BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
* * * * *
RE:
IN THE MATTER OF THE
APPLICATION OF PUBLIC SERVICE
COMPANY OF COLORADO FOR
APPROVAL OF ITS COST OF SERVICE
GAS (COSG) PROGRAM, INCLUDING
APPROVAL OF AN OMNIBUS COST OF
SERVICE GAS AGREEMENT AND OF
TARIFF CHANGES NECESSARY TO
ALLOW RECOVERY OF COSTS OF
THE COSG PROGRAM.
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PROCEEDING NO. 16A-______G
VERIFIED APPLICATION
Public Service Company of Colorado (“Public Service” or the “Company”), by and
through its undersigned counsel, and pursuant to COLO. CODE REGS. §§ 723-1-1303 and
723-4-4002(a)(XIV) of the Public Utilities Commission of the State of Colorado
(“Commission”), hereby respectfully requests that the Commission approve the
framework proposed in this Application for a Cost of Service Gas (“COSG”) Program
involving the acquisition of natural gas reserves for the Company’s Local Distribution
Company (“LDC”) business through a special purpose subsidiary (to be referred to as
“Gas Reserve Co.”). As described in detail in this Application and its Direct Testimony,
the Company proposes a framework that through a business arrangement with Wexpro
Development Company (“Wexpro Development”), an experienced exploration and
production company, the Company may acquire and develop natural gas reserves as a
long-term physical hedge to further diversify the Company’s gas purchases and to bring
greater price stability to the Company’s LDC Customers. The cost of the gas supplied
under the program would be based generally on a cost of service pricing formula, which
is why the Company is calling the program the “Cost of Service Gas Program.” This
program will contain defined criteria with respect to the acquisition and future
development of such gas reserve properties.
While the specific relief and approvals sought in this Application are described in
Section VI, they include inter alia 1) approval of proposed changes to the Company’s
Gas Cost Adjustment (“GCA”) tariff to include COSG Program gas and to incorporate
cost recovery mechanisms of the COSG Program; 2) approval of modifications to the
Gas Price Volatility Mitigation Plan (“GPVM”) to include COSG Program gas; and 3)
approval of the proposed property acquisition application framework and process,
discussed in detail in the attached Direct Testimony, for potential future property
acquisitions to be included in the COSG Program, which would allow for shortened
notice and an expedited Commission review and approval process following submittal of
a property acquisition application.
In support of this Application and to describe the proposed COSG Program and
the relief requested in more detail, the Company states:
I. OVERVIEW OF THE PROPOSED COSG PROGRAM
1.
Public Service is a Colorado corporation and is a public utility engaged,
inter alia, in the purchase, distribution, sale and transportation of natural gas in various
areas in the State of Colorado. Public Service provides natural gas service to more
than 1.3 million residential, commercial, and industrial customers in Colorado. Public
Service is a public utility as defined in Colo. Rev. Stat. § 40-1-103 and is subject to the
2
jurisdiction of this Commission. Public Service is a wholly-owned subsidiary of Xcel
Energy Inc.
2.
Public Service purchases natural gas supplies for subsequent sale to its
residential, commercial, industrial, and gas transportation customers. Over the past
decade the price of natural gas has changed. It has ranged on the NYMEX day ahead
from a low under $2.50 per MMBtu to a high of over $13.00 per MMBtu. Because the
fundamentals underlying the supply and demand balance in natural gas markets vary
significantly in the short and long term, there is significant price volatility in the gas
market, and this volatility affects the cost of gas for all utility customers. Customers of
Public Service’s LDC business have been subject to these price fluctuations as natural
gas costs have been recovered through the GCA.
3.
Natural Gas prices are today at the lower end of the historical price range
and customers are benefitting from these lower costs through the GCA.
However,
natural gas prices are not expected to remain at today’s prices. Market prices are near
a bottom due to supply exceeding demand, but in the long term prices are likely to
increase. Production of oil and associated natural gas has grown substantially over the
last several years leading to a supply surplus that has depressed oil and gas prices.
