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HomeMy WebLinkAboutMACRITCH.txt 1 (The following proceedings were 2 had in open hearing.) 3 COMMISSIONER HANSEN: Also exhibits 4 identified as 215, -16, -17, -18, -19, and -22 will 5 be identified and spread on the record. Are there 6 any objections? So ordered. 7 (ScottishPower Exhibit Nos. 215 8 through 219 and 222 were marked for identification.) 9 MR. MILLER: And the witness is 10 available for cross-examination. 11 COMMISSIONER HANSEN: Okay. We'll 12 start with you, Mr. Budge. 13 MR. BUDGE: Thank you, Mr. Chairman. 14 Just a couple, if I may. 15 16 CROSS-EXAMINATION 17 18 BY MR. BUDGE: 19 Q. Mr. MacRitchie, do you know the 20 estimated cost of the transition plan? 21 A. We've estimated the cost to be 22 between -- the preparation of the transition plan to 23 be between one and $2 million. 24 Q. And the cost of implementation of that 25 plan, do you know what that is estimated to be? 602 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 A. Until the plan is developed, I don't 2 have any idea what that would be. 3 Q. And is that a cost that you would 4 anticipate the Company would ask to be paid to the 5 shareholders at a future rate case? 6 A. I would expect all prudent expenditure 7 involved in that in the development and 8 implementation of the transition plan to be 9 recoverable. 10 Q. When you say "prudent" expenditures, 11 are you referring to the fact that the standard for 12 approving costs in a rate-making context is the just 13 and reasonable standard that this Commission makes 14 its decision on in evaluating whether costs should 15 be paid by the ratepayers or not? 16 A. The specific legal wording I can't 17 comment on, but I would expect that normal 18 rate-making processes and procedures would take 19 effect. 20 Q. So when you use the word "prudent," 21 you would then mean whatever the rate-making 22 standard is, and if in Idaho the Statute says that 23 the standard is "just and reasonable," that's what 24 you would mean by "prudent"? 25 A. If that's what the standard says. 603 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 Q. Just one area I want to explore with 2 you: 3 If I understand the common theme of 4 ScottishPower's case in this matter is basically 5 this, that the rates of PacifiCorp customers over 6 time will be lower with the merger than they 7 otherwise would have been, and therefore, the 8 proposal is in the public interest. 9 Would that -- would you basically 10 agree with that as a common theme that ScottishPower 11 has proposed here through various witnesses? 12 A. That's one element of the -- the 13 conclusion that we come to that this is very much in 14 the public interest. There are other elements to 15 the proposal that ScottishPower is putting forward 16 involving many benefits associated with the customer 17 service and system performance that you've heard to 18 date, but that is one element. 19 Q. You don't agree that when we talk 20 about the rates to the ratepayers, that the Company 21 is contending it will be lower with the merger than 22 we would have been without the merger? That's the 23 Company's position, is it not? 24 I think that's a "yes" or "no" 25 question. 604 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 A. I'm sorry, could you rephrase the 2 question or repeat the question? Sorry. 3 Q. Is it the Company's position in this 4 case that the rates charged by customers will be 5 lower with the merger than without the merger? I 6 think that can be answered "yes" or "no." 7 MR. MILLER: I wonder if the witness 8 could be directed, Mr. Budge, to a specific place in 9 his testimony that you're referring to. 10 Q. BY MR. BUDGE: It's shown up through 11 the testimony of many witnesses. Let me just refer 12 you then to -- I think the first time we had 13 discussion on it would be in Mr. Richardson's direct 14 testimony, page 3, lines 7 through 8. 15 Mr. Richardson made this statement, and I'll ask 16 you, Mr. MacRitchie, if you agree or disagree with 17 this statement by Mr. Richardson: 18 Quote, Over time, prices for customers 19 will be lower than they would be without the merger. 20 Would you agree with that statement? 21 A. I would. 22 Q. Okay. Is it also the position of the 23 Company that I've heard promoted in this case that 24 it really shouldn't matter what ScottishPower pays 25 for its package of programs and initiatives to 605 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 transform ScottishPower; as long as they result in 2 savings that are more than the cost, the ratepayers 3 can't be injured. Would you agree with that 4 statement? 5 MR. MILLER: Again, Mr. Chairman, I 6 wonder if the witness could be directed to a portion 7 of his testimony. 8 MR. BUDGE: No, I don't have a direct 9 portion to refer to, Counsel. 10 MR. MILLER: Well, the purpose of this 11 hearing is to cross-examine the witness upon his 12 testimony. I would just like to know what point -- 13 is he being cross-examined on his testimony or 14 something else? 15 COMMISSIONER HANSEN: Mr. Budge. 16 MR. BUDGE: Well, Mr. Ritchie (sic) 17 testifies at some length about the benefits of the 18 merger and the various cost savings both in his 19 direct and rebuttal testimony and why that's in the 20 public interest and the like, and I think we 21 certainly should be able to cross-examine him as to 22 this basic theme of the Company that he reiterates 23 in his testimony that this merger is in the public 24 interest and we're better off with it. I think this 25 is normal cross-examination of a Company witness. 606 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 He -- he testified extensively about 2 the merger transition plan. And, certainly, this 3 cost goes to the merger transition plan and the 4 benefits and burdens, as well as that 5 transmission -- or, that transition plan. This is 6 precisely the area I'm trying to go to as to how we 7 implement the transition plan, and how we segregate 8 and evaluate the costs of the transformation as 9 compared with the anticipated future benefits, both 10 of which he testifies to. 11 COMMISSIONER HANSEN: I think it does 12 have a relationship and the Chair will allow the 13 question. 14 THE WITNESS: Could you repeat the 15 question, Mr. Budge? 