in the next general election.

If elected next November, Fedorchak would stay on as one of three commissioners of a public agency that has surged in importance in the past decade, largely due to increased oil production in North Dakota.

In addition to overseeing mining and utility companies, the Public Service Commission regulates in-state oil pipelines, grain elevators, telecommunications and auctioneers. Its budget has more than doubled in the past decade.

In an interview, Fedorchak said she’s happy to make her case before the voters as to why she deserves a full, six-year term. She will be in Bismarck and Fargo on Monday morning to start her campaign. No challengers have announced a bid for her seat.

She said her mix of political and business knowledge and policy acumen have made her a good fit for the commission in the past 10 months and make her the right candidate for 2014. Having lived in nearly every corner of the state helps, too, she said.

“I think that gives me a really good understanding of our state and our people,” she said.

In a statement, Dalrymple called Fedorchak “a dedicated advocate for the people of North Dakota.”

“Commissioner Fedorchak is serving with distinction during this historic time of economic growth throughout the state,” Dalrymple said.

After graduating from the University of North Dakota, Fedorchak eventually entered politics in 1995, when she joined former North Dakota Gov. Ed Schafer’s staff as his primary spokeswoman. After Schafer retired in 2000, Fedorchak left politics and started her own marketing and communications business.

When Dalrymple picked her to take Cramer’s spot on the Public Service Commission, she was serving as Sen. John Hoeven’s state director.

Fedorchak said her 10 months on the commission have given her insight to what North Dakota needs to continue capitalizing on a growing economy while still ensuring North Dakotans have access to reliable and affordable utilities.

Among her priorities, she said, is to increase public awareness about the commission’s activities; improve the agency’s responsiveness by adding staff or streamlining when possible; and use the commission’s role as a utility regulator to try to reduce flaring in the oil-producing Bakken region.

“This takes constant diligence,” Fedorchak said of her work. “There is lots of change in the industry. We have to really be focused on keeping an eye on what these changes are.”

 

KMOT-TV Minot: Fedorchak Announces Intent to Run

The general election is just a year away, and today the first candidate announced her intent to run. Julie Fedorchak says she is hoping to be officially elected to the Public Service Commission. She was appointed to the position by the governor nearly a year ago when Kevin Cramer left his seat on the commission to serve in the U.Skmot tv. House of Representatives.
“I know what this commitment is, I know what’s involved. I know what the impact will be on my family, because it’s a big commitment. And it’s a huge honor, as well. And I think it’s a really important priority, and my husband and I agree with that,” says Fedorchak.

She says her priorities include maintaining affordable electric services for North Dakotans and re-examining the states pipeline safety programs.

The six-year term she is hoping to complete expires in 2016.

View the entire story at: http://www.kmot.com/story/23871358/fedorchak-announces-intent-to-run.

Bismarck Tribune: Fedorchak announces plans to run for full term

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Samual Fedorckak, 8, helps his mom, Julie, with an impromtu sound check of the media’s microphones before she made her announcement on Monday in Bismarck to run for the rest of the term on her appointed seat on the Public Service Commission. Also helping are her husband, Mike and daughter Elizabeth, 12, and son Nathan, 10, not pictured. 11-4-2013

Public Service Commissioner Julie Fedorchak outlined her priorities in ensuring affordable energy and safe energy transmission Monday morning as she launched her first campaign for statewide office.

With her family at her side Fedorchak told supporters inside a packed North Dakota Republican Party headquarters of her appreciation for her appointment last year by the governor.

“Today I’m here to ask the public to affirm the governor’s choice,” Fedorchak said.

Fedorchak is running to complete the final two years of former commissioner Kevin Cramer’s term. Cramer left his seat last year after being elected to Congress.

By state law a person appointed to an elected state office must run for election in the next general election.

Along with maintaining affordable energy, Fedorchak outlined four additional campaign priorities Monday.

Her other priorities were to work on reducing flaring of natural gas, examine the state’s pipeline safety programs, improve public transparency in PSC activities and maintain the department’s efficiency.

Fedorchak said the PSC is beginning to look at whether or not the state should move toward having a say in the regulation of pipelines within the state.

“We really are serious about looking at that,” Fedorchak said.

The decision to re-evaluate the PSC’s role in regulating intra-state pipelines came after the September oil spill from a Tesoro Corp. pipeline near Tioga that spewed more than 20,600 barrels of crude.

Fedorchak said any decision to take on more regulatory authority would require more research into the issue and discussions with the governor. Approval from the federal Pipeline and Hazardous Materials Safety Administration also would be needed.

“Does it make sense for us … or not?” Fedorchak said.

With 20 years of experience in both the public and private sector, Fedorchak said she brings a unique perspective to the office.

Prior to her PSC appointment Fedorchak served as state director for Sen. John Hoeven, R-N.D., and before that as his deputy state director.

Fedorchak also spent 10 years as president of Liffrig Communications. One of the largest projects she was involved in was helping write the first two comprehensive energy plans as part of the Empower North Dakota initiative.

Earlier in her career she also served as communications director and senior policy adviser for former Republican Gov. Ed Schafer.

No other candidates from any political party have yet announced their intent to run for the PSC.

Two PSC seats will be on the November 2014 ballot. The seat held by PSC Chairman Brian Kalk also is up for election for a full six-year term