Production growth has started to slow down; however, producers have reduced drilling
activities given the decline in oil and gas prices. At the same time, demand is expected
to increase significantly over the next 2-3 years from several sectors including power
generation, liquefied natural gas (“LNG”) exports, transportation, and industrial
processes. Falling production and rising demand will put upward pressure on prices
over the long-term. While the Company’s current seasonal hedging strategy is intended
3
as a protection against short-term price volatility, it does not have the capacity to
provide protection from structural changes in the natural gas markets that can lead to
sustained price increases over the long-term. A long-term hedge through an investment
in gas reserves provides protection to customers’ exposure to the risk of increasing
prices.
4.
Thus, we are at a unique time in the oil and gas industry because of the
current low-price environment. This environment creates opportunities for utilities and
other large gas purchasers to acquire gas reserves at economical prices, which will
serve as a physical hedge against future increases in gas prices. In order to be able to
pursue potential opportunities to acquire gas reserves, Public Service proposes to enter
into a business arrangement with Wexpro Development, an experienced exploration
and production company that acquires, develops and operates natural gas and oil
properties in the Rocky Mountain region under a cost-of-service model.
5.
The cost of the gas supplied under the COSG Program would, with very
limited exceptions as explained in the Direct Testimony of Mr. Carter, be based on a
cost of service pricing formula. This COSG Program will contain defined criteria with
respect to the acquisition and future development of such properties. The program will
also suggest that the Commission consider the use of independent third parties – the
independent Hydrocarbon and Accounting monitors – to assist the Commission and its
staff in evaluating and monitoring the program in their discretion – whose costs would
be paid by Public Service and recovered through the COSG Program.
6.
The intent of the COSG Program is to provide more stable and predictable
long-term pricing for our LDC customers. To govern the business arrangements and to
4
implement the COSG Program, the Company has entered into an Omnibus Cost of
Service Agreement with Wexpro Development dated January 20, 2016 (the “Omnibus
Agreement”), which is contingent on receipt of Commission approvals for the COSG
Program framework and cost recovery mechanisms and other approvals requested in
this Application.
7.
If this Application is granted, Wexpro Development will attempt to identify
and to acquire through an arms’ length transaction, at its sole cost and risk, oil and gas
interests with a value up to $100,000,000 per acquisition that under the terms of the
Omnibus Agreement may reasonably satisfy the Company’s objectives.
If Wexpro
Development offers the Company an undivided 50% interest in the property, it will
provide the Company with drafts of transaction documents1 and due diligence
information.2 The Company will not be obligated to acquire an interest in a Wexpro
Asset offered to the Company.
However, if the Company wishes to pursue the
proposed transaction, it will submit a separate application to this Commission for
approval to include such property in the Company’s gas supply portfolio under the
COSG Program and to recover the costs based on the previously-approved cost-ofservice methodology. If the separate application is granted, through its wholly-owned
special purpose subsidiary, Gas Reserve Co., Public Service will acquire an undivided
50% of Wexpro Development’s interest in the property.
1
The transaction documents include a purchase and sale agreement for the acquisition of the 50%
interest, a joint development agreement, a gas purchase agreement, a joint operating agreement (if
Wexpro Development will be the operator), and a management services agreement.
2
The due diligence information includes detailed data and information for the Company’s evaluation of
the Wexpro Assets and the terms of the Wexpro Acquisition.
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II.
8.
PROPOSED EXPEDITED REVIEW OF FUTURE ACQUISITION
APPLICATIONS
The Company proposes an expedited review and approval process for
property acquisitions to be included in the COSG Program. In the gas market, sellers
are operating in deal negotiations and settlements in timeframes that are much faster
than those of our traditional regulatory filing timeframes. Sellers are not willing to delay
transactions because of the risk of market fluctuations, which can have significant
impact on property values.
In order to overcome these market realities, Wexpro
Development has agreed to acquire properties at its sole cost (and risk), prior to offering
an interest to the Company.