16 Q. BY MR. BUDGE: Well, and just to go 17 ahead and lay some further foundation as requested, 18 on page 6 of your rebuttal testimony, lines 17 19 through 19, you state that PacifiCorp -- Real 20 opportunities for cost savings exist, and they will 21 be confirmed and developed as a part of the 22 transition planning process that will take place 23 following closure. 24 Is that your testimony? 25 A. That is my testimony, yes. 607 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 Q. Now I want to ask you questions 2 consistent with that. The Company takes the 3 position, does it not -- and let me ask you this as 4 a hypothetical, because it has been posed as a 5 hypothetical by the Company. 6 Let's assume that if this entire 7 transition results in $1 of cost savings as a result 8 of the merger, then at least theoretically, the 9 rates paid by the customers would be lower than they 10 otherwise would have been without the merger. Would 11 you agree with that statement? 12 A. If that was the only element 13 associated with it, that probably would then, in 14 hypothetical terms, be true as long as any costs 15 associated were properly recovered, were properly 16 offset by the savings. 17 Q. All right. And it wouldn't matter 18 under this theoretical, this hypothetical that I'm 19 giving you, whether ScottishPower spent a thousand 20 dollars or the $135 million that's been discussed or 21 even a billion dollars to implement this package of 22 programs and initiatives, as long as the resulting 23 savings that we may know out there in five years 24 when the transformation has been completed, as long 25 as the savings that result from that expenditure is 608 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 $1 higher than theoretically, would you not agree 2 that rates would be lower than they otherwise would 3 have been because that $1 is that much less in costs 4 than the Company expended to generate those savings? 5 A. Assuming that was on an annual basis, 6 that would be the case. 7 Q. You would accept that? 8 A. I think so. 9 Q. Now let's assume that we go down this 10 same five-year path and the Company has spent this 11 same amount, whatever figure we choose, the 12 135 million, billion, or whatever; and let's assume 13 that we come to a general rate case and the Company 14 comes forward to this Commission and is able to make 15 a showing that we generated savings of $134,000,999 16 (sic), being $1 less than the Company expended to 17 bring these benefits. Are you with me on that, so 18 we've got a $1 shortfall. 19 And let's assume when this question is 20 put to this Commission under a rate-making standard, 21 this Commission has to decide was that $135 million 22 a just and reasonable expenditure for the Company to 23 have made five years prior in trying to transform 24 the Company. Are you with me so far? 25 And let's assume that this Commission, 609 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 for a number of reasons, said, ScottishPower, you 2 made a tremendous effort. You fell $1 short, but 3 that's not bad on 135 million because there's a lot 4 of other good things you did. We have a solid 5 company now, it's financially sound, we have less 6 customer complaints, you've taken care of the 7 environment. We now are willing to conclude that 8 under the just and reasonable standard, that was a 9 prudent expenditure and we will allow you to recover 10 the full $135 million from the customer. 11 Follow me there? 12 Then isn't it true that theoretically, 13 the $1 shortfall resulted in rates being greater 14 than they otherwise would have been without the 15 merger? 16 A. No. 17 Q. Well, that's the exact opposite of 18 what you told me the $1 savings created if you 19 exceeded your costs. 20 A. No, your first question did not imply 21 the impact on rates. The issue is if you're going 22 to make -- 23 For a start, the hypothetical example 24 is completely ridiculous inasmuch as we would never 25 undertake a substantial program like that without 610 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 being able to see substantial return before that 2 point. 3 Q. Let's stop right there. 4 MR. MILLER: Mr. Chairman. 5 COMMISSIONER HANSEN: Mr. Miller. 6 MR. MILLER: The witness is entitled 7 to give a responsive answer he's doing without being 8 interrupted. 9 MR. BUDGE: I think he's gone a little 10 bit way beyond the response into an ongoing dialogue 11 and -- 12 THE WITNESS: You asked me a 13 five-minute question and I'm trying to give an 14 answer. 15 COMMISSIONER HANSEN: Excuse me. The 16 Chair would ask that both parties respect the other 17 one. 18 Q. BY MR. BUDGE: Excuse me. You can go 19 ahead. 20 COMMISSIONER HANSEN: If I think the 21 answer is going too far, I would allow that. 22 Okay, back to you, Mr. MacRitchie. 23 MR. BUDGE: Excuse me for 24 interrupting, Counsel and the Chair. 25 Q. BY MR. BUDGE: Go ahead. 611 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 A. As I was saying, the hypothetical 2 example is ridiculous inasmuch as we would never 3 undertake a program that would not substantially 4 return the costs of such program. It would not be 5 $1 more than the savings; it would be substantially 6 more than that. 7 Q. Excuse me. Let's go ahead and explore 8 that one step further. So let's say the Company in 9 fact here, if we deal with real numbers, has 10 submitted a program where it proposes to expend 11 $135 million -- is that not true -- on various 12 programs and initiatives to transform PacifiCorp. 13 Is that right? 14 A. The hundred and thirty -- if I could 15 just qualify your figure: The 135 does not 16 represent the figure that we've said that we would 17 be looking to recover in terms of rates. 18 Q. That wasn't my question. My 19 question -- 20 Let me just ask you, what is the total 21 cost then if you don't accept the $135 million that 22 we've been discussing for days with your witnesses? 23 What is the number that you will say the Company 24 intends to expend to transform PacifiCorp in the 25 form of new programs and initiatives? What is the 612 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 number? 2 MR. MILLER: We'd object to the form 3 of the question. Assumes facts not in evidence. 4 We've only been here one day, not days. 5 Q. BY MR. BUDGE: Just ask this witness 6 to go ahead and testify what he says the cost is if 7 he won't accept my answer. 