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1 (The following proceedings were
2 had in open hearing.)
3 Q. BY MR. ERIKSSON: Mr. Brattebo,
4 subsequent to the preparation of your rebuttal
5 testimony, did the Company receive a letter from BPA
6 regarding the exchange -- eligibility for the
7 exchange program?
8 A. Yes, we did.
9 Q. I'd refer you to what's been marked as
10 Exhibit No. 2 and ask you to describe what that is.
11 A. Exhibit No. 2 contains primarily two
12 items: A letter from PacifiCorp describing the
13 proposed merger and asking Bonneville whether or not
14 the proposed merger would affect PacifiCorp's
15 eligibility for the residential exchange program;
16 and the responding letter from BPA is also included
17 in which Bonneville Power Administration concluded
18 that the pending merger would not be affected by --
19 or would not affect PacifiCorp's eligibility to
20 participate in the residential exchange program or
21 PacifiCorp's ability to negotiate a settlement of
22 its rights under the residential exchange program.
23 Q. Thank you.
24 MR. ERIKSSON: Mr. Chairman, I'd offer
25 Exhibit No. 2 and move for its admission.
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HEDRICK COURT REPORTING BRATTEBO (Di)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 COMMISSIONER HANSEN: Okay. We'll
2 identify Exhibit No. 2 on the record if there is no
3 objection, be so ordered.
4 (PacifiCorp Exhibit No. 2 was
5 marked for identification.)
6 MR. ERIKSSON: And Mr. Brattebo is
7 available for cross.
8 COMMISSIONER HANSEN: Okay. We will
9 begin with Solutia.
10 MR. BUDGE: No questions,
11 Mr. Chairman.
12 COMMISSIONER HANSEN: Okay. We'll
13 move to Mr. Nye.
14 MR. NYE: Thank you, Mr. Chairman.
15
16 CROSS-EXAMINATION
17
18 BY MR. NYE:
19 Q. We can expect a new calculation of the
20 BPA credit in 2001. Correct?
21 A. That is correct.
22 Q. That's after the current settlement
23 expires?
24 A. That's correct.
25 Q. A reduction in the average system cost
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 can be possible because of various efficiencies that
2 ScottishPower might employ. Is that right?
3 A. Not exactly. A change in the average
4 system cost would only occur as a result of either a
5 rate case initiated by PacifiCorp, one of the
6 commissions, or by the administrator in some
7 particular reason she chose to change the average
8 system cost methodology.
9 Q. Under the traditional way of doing
10 things, the BPA credit will go down by the same
11 magnitude as a reduction in the average system cost.
12 Is that correct? In other words, a one mill per
13 kilowatt hour reduction in the average system cost
14 will lead to a one mill reduction in the BPA credit?
15 A. That is true.
16 Q. If the average system cost went down
17 one mill per kilowatt hour and the credit went down
18 a corresponding one mill, under what conditions
19 would the customers be held harmless?
20 A. Well, generally a reduction in the
21 average system cost would -- one could conclude or
22 speculate that there was actually a reduction in
23 PacifiCorp's rates. So if you assume that the
24 corresponding reduction in benefits was offset by an
25 identical corresponding reduction in rates, then I
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 suppose one could conclude that there -- the
2 customers were held harmless.
3 Q. So do you agree that under the
4 condition where one mill per kilowatt hour reduction
5 in average system costs had been passed back to the
6 customer already, a rate decrease would have taken
7 place?
8 A. I would assume that would be the case.
9 Q. During the span of this case,
10 ScottishPower has expressed no plans to file any
11 rate decrease to reflect its expected cost savings,
12 to your knowledge, has it?
13 A. I think previous witnesses have spoken
14 to that, and I assume that's the case.
15 Q. Isn't it true that without a rate
16 decrease, any cost savings that will result in a
17 reduction in the average system cost will translate
18 into an increase in the bills paid by the
19 residential and irrigation customers?
20 MR. ERIKSSON: Mr. Chairman, I think
21 I'd like to object to this line of questions.
22 Mr. Brattebo's testimony does not address the scope
23 of this. His testimony does not get into the
24 rate-making impacts of changes in the ASC.
25 COMMISSIONER HANSEN: Okay. Mr. --
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 oh, did you have any other?
2 MR. ERIKSSON: That's fine.
3 COMMISSIONER HANSEN: Mr. Nye.
4 MR. NYE: He's speaking on the effect
5 that this merger will have on the BPA credit, and
6 that's my last question, and I think it's entirely
7 relevant.