However, in order to assist Wexpro Development in
mitigating these risks the Omnibus Agreement calls for a sixty-day acquisition approval
process; hence the need for an expedited review and approval process. The Company
believes that expedited approval will be necessary due to risks associated with the
uncertainty of possible inclusion of specific properties in the COSG Program inherent in
a traditional regulatory review process. The Commission’s review should be facilitated
by the framework for documentation, data, reporting, and cost recovery as proposed in
this Application. These circumstances necessitate a modified and expedient approval
process.
9.
The Company will provide extensive information in exhibits to its future
property acquisition applications to make the expedited review process feasible. The
information to be provided will include monthly gas and oil prices, location of current and
future wells, historical production and remaining reserves of current wells, forecasted
reserves for future wells; production plot forecasts for current wells; estimated drilling
capital costs per well; estimated operating expenses for current and future wells;
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working and net revenue interest for current wells; estimated lease burdens and
production tax per Dth for current and future wells; estimated gathering and processing
cost assumptions; land, legal, and title documentation; forecasted cost-of-service
(annual and cumulative basis); gas supply portfolio information; geological data; a
development plan; and adjustments to purchase price used in opening investment base
(including transaction costs). The details regarding the information that will be provided
for future property acquisitions is included in the Direct Testimony of Mr. Carter, and a
sample form of exhibits to be included in an application for approval of a specific
property acquisition is included in Attachment TJC-4.
10.
The Company proposes that the Commission consider the use of an
independent third-party evaluator - the Hydrocarbon Monitor – who would have
expertise in evaluating these types of properties and associated contracts. The role of
the Hydrocarbon Monitor would be to provide to the Commission an evaluation of a
proposed property acquisition and the associated development plan and to perform any
subsequent monitoring roles requested by the Commission. The Company believes
that the use by the Commission of a proposed Hydrocarbon monitor will help expedite
the Commission’s review. The Company proposes to compensate the Hydrocarbon
Monitor and then to include those costs as part of the transaction costs associated with
the property acquisition. If a proposed acquisition is not approved, the compensation
costs will be deferred for inclusion in the next gas rate case filing.
11.
The Company also proposes that the Commission consider the use of
another independent third-party evaluator – the Accounting Monitor – who would have
expertise in the accounting associated with these types of properties. An Accounting
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Monitor would be an independent third-party that is a certified public accountant or a
firm of certified public accountants. The Accounting Monitor would be retained by the
Commission to assist the Commission and its staff in reviewing the costs included in the
COSG Program to ensure that the accounting treatment for the oil and gas interests in
the COSG Program is being properly done. (The Company will also have its own audit
rights under the Gas Processing Agreement to be executed with Wexpro Development
in connection with any Commission-approved transactions.) The Company proposes to
compensate the Accounting Monitor and then include those costs as part of the COGS
Program.
III. PROPOSED MODIFICATIONS TO THE GPVM PLAN
12.
As detailed in the Direct Testimony of Mr. Alex G. Trowbridge, the
Company seeks modification of its existing Gas Price Volatility Mitigation (“GPVM”) Plan
to allow the Company (through Gas Reserve Co.) to acquire, develop and deliver
physical gas reserves for Public Service’s customer use (or for market sale with net
proceeds credited to the GCA) and to purchase Wexpro Development’s share of gas
production as an additional instrument to hedge and mitigate long-term price volatility
for customers.
13.
As described in the Direct Testimony of Company witness Mr. Trowbridge,
if the Commission approves the framework and cost recovery for the COSG Program
proposed in this proceeding, the Company will make a compliance filing to update the
GPVM Plan to include gas reserve investments as an available hedge instrument.
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IV. PROPOSED COST RECOVERY
14.
Because the costs of gas commodity and hedging activities are recovered
through our GCA Tariff, the Company proposes to recover the costs of the gas acquired
under the COSG Program through the GCA. This will allow customers to benefit in a
timely manner from the depletion typical to gas reserve production which is anticipated
to decrease the net investment significantly in the earliest yeas of production.
15.