8 COMMISSIONER HANSEN: I believe he 9 would know. I think he's familiar enough with the 10 case that you could give a number; or if you can't, 11 then just state that you're not familiar with that. 12 THE WITNESS: If I could explain the 13 costs, I think there have been a number of costs 14 that have been bandied about over the past day, and 15 maybe I could try and qualify some of these costs 16 for you. 17 We have made a commitment in terms of 18 system performance and customer guarantees. The 19 benefits, I think Mr. MacLaren testified this 20 morning in terms of the benefit side of that 21 equation. Some 60 million per annum would be in 22 order of the benefits associated with that. 23 The costs associated with that, we 24 have estimated at and we believe we can deliver for 25 at a maximum there what we believe we could live 613 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 below that, but certainly we've estimated around 2 55 million per annum -- sorry, 55 million over 3 five years. That 55 million is a combination of 4 capital and revenue expense expenditure. The 5 capital site is worth 30 million, the revenue about 6 25. 7 So over five years, you're talking 8 about a 25 million per annum operating cost, and 9 around about a one million per annum revenue 10 requirement to cover the capital expenditure. 11 That's what the 55 million represents. 12 What we've said -- sorry, if you can 13 let me finish here. 14 What we've said is that the 55 million 15 will be absorbed in terms of the current -- 16 MR. BUDGE: Mr. Chairman, and I 17 apologize for interrupting the witness, but all I 18 was trying to get this witness to say is give me a 19 cost number that you were spending and he's 20 identified 55 million. I'll accept that so I can 21 ask my next question without full explanation of 22 this issue. 23 COMMISSIONER HANSEN: I agree that was 24 the question you asked, and would you agree that 25 55 million is the answer that you just gave? 614 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 THE WITNESS: That is, yes. 2 COMMISSIONER HANSEN: Then let's 3 proceed on. 4 Q. BY MR. BUDGE: So did I understand 5 your testimony a minute ago when I gave you the 6 hypothetical was that you said it would be 7 ridiculous for the Company to spend that kind of 8 money without knowing for sure that the benefits 9 derived from it would be greater? That would be 10 ridiculous? 11 A. I said that, yes. 12 Q. Okay. And in this particular 13 company -- or, in this particular case, isn't it a 14 fact that the Company has, in fact, quantified costs 15 of these various programs but has not done any study 16 or analysis to quantify the expected benefits? 17 A. No. 18 Q. So you would -- were you present when 19 other witnesses Mr. O'Brien and Mr. Richardson both 20 admitted on costs that the Company had not done any 21 specific quantitative analysis to determine the 22 amount of costs aside from the ten million in 23 corporate savings? 24 MR. MILLER: Mr. Chairman, again, I'm 25 not sure that those witnesses admitted that. Rather 615 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 than argue the point though, if it can just be noted 2 that that's a questionable assertion, I think the 3 witness can go ahead and answer. But I just didn't 4 want to leave it unrebutted. 5 MR. BUDGE: I guess my response is, 6 Mr. Chairman, is this witness said it was ridiculous 7 for them to spend any money to institute a program 8 without knowing what the savings were, and yet 9 that's precisely what his sponsored testimony is: 10 That we will do a transition plan and once the 11 transition plan is done, then we will know the 12 savings. And it seems to be -- his statement that 13 it's ridiculous to expend costs without knowing the 14 benefit seems to be in conflict with his testimony 15 and I thought it was proper area of 16 cross-examination. 17 MR. MILLER: Well, I think the area is 18 proper. I just think the assertion that 19 Mr. Richardson and Mr. O'Brien admitted something is 20 not correct. Perhaps the question could just be 21 rephrased. 22 COMMISSIONER HANSEN: Did you have a 23 comment? 24 MR. BUDGE: Let me just, maybe to 25 speed things up, go into one final question or two 616 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 and avoid any controversy on it. 2 COMMISSIONER HANSEN: All right. 3 Q. BY MR. BUDGE: And you may not be able 4 to answer this, Mr. MacRitchie, but are you aware 5 that the standard for approving the merger before 6 this Commission requires that the merger be in the 7 public interest? 8 A. I do. 9 Q. And you are also aware that this 10 Commission must find that the merger would not have 11 an adverse affect on rates paid by the customer? 12 A. I do. 13 Q. And would you agree that neither of 14 those standards would apply in a general rate-making 15 case when the standard is you call "prudency," and 16 I'll represent to you Idaho law requires "just and 17 reasonable"? Would you agree that the two standards 18 are different? 19 A. Yes. 20 MR. BUDGE: No further questions. 21 COMMISSIONER HANSEN: Thank you. 22 I believe we will take about a 23 ten-minute break right now. We'll come back on at 24 five after three. 25 (Recess.) 617 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 COMMISSIONER HANSEN: Okay, we'll go 2 back on the record. I believe we just finished with 3 Mr. Budge. We'll move to Mr. Nye. 4 MR. NYE: No questions. 5 COMMISSIONER HANSEN: Mr. Ward. 6 MR. WARD: The question should be 7 quicker than my connection to the microphone. 8 9 CROSS-EXAMINATION 10 11 BY MR. WARD: 12 Q. Mr. MacRitchie, in your rebuttal 13 testimony, you discuss the transition plan that will 14 be filed subsequently with the Commission. Do you 15 recall that testimony? 16 A. I do. 17 Q. And would you agree with me that 18 notwithstanding any other consideration about the 19 transition plan, it is to be filed with the 20 Commission and to be developed in part to induce the 21 Commission to approve this merger? Correct? 22 A. Sorry. Could I -- I just understand 23 the question. What you're saying is we -- that the 24 act of filing it is as part of an inducement to 25 approve the merger. Is that what you're asking? 618 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 Q. Certainly. Isn't that true? 2 A. No, I think it's -- I wouldn't term it 3 an "inducement." What I would say is it's a 4 recognition of the wish and a legitimate desire of 5 the Commission to understand what ScottishPower and 6 PacifiCorp are jointly going to undertake in terms 7 of the transformation of this business. 