Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF PUBLIC SERVICE REGULATION

OF THE STATE OF MONTANA

In the matter of the amendment of ARM 38.2.1203, 38.2.1205, 38.2.1209, 38.2.2403, and 38.2.4204, and the repeal of ARM 38.2.1204, 38.2.2103, 38.2.2402, 38.2.2404, 38.2.3906, and 38.2.4504, pertaining to Commission procedural rules

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NOTICE OF AMENDMENT AND REPEAL

TO: All Concerned Persons

1. On May 14, 2021, the Department of Public Service Regulation published MAR Notice No. 38-2-248 pertaining to the public hearing on the proposed amendment and repeal of the above-stated rules at page 545 of the 2021 Montana Administrative Register, Issue Number 9.

2. The department has amended the following rules as proposed: ARM 38.2.1203, 38.2.1205, and 38.2.1209.

3. The department has repealed the following rules as proposed: ARM 38.2.1204, 38.2.2103, 38.2.2402, 38.2.3906, and 38.2.4504.

4. The department has amended the following rule as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

38.2.4204 ~~PREPARED TESTIMONY~~ SUPPORTING EVIDENCE (1) Parties commencing an action should file prepared testimony or a fact sheet to establish the facts necessary for the commission to grant the requested relief. If no prepared testimony is filed with an initial pleading, the commission may set a deadline for any party commencing an action to file prepared testimony. The failure to timely file prepared testimony may result in the dismissal of the matter.

(2) In the discretion of the presiding officer, a witness's prepared testimony may:

(a) be read into the record on direct examination;

(b) be copied into the record without reading; or

(3) Prepared testimony or fact sheets must be signed and verified by ~~the~~ a competent witness. The verification must state that the prepared testimony or fact sheet is true and accurate to the witness's best knowledge, information, and belief ~~of the witness~~. A witness's signature may be electronic and does not need to be notarized.

5. The department has decided not to adopt the proposed amendment to ARM 38.2.2403 or the repeal of ARM 38.2.2404. The department will address those rules in a subsequent rulemaking.

6. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

COMMENT #1: Several commenters supported the commission's effort to move toward electronic filing and agreed that the commission's procedural rules should be modernized to accommodate electronic filing and noted several additional rules could benefit from updates.

RESPONSE: The commission appreciates the commenters' support, and agrees that future rulemaking should continue to revise and update the commission's procedural rules. At this time, only the above-noted rules have been noticed for amendment and repeal, and as such, it is beyond the scope of the current rulemaking to address other rules noted by the commenters.

COMMENT #2: Commenters observed that there is a continuing need for limited intervention in commission proceedings, even if the commission eliminates its special intervention rule.

RESPONSE: The concept of limited intervention is neither discussed in the commission's existing rules on general and special intervention, nor prohibited by the proposed, simplified intervention rule. Regardless, the commission has decided not to adopt the proposed revisions to its intervention rules. The commission will consider comments about intervention when developing future rulemaking on the subject.

COMMENT #3: Commenters expressed concern that an intervenor should not be allowed to substantially expand the scope of a docket. Instead, the party seeking relief should be allowed to set the scope of the proceeding.

RESPONSE: The commission appreciates the commenters' concern, and has decided not to adopt the proposed revisions to its intervention rules. The commission will consider comments about intervention when developing future rulemaking on the subject.

COMMENT #4: Commenters noted that intervenors may not be able to clearly state their position in contested case until they have reviewed an application, its supporting records, and prepared testimony of their own.

COMMENT #5: One commenter was concerned that the prosed intervention rule might go too far in allowing parties to contest or limit the scope of another party's intervention.

RESPONSE: The commission appreciates the commenter's concern, and has decided not to adopt the proposed revisions to its intervention rules. The commission will consider comments about intervention when developing future rulemaking on the subject.

COMMENT #6: Commenters said it was unclear why the commission would impose a verification requirement in ARM 38.2.4204 if no party objects to the submission of unverified, prepared testimony.

RESPONSE: As noted in the statement of reasonable necessity, the revisions to this rule were intended to make the filing of prepared testimony the norm in commission proceedings, and to ensure the quality and reliability of such prepared testimony. The purpose of these revisions is to ensure the commission has a reliable record for its decisions in every proceeding. Because many proceedings are resolved without an evidentiary hearing, parties do not always have an opportunity to formally object to the admission of an applicant's supporting documentation. The commission anticipates that the quality and reliability of supporting information will be improved by requiring such information to be verified by a competent witness.

COMMENT #7: Commenters said commission rules should not require prepared testimony with each application, as not all applications will be substantive or contested in a way that makes prepared testimony necessary or useful.

RESPONSE: The commission has revised its amendments to the rule based on commenters' feedback. The purpose of these revisions can be served by either prepared testimony or documents that recite the factual basis for an application. Accordingly, the rule has been revised to allow parties to file either prepared testimony or fact sheets with their applications. The rule has also been renamed for clarity. The rule continues to allow the commission to set a deadline for the filing of prepared testimony, if the commission determines that such testimony would be useful in any given proceeding. The commission has also updated the verification requirement to ensure fact sheets are equally as reliable as a witness's verified, prepared testimony.

COMMENT #8: One commenter noted that the proposed verification requirement for prepared testimony presented "an odd legal conundrum," because verifications are typically notarized. Without a notary, the commenter asserted that there would be limited value in the verification.

RESPONSE: While the commission agrees that verification is commonly performed with a notary, 1-6-105(1), MCA provides a process for verifying matters through a written, unsworn declaration. The commission therefore does not agree that the verification requirement will provide no value, or present a substantial burden for parties appearing before the commission.

COMMENT #9: One commenter noted that the prepared testimony rule, ARM 38.2.4204, and ARM 38.2.1202, which pertains to the minimum filing requirements for applications and petitions, should be harmonized.

RESPONSE: The commission appreciates the commenter's observation; however, ARM 38.2.1202 has not been noticed for amendment, and therefore cannot be amended at this time. The commission will consider amendments to that rule in a future rulemaking.

COMMENT #10: Commenters stated that prepared testimony is typically verified at the beginning of testimony at a hearing, when a witness formally sponsors and testifies to the truth and accuracy of the prepared testimony. Commenters noted that this process was valuable, and the commission's proposed requirement for verification of prepared testimony should not replace that in-hearing process.

RESPONSE: The commission does not believe the verification requirement replaces the routine practice of a witness adopting the witness's prepared testimony on direct examination, during a hearing. Even with a verification, prepared testimony remains an out-of-court statement that has not been subject to cross-examination. The verification therefore does not automatically require or result in the admission of prepared testimony at a hearing. Unless parties stipulate to the admission of prepared testimony into evidence, the routine practice of calling a witness and asking the witness to verify the prepared testimony will continue to be the norm in commission proceedings.

COMMENT #11: One commenter noted that the Montana Consumer Counsel still maintains physical copies of records, and for that reason, it is still valuable for parties to serve some physical copies.

RESPONSE: The commission appreciates the commenter's observation; however, the current rulemaking does not affect how the Montana Consumer Counsel receives service of documents in commission proceedings.

/s/ Luke Casey /s/ James Brown

Luke Casey James Brown

Rule Reviewer Chair, Public Service Commission

Department of Public Service Regulation

Certified to the Secretary of State on July 13, 2021.