The Company proposes to add an exhibit to the GCA to forecast the
impact of gas reserves on the upcoming gas year. The exhibit would present the (i)
forecasted Cost of Gas Reserves (“COGR”), (ii) forecasted gas sales for gas produced
under the COSG Program and sold rather than being delivered to the Company’s
system, and (iii) forecasted Gas Reserves Hedge Impact (“GRHI”) which would be a
credit or debit for the difference between COGR and sales revenue for gas produced
under the COSG Program and sold rather than being delivered to the Company’s
system. The annual forecasted COGR would also be the basis for the COSG Program
budget in the GPVM filed in January of the following year. Mr. Trowbridge’s Attachment
AGT-2 shows the proposed modifications to the Company’s GCA tariff sheet.
16.
The purpose of the COGR is to recover the costs for the interests in gas
reserves owned by the Company under the COSG Program (as reflected in the Gas
Reserve Co. cost of gas) and the cost of the gas purchased by the Company from
Wexpro Development’s interests in the same gas reserves. The COGR will include a
return on gas reserve investments, including transaction costs, and any regulatory
deferrals; depletion expense; operating expense; midstream costs; costs for nonqualified wells (as defined in the Omnibus Agreement); ad valorem and severance
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taxes; royalties and other lease burdens; general and administrative costs and
overhead burdens, and offsetting benefits from the sale of oil and natural gas liquids.
17.
The Company requests approval in this proceeding to purchase gas from
Gas Reserve Co. at a cost that includes a return on gas reserve investments and
related deferrals to be based on the effective rate of return as approved in PSCo’s most
recent Phase I gas rate case.
18.
The COGR for natural gas purchases from Wexpro Development will be
based on the cost provisions in the Omnibus Agreement. The Omnibus Agreement
contemplates the same general cost of service as calculated and charged by Gas
Reserve Co. (including depletion and Rate of Return, which will be adjusted for Wexpro
Development’s marginal composite income tax rate) with certain differences applicable
to tax rates, incentives and customer cost/risk sharing.
These differences are
discussed in the Direct Testimonies of Mr. Carter and Mr. Trowbridge.
V. COMPANY INVESTMENT THROUGH A SUBSIDIARY
19.
The COSG Program involves the ownership of oil and gas interests in gas
reserves. Public Service is not in the oil and gas business. Public Service proposes to
acquire its oil and gas interests through Gas Reserves Co., a wholly-owned, special
purpose subsidiary of Public Service Company of Colorado.
20.
Gas Reserve Co. will not issue debt at this time and therefore will not be a
credit rated entity. Rather, it will finance its investment in oil and gas interests under the
COSG Program with capital received from Public Service under the forms of equity
infusions and intercompany loans. In accordance with the variation of the rate base
(Investment Base) associated with the acquisition of oil and gas interests, Gas Reserve
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Co. will maintain a capital structure reflecting Public Service’s capital structure through
equity infusions from and dividend payments to Public Service, as well as repayments
and increases of its debt with Public Service. As a consequence, Gas Reserve Co. and
Public Service will have a capital structure with approximately identical leverage. In
addition, the cost of equity and cost of debt at Gas Reserve Co. will reflect the
corresponding cost of equity and cost of debt at Public Service.
As a result, the
revenue requirements associated with the investment in oil and gas interests owned by
Gas Reserve Co. will be calculated as if the oil and gas interests were owned directly by
Public Service.
21.
Public Service will purchase Gas Reserve Co.’s share of the gas produced
under the COSG Program at a cost-of-service price, as explained above and in more
detail in the Direct Testimony of Mr. Trowbridge.
22.
Commission Rule 723-4-4502(3) provides in pertinent part that:
For cost assignment and allocation purposes, the value of all transactions
from a non-regulated activity to the utility …, the value of the transaction shall be
the lower of the fully distributed cost or the market price …. Fully distributed cost
in this circumstance, shall be the cost that would be incurred by the utility to
provide the service internally. Market price shall be either the price charged by
the supplying non-regulated activity or if that condition is not met, the lowest price
charged by other persons in the market for a comparable product or service,
when such prices are publicly available.