8 COMMISSIONER HANSEN: I believe the
9 Chair is going to sustain the objection.
10 MR. NYE: No further questions.
11 COMMISSIONER HANSEN: Okay. Mr. Ward.
12 MR. WARD: No questions, thank you.
13 COMMISSIONER HANSEN: Mr. Richardson.
14 MR. RICHARDSON: Thank you,
15 Mr. Chairman. Just a couple.
16
17 CROSS-EXAMINATION
18
19 BY MR. RICHARDSON:
20 Q. Mr. Brattebo, the -- good morning.
21 A. Good morning.
22 Q. The BPA credit is a significant issue
23 for the ratepayers in Utah Power and Light service
24 territory in Idaho, isn't it?
25 A. That also.
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 Q. And do you recall that this Commission
2 issued or have you reviewed the Notice of Hearing
3 that this Commission issued in February of this
4 year?
5 A. I'm not familiar with it, no.
6 Q. Would you accept, I guess subject to
7 check, that in that Notice of Hearing, this
8 Commission directed the Applicants to address the
9 Company's continued eligibility to participate in
10 the BPA residential exchange program?
11 A. Subject to check.
12 Q. And do you know if the Company did
13 that in its direct testimony or in the case in this
14 matter?
15 A. I'm not aware that they did, no.
16 Q. And your testimony is filed actually
17 in response to testimony filed by the Public Power
18 Council, isn't it?
19 A. That is correct.
20 Q. It wasn't in an attempt to comply with
21 the Commission's directive that the Company address
22 this issue on its own?
23 A. No.
24 Q. Pardon me?
25 A. No.
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 Q. And your Exhibit No. 2 is actually a
2 Supplemental Response to a Production Request, isn't
3 it?
4 A. That is correct.
5 Q. In the original Response, did the
6 Company provide any documentation, correspondence,
7 or analyses that's requested in this Discovery
8 Request?
9 A. Could you repeat the question?
10 Q. In the initial Response which I will
11 note is attached to Staff witness Sterling's
12 testimony of Exhibit No. 106, are there any
13 analyses, correspondence, or studies attached to
14 that Response?
15 A. No, there are not.
16 Q. Is that because there are none?
17 A. There are none, to my knowledge.
18 Q. So the only analyses, studies, or
19 correspondence PacifiCorp has had with Bonneville
20 Power on this very signature issue are the letters
21 attached to your Supplemental Response?
22 A. No. I would say there's nothing in
23 writing. But there was a number of conversations
24 between the legal counsels of both Bonneville and
25 PacifiCorp related to this issue, at which point
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 Bonneville Counsel advised ours that we would
2 continue to be eligible for the exchange program.
3 Q. And all of that is oral. There's
4 nothing in writing on this significant issue other
5 than these two letters?
6 A. That's correct. They are -- that is
7 not correct. Actually, there are a couple of
8 e-mails if one could call those writings.
9 Q. And is it your interpretation that
10 those e-mails are not responsive to this Production
11 Request?
12 A. They were not in response to this
13 Production Request.
14 Q. Is it your interpretation that those
15 e-mails should not be provided to this Commission to
16 review in response to this Production Request?
17 A. They could be.
18 MR. RICHARDSON: Mr. Chairman.
19 THE WITNESS: They were not asked for.
20 MR. RICHARDSON: Mr. Chairman.
21 Q. BY MR. RICHARDSON: Were they asked
22 for or were they not asked for, in your mind, in
23 this Production Request?
24 A. I'd have to look at the Production
25 Request to check.
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 Q. Isn't it in front of you, Exhibit
2 No. 2? It's your exhibit.
3 A. Okay. What was your question again?
4 Q. Is it your view that those e-mails
5 and -- well, I guess let's backtrack a step.
6 The only other thing in the Company's
7 possession, the only other document in the Company's
8 possession relating to the Bonneville credit as is
9 impacted by this merger are these two letters and
10 those e-mails that you referred to?
11 A. Yes.
12 Q. And nothing else?
13 A. Nothing else.
14 Q. And those e-mails, in your view, are
15 not responsive to this Production Request?
16 A. Let me look at them.
17 In general, I would say the e-mails
18 probably don't add any additional information. They
19 are simply a -- an e-mail from Bonneville with the
20 proposed letter attached for review.
