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DECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RON LAW LOU ANN WESTERFIELD BILL EASTLAKE DON HOWELL RANDY LOBB DAVE SCHUNKE MICHAEL FUSS BEV BARKER TONYA CLARK GENE FADNESS WORKING FILE FROM: SCOTT WOODBURY DATE: JUNE 4, 2002 RE: CASE NO. PAC-E-01-16 (PacifiCorp) MONSANTO ELECTRIC SERVICE AGREEMENT PROPOSED SCHEDULING On December 10, 2001, PacifiCorp dba Utah Power & Light Company (PacifiCorp; Company) filed an Application with the Commission regarding supply of electric service to Monsanto Company (Monsanto). In its Application the Company requested that an interim rate be established. The Commission by Order No. 28918 denied the Company's request, suspended the Company's Application, established an intervention deadline and set a prehearing conference for January 29, 2002 to discuss scheduling. The Commission is apprised that the parties, PacifiCorp and Monsanto, are presently engaged in litigation in Federal District Court regarding the contract termination date of a 1995 Electric Service Agreement between the parties. On December 11, 2000, PacifiCorp sent notice of termination to Monsanto stating that December 31, 2001 would be the last day it would supply power under the Agreement. On February 14, 2001, Monsanto responded with a letter stating that the Notice of Termination was not effective under the terms of the Agreement. The 1995 Agreement provides, in relevant part, that the Agreement "shall continue in full force and effect through December 31, 2001, and thereafter shall be renewed annually until either party gives at least one year's written notice of termination." Monsanto claims that this provision of the Agreement bars PacifiCorp from giving the one-year notice of termination until after December 31, 2001. In its ruling on a Motion for Summary Judgment, the Federal District Court has determined that the contract provision at issue is ambiguous because it is "reasonably susceptible to conflicting interpretations." The Motion for Summary Judgment was denied, the Court determining that intent is a question for the trier of fact. Mediation has been proposed. Should the matter go to trial, a hearing date is not expected prior to mid 1993. Under either parties interpretation of the Agreement, there is no service agreement after December 31, 2002. Pursuant to agreement of the parties, the following scheduling in this case is proposed: May 29, 2002 Supplemental direct testimony prefile date PacifiCorp (already filed) September 4-6, 2002 Hearing, Boise, Idaho Monsanto, Staff/Intervenor file dates and rebuttal date have yet to be agreed upon. Staff notes that as part of the Company's original testimony in this case, a cost-of-service (COS) study by rate schedule over a 12-month period ending December 31, 1999, was submitted to support the Company's proposed rates for Monsanto. To the extent that the prior Notice in this case does not identify cost-of-service as an issue to be considered, Staff recommends that an Amended Notice of Application be issued and that an additional period for intervention be established. Commission Decision Does the Commission find the proposed scheduling to be acceptable? Does the Commission find it reasonable to issue an Amended Notice of Application for the purpose of identifying cost-of-service as being an issue in this docket? Does the Commission also find it reasonable to establish a further period for intervention? Scott Woodbury vld/M:PACE0116