23.
The Company believes that the Commission’s cost-allocation rules for
affiliate sales do not apply to the sale of gas by Gas Reserve Co. to the Company,
because Gas Reserve Co.’s only activity will be the ownership of interests in gas
reserves and the sale of its share of gas production to the Company at cost of service
pricing. However, even if the cost-allocation rules would apply, because Gas Reserve
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Co.’s gas sales price will be the same as the costs that would be incurred if the
Company invested directly in the COSG Program rather than through an affiliate, the
Company believes that cost of the gas purchased from Gas Reserve Co. will comply
with the cost-allocation rules. Under the proposed COSG Program, the price charged
by Gas Reserve Co. (defined in the affiliate sale rule as the “market price”) will be the
same as the cost that would be incurred by Public Service as if it invested directly in the
COSG Program, rather than through an affiliate (i.e., it will be the same as the fully
distributed cost). Therefore, the Company believes that any investment in the COSG
Program through Gas Reserve Co. and any purchases of gas by the Company from
Gas Reserve Co. will satisfy the “lower of the fully distributed cost or market price”
standard of the above-quoted Commission affiliate sales rules.
24.
In the alternative, the Company requests that the Commission grant a full
waiver of Rule 723-4-4502 of its affiliate sales rules to permit the contemplated
transactions between Gas Reserve Co. and Public Service as proposed in the Direct
Testimony of Ms. Alice K. Jackson.
25.
The viability of the proposed COSG Program depends upon having
certainty, in advance, regarding the cost recovery mechanisms that will apply to any
Commission-approved acquisition of an interest in gas reserves by the Company
(through Gas Reserve Co.).
That is why the Company is seeking approval in this
proceeding for its proposed cost recovery mechanism for the cost of gas purchased by
the Company from both Gas Reserve Co. and Wexpro Development. In addition to
seeking approval in this proceeding for the cost recovery mechanism, the Commission
will also have the opportunity to review and approve any proposed acquisition of
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properties under the COSG Program. Therefore, out of an abundance of caution, the
Company is requesting that the Commission’s order in this proceeding either find that
the proposed cost recovery mechanism satisfies the Commission’s affiliate sales rules
or grant a full waiver of the affiliate sales rules as to sales of gas made by Gas Reserve
Co. to the Company.
VI. REQUESTED APPROVALS
26.
To effectuate the proposed COSG Program the Company respectfully
requests that the Commission:
A.
Authorize the Company to enter into the Omnibus Cost-of-Service Agreement
with Wexpro Development that is described in the Direct Testimony of Mr.
Carter and attached as Exhibit TJC-1 to his Direct Testimony.
B.
Approve the proposed property acquisition application framework and
process as outlined by Ms. Jackson and discussed in more detail by Mr.
Carter, for potential future property acquisitions to be included in the COSG
Program, which will:
1.
Allow for a shortened notice period of 10 days and a 60 day expedited
Commission review and approval process following submittal of an
acquisition application which shall include specific criteria which are
described in Mr. Carter’s Direct Testimony; and,
2.
Allow for a Commission review and approval process for the COSG
Program development plan associated with the specific property under
consideration.
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C
Consider the retention and utilization of an independent Hydrocarbon Monitor
by the Commission to assist the Commission with the evaluation of potential
COSG Program property acquisitions and drilling plans, with costs of these
services to be paid by the Company and included in COSG Program
transaction costs.
D.
Consider the retention and utilization of an independent Accounting Monitor
by the Commission to review the accounting for the COSG Program on behalf
of the Commission to ensure that the accounting treatment for the oil and gas
interests in the COSG Program is being correctly done, with costs of these
services to be paid by the Company and included in COSG Program
transaction costs.
E.
Approve the use of a Discount Rate, Inflation Rate and Four Source Blend
Forecast in connection with the evaluation of a proposed property interest.
F.
Approve the Cost of Gas Reserves (“COGR”) and the Gas Reserve Hedge
Impact (“GRHI”) cost recovery methodology including the proposed rate of
return.
