Chairman James Danly Statement
December 23, 2020
Docket No. ER21-215-000
This proceeding involves Resource Integration Agreements (RIA) between Deseret Generation & Transmission Co-operative, Inc. (Deseret) and Garkane Power Association, Inc. (Garkane) and between Deseret and Moon Lake Electric Association, Inc. (Moon Lake). Section III(c) of Exhibit B to the RIAs provides that Exhibit B will be updated annually to reflect approved costs for member-owned resources and the resulting reimbursements. Importantly, for purposes of my partial dissent, section III(c) of Exhibit B also provides that the revisions filed by Deseret are to take effect on January 1 of each year.
For reasons not fully explained, since 2017 Deseret has consistently requested that the revisions take effect on July 1 of the year instead of the January 1 date provided for in the RIAs. Deseret did so again in its filing in this docket, which it made on October 27, 2020. The only explanation provided by Deseret is that its filing cannot be made until Garkane and Moon Lake file their audited financials and Deseret’s Board of Trustees reviews the calculations made by Deseret’s staff based on the audited financial statements.[1] I fully accept the truth of Deseret’s declaration. However, it does not explain why, in a filing made on October 27, Deseret could not make the revised costs effective on January 1, as required by the RIAs, but instead must make the revisions effective July 1.
The Commission’s order today accepts the revised costs filed by Deseret, and I agree with that part of our order. However, our order also accepts Deseret’s request that the revisions be made effective July 1, 2020, instead of January 1, 2020, as required by the RIAs. The order does not find good cause for this request but instead merely cites to section 35.11 of the Commission’s regulations.
However, section 35.11 of the Commission’s regulations addresses waiver of the 60-day prior notice requirement of FPA section 205 and is irrelevant here. Nor am I aware of any precedent that would allow us to waive the contractual effective date under the circumstances presented here.
I recognize that Commission staff issued delegated letter orders approving the July 1 effective dates the past three years when Deseret made similar requests. But our failure to enforce the filed rate in the past does not justify or authorize our continued failure to enforce the filed rate in the future. If Deseret, Garkane, and Moon Lake agree that there are good reasons to make the rate revisions contemplated by the RIAs effective on July 1 instead of January 1, they are free to amend their contracts accordingly and file them with the Commission. But unless and until they do so, we are obligated by FPA section 205 to enforce the effective date on file with the Commission, which in this case is January 1, 2020.
For these reasons, I respectfully dissent in part.
[1] See Transmittal Letter at 2.