8 Q. Well, let me ask the question in 9 another way: 10 Suppose, based on the evidence that 11 we've seen in this proceeding, that the Commission 12 approves the acquisition in a relatively expeditious 13 fashion. You can envision that, can't you? 14 A. I would like to think that, yes. 15 Q. All right. And consequently, 16 thereafter, the transition plan is filed and the 17 Commission, after reviewing it, determines that it's 18 wholly unsatisfactory for whatever reason. 19 Now, at that point, would you agree 20 with me that the Commission may have some remedies 21 with regard to that plan, but there's one that it 22 would not have, and that is it couldn't undue the 23 merger, could it? 24 A. No, it could not. 25 MR. WARD: That's all I have. Thank 619 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 you. 2 COMMISSIONER HANSEN: Mr. Richardson. 3 MR. RICHARDSON: Quick couple, 4 Mr. Chairman. 5 6 CROSS-EXAMINATION 7 8 BY MR. RICHARDSON: 9 Q. Mr. MacRitchie, assume with me that 10 under PacifiCorp's management of this utility, that 11 rates are trending down. Do you have that 12 assumption in mind? 13 A. I'm sorry, I can't comment on the 14 rates of PacifiCorp. It's not an area I've had a 15 great deal of focus on. 16 Q. Could you repeat that? 17 A. It's not an area that I could comment 18 on as to whether the rates of PacifiCorp going 19 forward or historically in terms of Idaho are going 20 down or up. 21 Q. I said to just assume that. 22 A. Oh, sorry. I can assume that, yes. 23 Q. Assume that the rates are going down 24 over time and have been trending down under 25 PacifiCorp management; and yesterday we heard 620 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 PacifiCorp's chief executive officer talk about how 2 inefficiently managed this utility has been. Were 3 you here for that? 4 A. I'm not sure I recall exactly these 5 words, but I was here for his testimony. 6 Q. You understand that that was the gist 7 of his testimony? 8 A. I'm not sure I would have summarized 9 his testimony in that respect. 10 Q. You don't recall Commissioner Hansen 11 asking the CEO of PacifiCorp about its inefficient 12 management? 13 A. I will take it from you that that's 14 what was said. 15 Q. Okay. But under this self-admitted 16 inefficiently-managed utility, assuming rates are 17 going down, and your proposal is to accelerate 18 PacifiCorp's performance and efficiency. Correct? 19 A. That is correct. 20 Q. So if you're accelerating this 21 efficiency, we can assume that a downward trend in 22 rates, if there is a downward trend in rates, would 23 accelerate? 24 A. That would be the situation, yeah. 25 Q. And yet you're suggesting, aren't you, 621 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 that rates be frozen for at least five years, or at 2 least not changed? 3 A. No, that's not what we've asked for. 4 Q. Okay. Well look at page 2 of your 5 direct testimony -- not page 2. Page 13, line 12. 6 You say it's going to take up to five years for the 7 transformation: Our current estimate is that it 8 will take up to five years to undertake the 9 transformation both in terms of cost and performance 10 improvement. 11 Correct? 12 A. That's correct. 13 Q. All right. So you're suggesting it's 14 going to be five years before we see any of the 15 improvements? 16 A. No. It would take up to five years 17 for the transformation to be complete as far as we 18 can estimate at this time. That's not to say 19 improvements will not immediately, on completion of 20 this merger, start to flow through, and we would 21 expect that to be the case. 22 Q. Well if rates are trending down and 23 you're going to make and accelerate that process, 24 wouldn't it be possible for ScottishPower to, in 25 effect, guarantee a rate decrease? 622 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 A. As I said before, in the hypothetical 2 situation, because I don't know the detail in terms 3 of the rates forward projections and I don't know 4 how other factors in terms of their costs of 5 PacifiCorp are going forward, are changing, what I 6 can say is that we will make an incremental change 7 to PacifiCorp and will improve efficiency beyond 8 that that PacifiCorp could manage on its own in 9 terms of the speed and the extent that we could 10 achieve. So I'm not sure I could agree with your 11 statement. 12 Q. And the reason you can't agree with my 13 statement is because you couldn't verify the 14 premise, and that is that if rates are going down. 15 But I did hear you say that you will improve this 16 company's efficiency? 17 A. You are correct. 18 Q. That's not a contingent; that's going 19 to happen? 20 A. That will happen. 21 Q. And if this utility is operating in 22 such a way that its rates are trending down, then 23 we're going to see -- then if that's the true, just 24 assuming that's true, then we will see decreased 25 rates. Correct? 623 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 A. If that was the case, then you would 2 expect to see decreased rates, yes. 3 MR. RICHARDSON: Thank you, 4 Mr. Chairman. Thank you. 5 COMMISSIONER HANSEN: Mr. Purdy. 6 7 CROSS-EXAMINATION 8 9 BY MR. PURDY: 10 Q. Mr. MacRitchie, you're familiar, I'm 11 sure, with what we've now come to know as the most 12 favored nation provision that the Company has 13 offered in this proceeding, are you not? 14 A. I am, yes. 15 Q. All right. And can I fairly 16 paraphrase that or summarize that as being the 17 offering by ScottishPower that any benefit or 18 commitment it makes in any other of its 19 jurisdictions that goes above and beyond or is in 20 addition to what has already been offered here is 21 also available to -- to Idaho? 22 A. That's not exactly correct. What 23 we've said is that benefits of a system-wide 24 applicability we would contend should be offered 25 through to all jurisdictions. There will be certain 624 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 elements to do with the Orders in individual states 2 which are specific to their situation and 3 environment, and in these situations, it would not 4 be appropriate to necessarily apply those to other 5 states that don't have the same characteristics. 