G.
Approve the proposed tariff changes to the Company’s GCA to incorporate
the cost recovery mechanisms of the COSG Program including the COGR
and GRHI.
H.
Approve the modifications of the Company’s GCA and Gas Price Volatility
Mitigation Plan (“GPVM”) to include COSG Program gas.
I.
Approve purchases by the Company of Gas Reserve Co.’s share of gas
production under the COSG Program at the cost-of-service pricing under the
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COSG Program and, in connection therewith, find that the proposed sale of
gas by Gas Reserve Co. to Public Service is as proposed consistent with the
Commission’s affiliate transaction rules. Alternatively, we request that the
Commission grant a full waiver of the affiliate sales rules (Rule 723-4-4502)
as to the Company’s purchase of Gas Reserve Co.’s share of gas production
under the COSG Program.
J.
Approve that using the COSG Program as a method of securing up to 50% of
the annual natural gas requirements for the LDC customers results in
prudently incurred costs that are eligible for recovery through the Company’s
GCA as discussed in detail in the Direct Testimony of Mr. Trowbridge.
K.
Approve an adjustment to both the common equity and the long-term debt
structure in the capital structure for the investment in Gas Reserve Co. in the
same proportion as the capital structure approved in the Company’s last gas
rate case.
VII. SUPPORTING TESTIMONY
27.
The following witnesses will be providing supporting testimony:
A.
Alice K. Jackson, Regional Vice President, Rates and Regulatory
Affairs of Xcel Energy Services Inc., is the Company’s policy witness and will generally
describe the purpose and need for the COSG Program as a long-term physical hedge
that will further diversify our gas purchases and bring greater price stability to Public
Service’s local distribution company (“LDC”) customers. She will summarize how the
COSG Program fits within the Company’s GPVM Plan and our Gas Purchase Plan
(“GPP”), and she will outline how the COSG Program can be implemented with modest
15
changes to the GPVM Plan and the GCA tariffs. Ms. Jackson will also introduce the
proposed recovery mechanisms of the COGR and the GRHI (applicable to natural gas
purchased through the COSG Program and sold at market prices rather than being
delivered to the Company’s system) as new definitions and calculations associated with
the GCA. She will describe how the Company is proposing to acquire actual properties
though a special purpose subsidiary, and address associated affiliate transactions
issues. Finally, Ms. Jackson will describe the framework and process the Company
requests that the Commission approve in this proceeding for use when the Company
seeks future approvals to acquire specific gas reserve investments under the COSG
Program.
B.
Michael L. Boughner, Director of Gas Supply of XES, will provide
an overview of Public Service’s current approach to gas procurement and the hedging
activities performed to mitigate price volatility on behalf of our retail natural gas
customers.
He will discuss the state of the natural gas markets and why a more
diversified natural gas portfolio will provide more stable gas prices over the long term.
He will address alternatives for hedging long-term gas supply costs and why the
Company believes the COSG Program is the preferred approach.
Finally, he will
discuss the volume of gas for Public Service’s Local Distribution Company gas business
that could be acquired through the COSG Program.
C.
Timothy J. Carter, Senior Director of Risk Strategy and Control of
XES, will explain the Company’s overall business relationship with Wexpro
Development, which is a key element to our proposed COSG Program. He will describe
a) the Company’s proposed COSG Program to acquire natural gas reserves as a
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source of supply for our LDC gas customers, b) the Company’s Omnibus Cost-ofService Agreement with Wexpro Development, dated January 20, 2016, c) the
information and documentation that the Company will provide in connection with a
future proposed acquisition of gas reserves for the COSG Program, d) the proposal for
an independent Hydrocarbon Monitor to assist the Commission in the evaluation of a
proposed acquisition, e) the proposal for an independent Accounting Monitor to ensure
that the accounting treatment for the oil and gas interests in the COSG Program is
being properly done, and f) the future development and well designation thresholds and
process for properties in the COSG Program.
D.
