County's Motion to Strike Portions of Southwest's Reply Brief or to Set Aside Submission for Taking Additional Evidence (Motion)

On March 18, 2002, the County filed a motion to strike a portion of Southwest's reply brief based on "untested new evidence that Southwest has submitted as an attachment to its reply brief."⁷⁰ In the alternative, the County request that the Commission "set aside submission and reopen the record for the purpose of taking additional evidence relevant to the Commission's evaluation of the new evidence that Southwest has presented."⁷¹ The County argues that it is "fundamentally unfair, and a violation of the due process rights of other parties, for Southwest to be able to introduce new factual evidence in its reply brief . . ."⁷² The County charges that the evidence concerning futures prices for gas provided by Southwest is based only one date, April 27, which the County believes is not typical. Nevertheless, "the County emphasizes that it does not view the outcome of this analysis as a major issue in this case."⁷³ The County concludes its Motion with the specific request that the Commission strike Section I, on pages 31-34, and Appendix I to Southwest's reply brief or set aside submission to reopen the record to take evidence on futures prices on April 24, 25, 26, and 28. On April 2, ORA filed a response recommending the reopening of the record.

On March 29, 2002, Southwest filed a response to the Motion. Southwest supports the option of taking additional evidence, and states that it has no objection to accepting the new evidence offered by itself and the County. Southwest, however, notes that it does not take issue with the County's view that the outcome of this analysis is not a major issue in this proceeding. Finally, Southwest notes that:

"The County's objection to, and its Motion to Strike, Appendix 1 only applies to two sentences of Section III.I of Southwest's Reply Brief (pages 32-34): (1) On page 33, the last sentence of the second full paragraph (beginning "For illustrative purposes..." and (2) on page 34, the last sentence of the first full paragraph (beginning "If, for example, one examines..."). The remainder of Section III.I does not rely on Appendix 1 and is therefore not properly the subject of the County's Motion to Strike."⁷⁴

We grant the County's motion. First, we agree that introducing this evidence during the reply brief fails to provide the County and ORA an opportunity to either respond or test the reliability or validity of this evidence. Thus, it would be inherently unfair to accept this additional evidence without reopening the record. Second, we also agree that this information does not address any major issue in this proceeding. In particular, we found that although Southwest's decision to inject gas on any given day may make narrow economic sense, it was imprudent to let the injection season end without filling at least 50% of its contracted storage or securing futures contracts covering that amount of gas. The exact levels of the futures price in April of gas for delivery in December and January 2000-01 and the cost of gas procurement, injection, and storage on any given day is not central to our determination of the reasonableness of Southwest's managerial actions or to our determination of an appropriate disallowance. For this reason, we determine that it is both fair and efficient to strike the portions of Southwest's reply brief that introduce new evidence.