6 MR. MILLER: Allow me to interrupt, 7 Mr. Purdy, just for your and the Commission's 8 information. Exhibit 220 to Mr. -- Exhibit 220 to 9 Mr. Richardson's rebuttal testimony contains a Data 10 Response Request or Request and Response, and on 11 page 3 of that, the Company's commitment in this 12 area is written out. And I might represent that the 13 writing of that was a very careful undertaking. So 14 I think it's important for everyone to quote 15 precisely on what the Company has committed, rather 16 than characterizing it broadly. So just for 17 everyone's clarification, the exact wording and 18 commitment can be found there. 19 COMMISSIONER KJELLANDER: I'd like to 20 focus on that, but I can't find 220. 21 MR. PURDY: Mr. Chairman, if I could 22 respond to that? 23 COMMISSIONER HANSEN: Yes. 24 MR. PURDY: That's fine, that's 25 helpful, I appreciate it; but nonetheless, I do have 625 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 a question or two that I would like to ask this 2 witness. 3 COMMISSIONER HANSEN: Well, just a 4 second now. I guess maybe we've got to look in 5 another book. We're trying to locate 220. It 6 isn't -- 7 MR. MILLER: Do you just need one 8 copy? 9 MR. KJELLANDER: One would be fine. 10 COMMISSIONER HANSEN: That's the first 11 time we've ever made a mistake here. 12 Okay, we found it. Okay, thank you. 13 We'll go back to you. 14 Q. BY MR. PURDY: All right, with that 15 clarification then, Mr. MacRitchie, do you have now 16 in front of you ScottishPower Exhibit No. 220? 17 A. I do. 18 Q. Why don't you go ahead and identify 19 that for us? 20 A. Do you wish me to read it out? 21 Q. Well, is this, in fact, the Staff's 22 Response to a Production Request of ScottishPower? 23 A. It is, yes. 24 Q. All right. And referring to page 3, 25 there is a Production Request and Response, 626 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 Corresponding Response No. 4 there. The actual 2 Request itself sets forth the Company's most favored 3 nation conditions. Is that true? 4 A. That's correct, yes. 5 Q. All right. Then, in looking at that, 6 I am -- 7 I guess to get right to the point of 8 what I wanted to know is how you define what 9 constitutes a system-wide versus a nonsystem-wide 10 benefit. 11 A. In the wording of that, there is a 12 explanation of what would be excluded, and I guess 13 it's helpful to understand that. It's saying 14 Excludes commitments or benefits that are unique to 15 a particular jurisdiction and situations where, 16 through negotiation in a particular jurisdiction, 17 certain elements of the package may be enhanced 18 while others are reduced to produce a total package 19 that accommodates the unique requirements of that 20 jurisdiction. 21 Now, an example I think Mr. Richardson 22 gave yesterday was the $10 million commitment, which 23 was an initial commitment in discussion. And don't 24 ask me in which state we actually ended up having 25 the discussions; it could well have been in Idaho. 627 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 There was, first of all, a commitment to guarantee 2 that level irrespective of how much of the corporate 3 cost savings were allocated to electricity 4 operations as opposed to unregulated. So first of 5 all, it was clarified inasmuch as it was going to be 6 10 million for electric operations. 7 The next phase was it was going to 8 then be guaranteed against any currency 9 fluctuations. 10 And all of these then, these are 11 general system-wide applicability and can apply. 12 To give you the converse of that, for 13 instance, in Oregon, they have an alternative form 14 of regulation which includes certain elements of 15 system performance that are in there. In terms of 16 our discussion with them about how they would see 17 fit to accept our commitments in system performance, 18 we -- we agreed that the penalty payments which were 19 $1 a customer would not be applicable and we would 20 take them out and we would actually -- so, you know, 21 we're not proposing to remove all penalty payments 22 in each jurisdiction, because at the end of the day, 23 it was specific for Oregon in terms of the way we 24 had to try to fit to their unique characteristics. 25 Q. Were you here -- excuse me. Were you 628 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 here yesterday when the stipulation entered into 2 between PacifiCorp and the Wyoming Commission was 3 discussed? 4 A. I was, and I was partly the 5 ScottishPower person responsible for the negotiation 6 of that with Wyoming Staff. 7 Q. And if my memory is accurate, 8 yesterday Mr. Richardson testified that the rate 9 freeze or rate moratorium or your general agreement 10 not to raise rates in Wyoming was not considered a 11 system benefit that would necessarily be available 12 to Idaho. Do you remember that testimony? 13 A. I do. 14 Q. Do you remember or do you know -- and 15 I just discovered that stipulation hasn't been 16 introduced as an exhibit, so I'll just see if I can 17 do this without that necessity -- but do you know 18 generally what other components of that stipulation 19 might also be considered jurisdiction-unique such as 20 they are not available to the State of Idaho? 21 MR. MILLER: Could I have just one 22 minute to talk to Mr. Purdy? 23 COMMISSIONER HANSEN: We'll go at ease 24 for a moment. 25 (Discussion off the record.) 629 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 COMMISSIONER HANSEN: Okay, we're back 2 on the record. 3 MR. MILLER: For the purpose of making 4 this discussion easier, I have copies of the Wyoming 5 Stipulation that I can distribute, and 6 Mr. MacRitchie can -- there will be some notations 7 on it which will explain, in Mr. MacRitchie's view, 8 which of the commitments in Wyoming are system-wide 9 and which aren't. So the Commission can see quite 10 precisely how he's developed it. So I can do that 11 now if that would be permissible. 12 COMMISSIONER HANSEN: Would you please 13 distribute that? 14 MR. PURDY: Thank you. Mr. Chairman, 15 I think it would serve the purpose of this 16 Commission in this proceeding if this were to become 17 an exhibit to this record -- this proceeding's 18 record -- and so I guess I'll have this marked as, 19 if Commission allows, as Staff Exhibit No. 108. 20 COMMISSIONER HANSEN: Do you want to 21 enter that now then? 22 MR. PURDY: Yes. 23 COMMISSIONER HANSEN: Okay, we have a 24 request to enter this Exhibit 108, identify that on 25 the record. Is there any objection? Being none, it 630 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 will be so ordered. 