21 MR. RICHARDSON: Mr. Chairman, I'm
22 going to move that the Company be compelled to
23 provide the e-mails in question, and that they be
24 provided to all parties and all parties have an
25 opportunity to provide either additional testimony
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 or additional briefing if those e-mails suggest that
2 the testimony and exhibits are not in conformance
3 with how they appear at this point; because it's my
4 view, Mr. Chairman, that it's not the Company's
5 decision to decide what's relevant or not in a
6 Response to a Production Request. They are for the
7 Commission to review. So I'd ask the Company be
8 compelled to provide additional documentation and
9 they can perhaps provide it before the hearing is
10 concluded and we can have a chance to look at it and
11 respond accordingly.
12 COMMISSIONER HANSEN: Is there any
13 objection to the Motion?
14 MR. ERIKSSON: Mr. Chairman, I don't
15 object to the Motion, subject to review as to
16 whether or not these e-mails are between Counsel or
17 what the nature -- whether they are e-mails between
18 BPA's counsel and PacifiCorp's counsel that may be
19 privileged. But other than that, I have no
20 objection to providing them.
21 MR. RICHARDSON: Mr. Chairman, may I
22 respond?
23 COMMISSIONER HANSEN: Mr. Richardson.
24 MR. RICHARDSON: If the e-mails happen
25 to be between Counsel between the Company and
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 Bonneville, doesn't protect those in attorney/client
2 privilege documents because communications between
3 the Company and Bonneville are nonclient.
4 COMMISSIONER HANSEN: Mr. Eriksson, do
5 you have any response?
6 MR. ERIKSSON: I want to see what the
7 e-mails are.
8 COMMISSIONER HANSEN: Let's go at ease
9 for about five minutes and give Mr. Eriksson a
10 chance. You can look at the e-mails and we'll come
11 back. Is that fine?
12 MR. ERIKSSON: Yes.
13 COMMISSIONER HANSEN: Okay, we'll go
14 at ease for about five minutes.
15 (Recess.)
16 COMMISSIONER HANSEN: Okay, let's go
17 back on the record. I believe we had a Motion
18 before us from Mr. Richardson. Mr. Eriksson, you
19 wanted some time to look at the document. Do you
20 have any comment?
21 MR. ERIKSSON: No, we'll be glad to
22 provide those.
23 COMMISSIONER HANSEN: Okay. So
24 without objection, then, the Motion then -- you will
25 provide the e-mails. Is that correct?
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 MR. ERIKSSON: Yeah, as soon as we
2 make some copies, I can get those to Mr. Richardson.
3 COMMISSIONER HANSEN: So we should
4 have those today.
5 MR. ERIKSSON: Yes.
6 COMMISSIONER HANSEN: Is that fine
7 with you then, Mr. Richardson?
8 MR. RICHARDSON: Yes, Mr. Chairman,
9 thank you. And that concludes my questioning.
10 Thank you, Mr. Brattebo.
11 COMMISSIONER HANSEN: Mr. Purdy.
12 MR. PURDY: Yes. Thank you.
13
14 CROSS-EXAMINATION
15
16 BY MR. PURDY:
17 Q. Who decides whether ScottishPower will
18 remain eligible for BPA credits?
19 A. It's not an issue of whether
20 ScottishPower remains eligible. It's an issue of
21 whether or not PacifiCorp remains eligible.
22 Q. Thank you.
23 A. And the administrator at Bonneville
24 will and has already made that decision.
25 Q. That decision is not made through FERC
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HEDRICK COURT REPORTING BRATTEBO (X)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 or by FERC? Let me back up.
2 How will that decision ever be
3 formally made or will it ever be formally made, and
4 how do you see that happening?
5 A. The response we received from BPA I
6 assume is a formal response. I guess one could say
7 that officially, until we actually execute
8 contracts, the administrator probably still has some
9 discretion about signing those contracts, but she
10 has already made a determination that we are
11 eligible.
12 MR. PURDY: That's all I have. Thank
13 you.
14 COMMISSIONER HANSEN: Okay. Let's see
15 if we have any questions from the Commission.
16 Commissioner Smith?
17 COMMISSIONER SMITH: Thank you.
18
19 EXAMINATION
20
21 BY COMMISSIONER SMITH:
22 Q. Mr. Brattebo --
23 A. Yes.
24 Q. -- do you understand the 7(b)(2)
25 test? I'm trying to identify the universe of people
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HEDRICK COURT REPORTING BRATTEBO (Com)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 who can actually know what that is.
2 A. Yes, I do.
3 Q. Wow. I assume we don't have time in
4 this hearing for you to help me understand?
5 A. Probably not.
6 Q. Thank you. It's my understanding that
7 the exchange credit program is to be kind of
8 replaced by something we are calling subscription.
