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Mike Nowatzki, Published January 27 2009

Clark blasts utilities

PSC commissioner criticizes lobbying on pipeline investigations

A North Dakota Public Service Commission member says it’s “an embarrassment” that utilities are lobbying against a Senate bill that could force them to pay the cost of pipeline investigations whether or not a violation is found.

Commissioner Tony Clark said utilities should be responsible for paying to find out if something went wrong with their systems when tragic incidents occur, such as the Sept. 2 house explosion in Fargo that left a woman severely burned.

“And yet the utility companies have the audacity to go down and actively work the Legislature to deny regulators the most basic tools needed to investigate serious safety issues,” he said. “Frankly, I think it’s an embarrassment.”

Bob Graveline, a lobbyist for the Utility Shareholders of North Dakota, which represents those who own stock in investor-owned utilities Xcel Energy, MDU Resources Group and Otter Tail Corp., called the bill “rather intrusive.”

“If there’s no violation, why should the utility company have to pay the cost of the test and ultimately affect shareholder equity?” he asked.

The Senate’s Natural Resources Committee shared that concern and gave the bill a do-not-pass recommendation on a 6-1 vote Friday, said Sen. Stan Lyson, R-Williston. The bill is expected to reach the full Senate later this week.

State law already allows the PSC to assess the costs of an investigation to a person found to be in violation of a statute or rule.

Senate Bill 2138 would add language allowing the PSC to assess the costs of an investigation “whether or not a violation is found.”

Any costs paid would be deposited into a special fund for the PSC to use to defray investigation costs.

Sen. David Hogue, R-Minot, an attorney, voted in favor of the bill.

“I come from the perspective of somebody who practices law in areas before the commission, and it is a common practice in certain heavily regulated industries that the regulated entity pays the cost of investigations,” he said. “That’s just part of doing business.”

But Graveline said the bill double-dips because utilities already pay fees to the U.S. Department of Transportation, some of which come back to the PSC to administer the pipeline safety program.

Alan Moch, the state’s pipeline safety inspector since 1988, said he doesn’t know how much utility fee money comes back to the PSC. But it’s “probably a very small portion” of the $34,056 in federal pipeline safety grant funds awarded to the PSC in 2008, he said.

The PSC doesn’t budget for investigations into incidents such as the Fargo house explosion or the natural gas leak in January 2008 that cut service to 5,200 customers in Mandan, Moch said. Those are the only two instances he can recall during his tenure that required outside professional testing services.

“When things like that occur, then the company should be responsible to pay it,” he said.

There isn’t a lot of money at stake in the bill, Lyson noted. The PSC is paying $5,310 for a California lab to test a section of natural gas pipe blamed in the Fargo house explosion. That testing could take place this week, Moch said.

How they voted

• Yes: Sen. David Hogue, R-Minot

• No: Sen. Stan Lyson, R-Williston; Sen. Layton Freborg, R-Underwood; Sen. Connie Triplett, D-Grand Forks; Sen. Mac Schneider, D-Grand Forks; Sen. Jim Pomeroy, D-Fargo; Sen. Bob Erbele, R-Lehr

Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528