2 MR. PURDY: All right. Thank you. 3 (Staff Exhibit No. 108 was marked 4 for identification.) 5 Q. BY MR. PURDY: Mr. MacRitchie, you 6 have now been handed what's been marked as Staff 7 Exhibit 108, and I believe you've testified or you 8 can confirm now for me, if you will, is this, in 9 fact, the stipulation that was entered into between 10 PacifiCorp and the Wyoming Commission? 11 COMMISSIONER SMITH: Staff. 12 Commission Staff. 13 THE WITNESS: The Commission Staff. I 14 think the Consumer Advocate Staff of Wyoming, 15 ScottishPower, and PacifiCorp were all joint 16 signatures to the stipulation. 17 Q. BY MR. PURDY: Okay. Thank you for 18 that clarification. 19 Now, in order to speed through this, 20 what I'm going to ask you to do is identify for me 21 any provisions that you think are not applicable to 22 Idaho. And when I say "provisions," I'm talking 23 about conditions or assurances or benefits or 24 guarantees that PacifiCorp and presumably or 25 possibly ScottishPower would offer. So given that, 631 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 why don't you go ahead and identify for us what -- 2 which provisions you think are not applicable or 3 available to Idaho. 4 A. Okay. I didn't get a copy of exactly 5 what you got. Has it got marked up; has it got 6 circles? 7 Yes, it has. Great. Okay, no 8 problem. I've got the original here, so -- 9 The circles basically show -- the 10 circled numbers basically show the clauses that were 11 applicable to Idaho. 12 Q. Sorry, that are or are not? 13 A. That are. 14 Q. Thank you? 15 A. And I think you can see that the 16 majority are applicable to Idaho and we would be 17 quite willing to be -- to have these as conditions 18 of an approval, so -- there are some exceptions to 19 that: 20 Clause three -- clause three is 21 ScottishPower's acknowledgement of the agreement 22 that was between PacifiCorp and the Staff regarding 23 future rate -- a rate plan. Obviously that isn't 24 applicable, but what I would say is I don't know 25 that the course of events in Idaho in terms of the 632 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 discussions between PacifiCorp and Staff and the 2 Commission regarding rates, but to the extent that 3 an agreement is reached between PacifiCorp and the 4 Commission in terms of rates, ScottishPower would 5 obviously honor that agreement and we would -- 6 therefore, it would be applicable in these -- in the 7 context of an agreement being in place. 8 The others, just going through, all 9 the circled ones are applicable. I think the ticks 10 are where it's been specifically put forth in 11 rebuttal -- in testimony or rebuttal testimony that 12 the other ones that we haven't had an opportunity to 13 put it in the record, but we'd be quite willing to 14 have these as part. 15 Number ten doesn't apply because there 16 has been -- there's a set agreement between 17 ScottishPower, PacifiCorp, and Staff regarding how 18 we come to an agreement on base lines, on system 19 performance, and obviously that would be an element 20 that's very specific to Idaho. And that one there 21 was very specific to Wyoming. 22 In terms of 12, I think Mr. MacLaren 23 provided an expanded version of this which has been 24 worked through with the Staff in Idaho and that -- 25 so it's actually taking it to a further stage, and 633 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 we would expect that that level of commitment in 2 terms of the review would be applicable in other 3 states as well, although it's been developed with 4 Idaho Staff. 5 Obviously, 14 isn't applicable, 6 inasmuch as I'm sure if there was in the unlikely 7 event of any penalties, you would not be looking for 8 penalties to be paid to the Wyoming EnergyShare low 9 income group. 10 But the rest all apply. 11 Nineteen we've actually already done, 12 although I don't think we actually committed 13 anywhere on the record that we would do so, but we 14 have done so as part of the filing of the -- with 15 each Commission of the cost allocations. 16 And I'm not sure we need to take legal 17 advice as to whether the twent- -- Clause 24, which 18 talks about the way in which affiliate transactions 19 are measured, because I'm not sure what the actual 20 rate-making or legal requirements in Idaho are, but 21 that was the one very specific to Idaho as to 22 Wash- -- to Wyoming. 23 Twenty-six was -- was -- was basically 24 we said that we would fund the Order of cost 25 allocations and affiliate transactions with Wyoming 634 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 Staff. This was I'm not sure if a specific, but 2 Wyoming Staff said they do not have a lot of 3 resources. If that's the case in Idaho, we would be 4 willing to accept as well that we would fund any 5 such Order if that was particularly the case. 6 The rest you see is all -- is 7 applicable. 8 Thirty-four, the comment there that 9 probably you won't be able to read, says Limited to 10 Idaho's rate-making authority. Other than that, the 11 condition holds. 12 And then 37 through to 40 are just the 13 terms of the stipulation. 14 So I think you can see from that that 15 the majority are applicable and we'd be -- we would 16 be quite content to apply, despite the fact that 17 obviously there is different rules in Idaho, for 18 instance, in terms of access to information. 19 However, we are not presuming to give the Wyoming 20 Staff more access to information than Idaho. We are 21 very pleased to commit to give Idaho the same access 22 to records that are necessary for overseeing the 23 transactions between PacifiCorp and any affiliate 24 transactions and cost allocations. 25 Q. Thank you very much, Mr. MacRitchie. 635 HEDRICK COURT REPORTING MacRITCHIE (X) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 And of course it wasn't my intention to suggest that 2 any conditions that are being agreed to by 3 ScottishPower, that all of them in Idaho are 4 necessarily contained in this document. 5 A. Yes. 6 Q. But I just wanted to find out what 7 portions of these are, in fact, available here as 8 well. Is that your understanding? 9 A. Yes, it is. 10 Q. Great. Thank you. 11 MR. PURDY: With that clarification 12 then, I have no further questions. Thank you. 13 COMMISSIONER HANSEN: Let's see if we 14 have any questions from the Commission. 