Alex G. Trowbridge, Principal Pricing Consultant in the Pricing and
Planning Department of Public Service, will explain and support the Company’s
Application for approval of the framework for the COSG Program by describing and
addressing various regulatory and accounting issues associated with gas reserve
transactions. He will first describe proposed changes to the GPVM Plan and the GCA
tariff. He will next describe the changes to the GCA tariff to enable the Company to
recover the cost of gas reserve transactions through the GCA. Finally, he will describe
the proposed mechanics for calculating and allocating the COGR (for gas delivered to
and purchased by the Company from properties included in the COSG Program) and/or
the GRHI (for gas developed and sold at market from properties included in the COSG
Program) to customers. In describing the proposed mechanics of these transactions,
he will discuss gas reserve costs and the proposed rate of return. Additionally, he will
discuss the need for regulatory deferral of certain costs that may occur as a result of
17
differences between Generally Accepted Accounting Principles (“GAAP”) and the
recovery methods proposed in this proceeding.
E.
Brady B. Rasmussen, Executive Vice President and Chief
Operating Officer of both Wexpro Development and Wexpro Company, will provide a
general overview of the gas exploration and production industry, describe Wexpro
Company’s
experience
with
exploration
and
production
and
cost-of-service
arrangements, describe the criteria they consider when acquiring a property, describe
the kind of information they provide to other state commissions, explain Wexpro
Company’s drilling experience and historical performance, provide information about the
accuracy of Wexpro Company’s reporting on reserves, discuss environmental risks and
how Wexpro Company minimizes those risks, and describe the sharing mechanism in
the Omnibus Agreement.
VIII. INFORMATION REQUIRED BY RULE 723-4-4002(b)
(a)
Name and Address of Applicant. The Applicant is Public Service. Public
Service’s principle place of business is at 1800 Larimer St. Suite 1400, Denver,
Colorado 80202.
(b)
Name under which service will be provided. The Applicant will continue to
provide service under the name “Public Service Company of Colorado.”
(c)
should
be
Names and addresses for inquiries.
made
to
the
undersigned
All inquiries for this Application
counsel,
and
all
notices,
pleadings,
correspondence, and other documents regarding this Application should be served
upon counsel, as well as the following persons:
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Alice K. Jackson
Regional Vice President, Rates and Regulatory Affairs
Xcel Energy Services Inc.
1800 Larimer Street, Suite 1400
Denver, CO 80202
Phone: 303.571.2703
Facsimile: 303.294.2329
E-mail: [email protected]
and
Robert J. Osborn
Regulatory Affairs
Xcel Energy Services Inc.
1800 Larimer Street, Suite 1400
Denver, CO 80202
Phone: 303.294.2873
Facsimile: 303.294.2329
E-mail: [email protected]
and
Meghann C. Corrigan
Case Specialist
Xcel Energy Services Inc.
1800 Larimer Street, Suite 1400
Denver, CO 80202
Phone: 303.294.2718
Facsimile: 303.294.2329E-mail:
[email protected]
(d)
Agreement to abide by specified rules.
Public Service has read, and
agrees to abide by, COLO. CODE REGS. §§ 723-4-4002(b)(VI) through (b)(VI).
(e)
Applicant’s existing operations and general service areas. Public Service
is a Colorado corporation and is an operating public utility engaged, inter alia, in the
purchase, distribution, sale and transportation of natural gas in various areas in the
State of Colorado. Public Service provides natural gas service to more than 1.3 million
residential, commercial, and industrial customers in Colorado.
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Public Service is a “Public Utility” as defined under the Colorado Public Utilities
Law, Colo. Rev. Stat. § 40-1-103 (2015), and is therefore subject to the jurisdiction of
the Commission with respect to the natural gas utility services it provides in Colorado.
Public Service’s effective tariffs, including rates, terms and conditions of service, and
regulations, are on file with the Commission.
Public Service is a wholly-owned
subsidiary of Xcel Energy Inc.
(f)
Location of Hearing.