9 Is that your understanding?
10 A. That's the proposal the Bonneville
11 administrator has made, yes.
12 Q. Okay. And the states -- four states
13 have been charged with dividing up a meager amount
14 of average kilowatt hours amongst all of the
15 investor-owned utilities in the region?
16 A. That's true. I would agree with it as
17 being meager.
18 Q. And so if in these discussions
19 PacifiCorp, as Utah Power and Light's service
20 territory, is able to walk away with a subscription
21 amount that is equal to today's exchange, can we
22 hold customers harmless from effects of whatever it
23 happens to the average system cost or the exchange
24 program or the 7(b)(2) test?
25 A. If we enter into an agreement to
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HEDRICK COURT REPORTING BRATTEBO (Com)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 settle our exchange rights under a subscription
2 process, the issue of 7(b)(2) goes away. As far as
3 will the new program actually be equal to the
4 current exchange benefits?
5 Q. Yeah, if the average megawatt hours
6 that are allotted to the Utah -- Utah portion of
7 PacifiCorp equal to exchange benefits you get today?
8 A. Well I'm hoping they will be on an
9 average megawatt basis enough to supply our
10 residential and small farm customers in Idaho if
11 100 percent of them are their energy needs. And I'm
12 not sure how that relates to receiving dollars under
13 the current exchange program. We are under
14 settlement, and the current exchange benefits are
15 declining, in fact this year they're quite small and
16 next year they're slightly over three million.
17 So it's hard to say they're equal.
18 They are different mechanisms. If what our
19 customers are entitled to receive is the benefits of
20 federal hydroelectric system, then if PacifiCorp is
21 receiving average megawatts equal -- or receiving
22 average megawatts of federal power equal to our
23 residential and small farm customers in South Idaho,
24 I would say they're receiving that benefit.
25 Q. Okay. If you were to attempt after
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HEDRICK COURT REPORTING BRATTEBO (Com)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 2001 to continue in the residential exchange
2 program, is the 7(b)(2) test an issue?
3 A. The traditional residential exchange
4 program, it is an issue.
5 Q. How do you see that working? I guess
6 my real question is do you see the Utah division of
7 PacifiCorp receiving any exchange credits if the
8 7(b)(2) test is applied?
9 A. It would be total speculation, but I
10 would guess there would be some benefits. However,
11 though, there is another mechanism in the regional
12 account that's called "in lieu."
13 Q. In lieu, yes.
14 A. And Bonneville has indicated that it
15 will use the in lieu provision to eliminate all
16 benefits under the traditional exchange program.
17 Q. So what do you think is the likelihood
18 of continuing in the residential exchange program
19 after 2001 regardless of whether there is a merger
20 or not?
21 A. I would say the likelihood is very
22 low.
23 COMMISSIONER SMITH: Thank you.
24 That's all I have.
25 COMMISSIONER HANSEN: Commissioner?
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P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 COMMISSIONER KJELLANDER: I have none.
2 MR. RICHARDSON: Mr. Chairman.
3 Mr. Chairman.
4 COMMISSIONER HANSEN: Oh, yes.
5 MR. RICHARDSON: I'm assuming that the
6 e-mails that are going to be provided are as
7 innocuous as Mr. Brattebo suggested, but I would
8 like to reserve the opportunity after I read those
9 e-mails to ask further questions of Mr. Brattebo if
10 those issues are raised.
11 COMMISSIONER HANSEN: So granted.
12 We'll go back now. Mr. Eriksson, do
13 you have any redirect?
14 MR. ERIKSSON: No.
15 COMMISSIONER HANSEN: Thank you.
16 (The witness left the stand.)
17 MR. MILLER: Mr. Chairman, the joint
18 Applicants will call Bob Moir.
19 And for the Commission's information,
20 I had previously distributed what's now marked as
21 Exhibit 225. I believe the Commissioners should
22 have that on their desk.
23 COMMISSIONER HANSEN: 225?
24
25
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HEDRICK COURT REPORTING BRATTEBO (Com)
P.O. BOX 578, BOISE, ID 83701 PacifiCorp
1 BOB MOIR,
2 produced as a witness at the instance of
3 ScottishPower, being first duly sworn, was examined
4 and testified as follows:
5
6 DIRECT EXAMINATION
7
8 BY MR. MILLER:
9 Q. Sir, would you state your name?
10 A. My name is Bob Moir.
11 Q. And how do you spell your last name?
12 A. M-O-I-R.
13 Q. By whom are you employed and in what
14 capacity?