15 Commissioner Smith. 16 17 EXAMINATION 18 19 BY COMMISSIONER SMITH: 20 Q. Mr. MacRitchie, I just want to talk 21 for a few minutes about distribution costs. 22 A. Yes. 23 Q. And I'll just start by saying I was 24 startled by Exhibit 215, which showed that the 25 nonproduction costs for customer PacifiCorp were 636 HEDRICK COURT REPORTING MacRITCHIE (Com) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 lower than those of Idaho Power Company, and so I 2 guess the explanation must be that these are total 3 PacifiCorp average costs? 4 A. They are the total costs as reported 5 in the -- that FERC Form 1 in 1996. 6 Q. For the corporation? 7 A. For the electric operations of the 8 corporation, yes. 9 Q. So you haven't -- have you looked at 10 Idaho specific distribution costs? 11 A. No, I have not. 12 Q. Well, I guess I have a concern with 13 them, and I guess I'll characterize it as a 14 historically-generous line extension policy has led 15 to exceptionally high distribution costs being in 16 Idaho rate base here. And so my concern is how are 17 you going to get those down? 18 A. These costs represent the operating 19 costs of the Utility. 20 Q. Ah. 21 A. The revenue costs. 22 Q. Not the rate base? 23 A. Not the rate base. I'm not sure that 24 we have any plans or any ideas how we can address 25 that particular issue. But these are specifically 637 HEDRICK COURT REPORTING MacRITCHIE (Com) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 operating costs. 2 And I should say the majority of them 3 probably are allocated costs to Idaho as opposed to 4 scientist costs. 5 Q. I understand that. Well, one thought 6 I had of course was going forward, we've always 7 maintained separate records for jurisdictions 8 Utah Power and the Corp - Pacific Power and Light. 9 A. Yes. 10 Q. Because that's how we regulated them 11 pre-UP&L and PP&L merger. So one thought was we 12 could just use corporate costs instead of Utah 13 costs. How does that strike you? 14 That's unfair, isn't it? 15 COMMISSIONER HANSEN: The Chair will 16 allow that question. 17 (Laughter.) 18 COMMISSIONER SMITH: Yeah, but he 19 doesn't have to answer. 20 THE WITNESS: I don't honestly know 21 the implications of what's being suggested there, 22 but certainly we would be quite happy to work 23 through any scenario with you and give you our 24 views. 25 Q. BY COMMISSIONER SMITH: And certainly 638 HEDRICK COURT REPORTING MacRITCHIE (Com) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 I thought it was appropriate for me to express my 2 concerns regarding level of distribution cost in 3 Idaho. 4 A. Yes, and we understand to a limited 5 extent that there has been historical policies which 6 have led to not so much the cost but the prices in 7 Idaho, and we would appreciate that, but we can do 8 as best we can going forward to the areas that we 9 can influence. 10 COMMISSIONER SMITH: Thank you, 11 Mr. Chairman. 12 COMMISSIONER HANSEN: Thank you, 13 Mr. MacRitchie. 14 MR. MILLER: Uh -- 15 COMMISSIONER HANSEN: Oh, excuse me. 16 We've got to -- now we have to see if we have any 17 redirect. 18 MR. MILLER: Just a very few 19 questions. 20 21 REDIRECT EXAMINATION 22 23 BY MR. MILLER: 24 Q. First, in response to questions from 25 Mr. Budge, you talked about the 55 million in 639 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 anticipated expenditures in order to achieve those 2 benefits. I just wanted to clarify: Is that 3 55 million in addition to PacifiCorp's existing 4 capital budgets or operating budgets? 5 A. I believe we, through Mr. Richardson's 6 rebuttal testimony, made it clear that the 7 55 million would be -- would not be incremental to 8 the PacifiCorp budget; that that would be absorbed 9 and there are ways in which that can be absorbed. 10 We're talking in terms of the numbers, while the 11 total number may appear in a big number, it is over 12 five years. It represents 30 million of capital 13 expenditure. That's 30 million out of some 14 400 million per year, so over that five years is 15 about $2 billion of capital expenditure that 16 PacifiCorp would normally undertake based on 17 historic activity. We are talking about being able 18 to absorb 30 million within that. 19 In terms of operating costs, we've -- 20 the 55 million again represents, as I said, for over 21 five years. The operating cost element of that is 22 $5 million per annum. That $5 million per annum 23 would be absorbed in an overall budget of some 24 400 million nonproduction costs. The ways in which 25 that would be done in customer service and the very 640 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 fact of introducing better service actually delivers 2 lower cost by refining the processes, by simplying 3 the processes, by introducing technology to improve 4 service, you get productivity needs. And a lot of 5 the benefits of that will offset the $5 million per 6 annum that will be necessary to deliver these 7 customer service improvements. 8 So in terms of the cost side of the 9 equation, we don't believe there is any incremental 10 cost. We commit to no incremental cost for 11 PacifiCorp in terms of delivering that. 12 There is obviously the benefit side 13 which is the 60 million per annum number that has 14 been given in Mr. MacLaren's testimony, and as well 15 as up to ten million per annum of corporate cost 16 savings which have been guaranteed. 17 Q. I guess the thing I don't -- the thing 18 I don't understand is if this is a reallocation of 19 PacifiCorp's budgets to achieve these benefits, why 20 couldn't PacifiCorp just do that itself? 21 A. Well, generally, we are not seeing 22 that PacifiCorp could not do what we think needs to 23 be done to PacifiCorp. What we are seeing though is 24 that ScottishPower, with PacifiCorp, can deliver 25 efficiencies in service faster, more economically, 641 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 and with greater certainty. And we've said that in 2 a number of situations in our testimony. 3 So the answer is, yes, PacifiCorp 4 could do these themselves. We don't believe that 5 they could do them as fast with the efficiency that 6 we could do them and with this certainty that we 7 could deliver them. And to a certain extent, it's 8 based on the principle of what you could term the 9 "experience curve," which simply put is if you've 10 done something once before, you can do it again. As 11 far as ScottishPower is concerned, we've done it not 12 once but three times, and in that context we are 13 very certain that we can assist PacifiCorp to do 14 this again, faster, more economical, and with more 15 certainty. 