The Applicant believes that this Application can be
decided without the need for an evidentiary hearing. If the Commission does, however,
set this Application for hearing, the Applicant prefers that the hearing be held at the
Commission’s offices in Denver, Colorado.
(g)
Acknowledgments. Public Service has read, and agrees to abide by,
COLO. CODE REGS. §§ 723-4-4002(b)(XI)(A) through (C).
(h)
Statement Under Penalty of Perjury.
The statement to be made under
penalty of perjury, required by COLO. CODE REGS. § 723-4-4002(b)(XII), appears at the
end of this Joint Application.
(i)
Miscellaneous Docket Information Required by Rule 723-4-4002(c).
Pursuant to COLO. CODE REGS. § 723-4-4002(c) of the Commission’s Rules Regulating
Gas Utilities and Pipeline Operators, Public Service hereby incorporates by reference
the following information, which is on file with the Commission in Docket No. 06M525EG:
20
a.
A copy of Public Service’s Amended Articles of Incorporation, which
was last filed on October 3, 2006;
b.
The name, business address and title of each of Public Service’s
officers and directors, which was last filed on March 26, 2015;
c.
The names and addresses of affiliated companies that conduct
business with Public Service, which was last filed on March 26, 2015; and
d.
The name and address of Public Service’s agent for service of
process, which was last filed on October 3, 2006.
e.
A copy of Public Service's most recent audited balance sheet,
income statement, and statement of retained earnings was last filed on March
26, 2015.
IX. VERIFICATION
Attached is Verification signed by a representative of Public Service, authorized
to act on behalf of Public Service, affirming that the contents of this Application and the
supporting documents are true, accurate and correct.
X. CONCLUSION
WHEREFORE, Applicant respectfully requests that the Commission enter an
Order granting the authority and approvals requested in this Verified Application, as
described in detail in Section VI of this Application.
21
Dated this 26th day of January, 2016.
Respectfully submitted,
PUBLIC SERVICE COMPANY OF COLORADO
By: /s/ William M. Dudley
William M. Dudley, #26735
Assistant General Counsel – Lead
Steven H. Denman, #7857
Assistant General Counsel
Xcel Energy Services Inc.
1800 Larimer Street, Suite 1100
Denver, Colorado 80202
Phone: (303) 294-2842 (Mr. Dudley)
(303) 294-2225 (Mr. Denman)
Email: [email protected]
[email protected]
ATTORNEYS FOR PUBLIC SERVICE COMPANY
OF COLORADO
22
BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF COLORADO
* * * * *
RE:
IN THE MATTER OF THE
APPLICATION OF PUBLIC SERVICE
COMPANY OF COLORADO FOR
APPROVAL OF ITS COST OF SERVICE
GAS (COSG) PROGRAM, INCLUDING
APPROVAL OF AN OMNIBUS COST OF
SERVICE GAS AGREEMENT AND OF
TARIFF CHANGES NECESSARY TO
ALLOW RECOVERY OF COSTS OF
THE COSG PROGRAM.
)
)
)
)
)
)
)
)
)
)
PROCEEDING NO. 16A-
G
VERIFICATION
STATE OF COLORADO
)
CITY AND COUNTY OF DENVER )
SS:
I, Alice K. Jackson, being duly sworn, do hereby depose and state that I am the Regional
Vice President, Rates and Regulatory Affairs, Xcel Energy Services Inc., agent for Public
Service Company of Colorado, Applicant in the foregoing Application; that I am an authorized
agent for Public Service Company of Colorado; that I have read the foregoing Application; and
that the facts set forth therein are true and correct to the best of my knowledge, information, and
belief.
~ ~
Alice K. Jackson
Regional Vice President, Rates and Regulatory Affairs
1800 Larimer Street, Suite 1400
Denver, Colorado 80202
Subscribed and sworn to before me this ~G~ay of January, 2016.
My Commission expires:
SCHUNA 0 WRIGHT
NOTARY PUBLIC
STATE OF COLORADO
NOTARY 10119974007693
· 'AISSION EXPIRES MAY 06, 2017
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