15 A. I -- I'm employed by ScottishPower as
16 a general manager of their metering business.
17 Q. Of the metering business?
18 A. Yes.
19 Q. In that position, what generally are
20 your duties and responsibilities?
21 A. My responsibilities are controlling
22 and managing all things metering for ScottishPower,
23 Manweb, and Southern Water, which takes me into the
24 control of budgets, control of manpower, and
25 ensuring the performance is achieved within the
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HEDRICK COURT REPORTING MOIR (Di)
P.O. BOX 578, BOISE, ID 83701 ScottishPower
1 organizations for metering activity for which 1,000
2 people work.
3 Q. Very good. Did you previously in this
4 case have occasion to file direct testimony
5 consisting of 22 pages?
6 A. I did, yes.
7 Q. And accompanying that testimony, were
8 there exhibits marked 206 through 212?
9 A. There was, yes.
10 Q. Did you also have occasion to file
11 rebuttal testimony consisting of five pages?
12 A. I did, yes.
13 Q. Do you need to make any additions or
14 corrections to either your direct or rebuttal
15 testimony?
16 A. No.
17 Q. If I asked you the questions that are
18 set forth in your direct and rebuttal testimony
19 today, would your answers be the same as they are
20 written in your direct and rebuttal testimony?
21 A. They would, yes.
22 Q. To the best of your knowledge, is
23 your -- is the testimony contained in your direct
24 and rebuttal testimony true and correct?
25 A. It is, yes.
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HEDRICK COURT REPORTING MOIR (Di)
P.O. BOX 578, BOISE, ID 83701 ScottishPower
1 MR. MILLER: If the Chair would
2 permit, I have a couple of additional questions for
3 Mr. Moir.
4 Q. BY MR. MILLER: Mr. Moir, do you have
5 in front of you what has been marked as
6 Exhibit No. 225?
7 A. I do, yes.
8 Q. Could you explain for the Commission
9 what that is?
10 A. This is a -- an independent report
11 commissioned by ScottishPower and carried out by a
12 firm called Jie (phonetic) -- or, J -- sorry -- BS
13 Energy, Sacramento, California. And basically, it
14 was a nationwide survey to compare a proposal of
15 ScottishPower and PacifiCorp against offerings of
16 other US utilities.
17 Q. And I hate to admit this, but was the
18 exhibit -- it was not attached to your rebuttal
19 testimony, and was that just due to oversight?
20 A. It was, yes.
21 Q. And when that was discovered, the
22 exhibit was distributed to all the parties by way of
23 a Supplemental Data Response?
24 A. That's correct.
25 Q. Who is JBS Energy, to your knowledge?
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HEDRICK COURT REPORTING MOIR (Di)
P.O. BOX 578, BOISE, ID 83701 ScottishPower
1 A. JBS Energy is a consultancy firm who
2 deals specifically with energy and economics of
3 energy for the entire US.
4 Q. And if we look for just a moment at
5 the study or the report, does the first page of the
6 text of the report contain a executive summary of
7 the firm's findings?
8 A. It does, yes.
9 Q. Just one more area of questions:
10 As I understand it, the proposals by
11 ScottishPower fall basically into three areas; that
12 is, service performance standards, customer service
13 standards, and network performance standards?
14 A. That's correct, yes.
15 Q. Is that correct?
16 Mr. MacLaren, who will be the next
17 witness, has filed testimony relating to network
18 performance standards?
19 A. Yes, and reliability, yes.
20 Q. So questions relating to service
21 performance and customer service standards should be
22 directed to you. Service -- or questions directed
23 to network performance standards should be directed
24 to Mr. MacLaren. Is that correct?
25 A. That's correct, yes.
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HEDRICK COURT REPORTING MOIR (Di)
P.O. BOX 578, BOISE, ID 83701 ScottishPower
1 MR. MILLER: Mr. Chairman, if there's
2 no objection, we would ask that the direct and
3 prefiled testimony of Mr. MacLaren -- pardon me --
4 Mr. Moir be spread on the record as if read, and
5 Exhibits 206 through 212 and Exhibit 225 be marked.
6 COMMISSIONER HANSEN: If there is no
7 objection, the testimony will be spread, direct and
8 rebuttal testimony be spread upon the record. Being
9 none, be so ordered.
10 (The following prefiled direct and
11 rebuttal testimony of Mr. Moir is spread upon the
12 record.)
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HEDRICK COURT REPORTING MOIR (Di)
P.O. BOX 578, BOISE, ID 83701 ScottishPower