16 I mean, I could give you a couple of 17 examples or just one in terms of time, which is the 18 call center operations. ScottishPower has developed 19 with a proprietary supplier a technology that allows 20 scripting of screens which leads operators through 21 the question and answer, therefore the training 22 requirement for Staff is not -- doesn't need to be 23 as high and involved, means Staff can answer more 24 complex questions and be helped through it. That is 25 available to PacifiCorp and it's our intention that 642 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 that is implemented in PacifiCorp. 2 Now, PacifiCorp could do that 3 themselves, they could develop that. They have to 4 find a supplier that's got the technology and the 5 know-how, but I'm sure they could probably do that. 6 What we're saying is we will bring it 7 to them faster, it will not have to be as much money 8 as they would have to do to deliver that, and there 9 is more certainty that once it's in, it will operate 10 well. 11 Q. Just one last question, and it 12 relates, in part, to your answer you've just given, 13 but it also relates to Mr. Ward's suggestion of what 14 happens if the transition plan filed with the 15 Commission turns out to be wholly or totally 16 unsatisfactory. 17 I take it, based on the answer that 18 you've just given, that you have experience in 19 development of these transition plans? 20 A. I do. 21 Q. And have the benefit of what you refer 22 to as an "experience curve" as a result of that? 23 A. Yes. 24 Q. Based on your experience, what is your 25 opinion of the likelihood that the transition plan 643 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 filed with this Commission would be totally 2 unsatisfactory? 3 A. I believe that is -- it will -- we 4 certainly will not file anything with the Commission 5 that is unsatisfactory. We are looking at 6 significant opportunities to improve the efficiency, 7 and there are clear examples. It's not just based 8 on high-level yard stick. We have identified 9 examples at high level where we can start working 10 when we get to transition planning time to develop 11 these in more detail, and it would be our intention 12 to do that and to deliver the efficiencies from 13 that. So there is no likelihood that the transition 14 plan will not be substantial in this nature. 15 Q. Very good. 16 MR. MILLER: Those are all my 17 questions, Mr. Chairman. 18 COMMISSIONER HANSEN: Okay, thank you. 19 Thank you for your testimony. 20 THE WITNESS: Thank you very much. 21 (The witness left the stand.) 22 COMMISSIONER HANSEN: Mr. Miller, does 23 this complete your case? 24 MR. MILLER: Yes, the Joint Applicants 25 rest and thank the Commission very much for the 644 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 attention you paid to our presentation. 2 COMMISSIONER HANSEN: Okay. We will 3 now move to Public Power Council. 4 MR. RICHARDSON: Thank you, 5 Mr. Chairman. With your indulgence and the 6 indulgence of the Counsel, Public Power Council 7 would like to sponsor both witnesses as a panel. 8 They have prepared the testimony jointly and are 9 prepared to respond to the questions of the parties 10 as a panel if that's acceptable to the Chair. 11 COMMISSIONER HANSEN: The Chair has no 12 problem with that, but I would ask the parties is 13 there any objection to being presented as a panel? 14 Fine. Okay, the request is granted. 15 MR. RICHARDSON: Thank you, 16 Mr. Chairman. With that, the Public Power Council 17 Kevin O'Meara and Kristiana Hansen to the stand. 18 19 20 21 22 23 24 25 645 HEDRICK COURT REPORTING MacRITCHIE (Di) P.O. BOX 578, BOISE, ID 83701 ScottishPower 1 KEVIN P. O'MEARA and KRISTIANA M. HANSEN, 2 produced as witnesses at the instance of the Public 3 Power Council, being first duly sworn, were examined 4 and testified as follows: 5 6 DIRECT EXAMINATION 7 8 BY MR. RICHARDSON: 9 Q. State your name, please, your 10 occupation, stating your position. 11 A. BY WITNESS HANSEN: My name is 12 Kristiana M. Hansen. I'm an assistant economist at 13 the Public Power Council. 14 A. BY WITNESS O'MEARA: My name is 15 Kevin O'Meara. I'm senior economist at the Public 16 Power Council. 17 Q. Would you please briefly describe what 18 is the Public Power Council? 19 A. BY WITNESS HANSEN: The Public Power 20 Council is a trade association representing the 21 common interests of the 120 or so publicly-owned 22 utilities in the Pacific Northwest in a number of 23 reasonable forums, including Bonneville rate cases. 24 Q. Did you two prepare or cause to be 25 prepared the prefiled testimony that was filed in 646 HEDRICK COURT REPORTING O'MEARA/HANSEN (Di) P.O. BOX 578, BOISE, ID 83701 Public Power Council 1 this matter on behalf of the Public Power Council? 2 A. BY WITNESS HANSEN: Yes, we did. 3 Q. And do you have any corrections or 4 additions to make to your prepared testimony? 5 A. BY WITNESS HANSEN: Yes, we have two 6 corrections to make: 7 On page 9, line 3, we would like to 8 change the reference to Mr. Green to Mr. Morris. 9 And also on page 9, line 8, the 10 reference from Witness Green to Witness Morris. 11 COMMISSIONER SMITH: What was the 12 second one? 13 WITNESS HANSEN: Page 9, line 8, 14 Witness Green to Witness Morris. 15 Q. BY MR. RICHARDSON: If I were to ask 16 you the questions that you're asked in your prepared 17 testimony today, would your answers be the same? 18 A. BY WITNESS HANSEN: Yes, they would. 19 MR. RICHARDSON: Mr. Chairman, I'd 20 move that the prepared testimony of the Public Power 21 Council witnesses be spread upon the record as if it 22 were read in full. 23 COMMISSIONER HANSEN: Okay, that 24 testimony will be spread upon the record if there is 25 no objection. Being none, so ordered. 647 HEDRICK COURT REPORTING O'MEARA/HANSEN (Di) P.O. BOX 578, BOISE, ID 83701 Public Power Council 1 (The following prefiled direct 2 testimony of Mr. O'Meara and Ms. Hansen is spread 3 upon the record.) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 648 HEDRICK COURT REPORTING O'MEARA/HANSEN (Di) P.O. BOX 578, BOISE, ID 83701 Public Power Council