PSC holds hearing on Havre pipeline farm-tap proposal

The Public Service Commission held a public hearing Wednesday in Havre City Hall to review Havre Pipeline Co.'s request to impose regulations on its customer-service obligations on farm tap natural gas lines.

Farm tap customers are served off the company system, and usually obtained their service in exchange for granting a right of way to the company.

In 2016, after receiving complaints that diminishing pressure and associated water was causing customers to lose service, the PSC ruled that farm-tap service was a utility service under law and that Havre Pipeline could not unilaterally abandon service.

Havre Pipeline appealed this decision and took the matter to District Court, in 2017 Judge Yvonne Laird upheld the PSC's ruling and dismissed the case.

The meeting in Havre Wednesday was to discuss an agreement reached between Havre Pipeline and Montana Consumer Council, which represents Montana's utility and transportation consuming public in hearings before the Public Service Commission, state and federal courts, and administrative agencies about regulating farm tap service.

During the hearing, the definitions of abandonment and functional abandonment were discussed extensively, including how low the pressure would have to drop before a line is considered functionally abandoned.

NorthWestern Energy Corporate Counsel Sarah Norcott said the meeting was not about abandonment, which would have to be held in a separate hearing if Havre Pipeline was to pursue abandoning any customers. NorthWestern Energy is the parent company of Havre Pipeline.

Vice Chairman of the PSC Travis Kavulla said the term abandonment was important to define for the hearing, due to the nature of the terms and conditions dealing with issues of abandonment.

Norcott called on NorthWestern Energy's Director of Gas, Transmissions and Storage Marc Mullowney as a witness to testify for Havre Pipeline.

Mullowney said a variety of conditions could cause customers to lose gas pressure, causing an unreliable heat source.

Pressure lower than 5 PSI becomes a concern because that is where the regulators, that provide service to the customer, may not function properly, he said. Low pressure could cause a regulator to fail to close if a problem occurred.

"If a customer's appliance downstream was to fail, for instance the pilot light goes out, and there is no safety valve downstream," Mullowney said.

He said that this could be interpreted as some form of abandonment, although Havre Pipeline has customers with lower than than 5 PSI with wide-open regulators that are not abandoned.

"We have done everything that we can to make the existing source of fuel as safe as we possibly can on our side, on our facilities," Mullowney said. "On the customers' side, we don't have a say on what they do."

Kavulla added that Havre Pipeline will need to further examine the issue of low PSI levels for safety reasons and resolve it in the future. He added that to the proposal.

Norcott said in her opening statement that Havre Pipeline and the Montana Consumer Council have been able to resolve all contested issues in the docket. She added that what was presented to the PSC were proposed rules, special terms and conditions that both parties had agreed upon, and Havre Pipeline is not wrongly imposing limitations on farm-tap customers.

Mullowney also said what is filed with the commission resolves all of the contested issues on the docket and was reasonable and in the best interest to the customers.

He added that the company has done everything in its power to make the correct fuel system as safe as possible, although it has done nothing to replace this source of heat with a safer option.

The docket that was in discussion during the hearing, Norcott said, was a compliance docket, not a complaint docket, a rates docket or an abandonment docket.

She added that the groups had filed this set of terms and agreements last August.

"That filing simply reflects limitations of service, if you can call them that, that have existed for Havre Pipeline customers, farm-tap customers for close to 40 years in some cases, more than 40 years in some cases," she said.

She said that what Havre Pipeline has proposed should not be a surprise to any customer nor is it unreasonable.

The rules set in place say that Havre Pipeline can go on a customer's property so employees can properly work on the pipeline, interrupt service if needed and hold business hours that are reasonable to accommodate for the safety of the employees out in the field.

She added that weather conditions, for the safety of the pipeline's employees, hours may be altered although if there is an immediate threat employees will respond immediately.

Montana Consumer Counsel Attorney Jason Brown said in his closing statement that both parties believe that the stipulation is in the public interest, adding that it is a reasonable compromise.

Norcott said Havre Pipeline will not abandon service without the commission's approval, adding again that abandonment was not on the docket for Wednesday's meeting.

PSC staff attorney Jeremiah Langston said the parties had agreed that briefs needed to be filed for the docket discussed. The only remaining matter is the file exhibit identified earlier in the meeting of shut-in or closed-off wells that have been closed off for economic reasons such as low price points, he said, adding that this will be done Sept. 12 to increase the volume of the pipeline system.

The public can comment on the issues at the meeting by going online yto http://psc.mt.gov/Documents-Proceedings/Comment-On-A-Proceeding or visiting the PSC website at http://www.psc.mt.gov and choosing "documents and proceedings" then "comment on a proceeding."

The commission typically proceeds to final votes after hearings such as Wednesday's within two to six weeks, PSC spokesman Bowen Greenwood said this morning.