HomeMy WebLinkAbout20040419min.docIDAHO PUBLIC UTILITIES COMMISSION
MINUTES OF DECISION MEETING
APRIL 19, 2004 – 1:30 P.M.
In attendance were Commissioners Paul Kjellander, Marsha Smith and Dennis Hansen.
Commissioner Kjellander called the meeting to order. The first order of business was approval of the CONSENT AGENDA, items 1-2.
Regarding item 2, Commissioner Hansen stated that before he could support approval of the application, he needed to be assured that if default of the loan were to occur, neither regulated customers nor regulated assets would be held liable in any way. Terri Carlock replied that this loan would be tied to the first mortgage, so if there were more than just this loan at default, it could go against the regulated customers, and it would be dealt with in a rate case. She said that a lot of the loan is to finance broadband, and the Commission hasn’t taken an official position on the financing of broadband. Commissioner Hansen clarified that most of the loan would be going toward broadband services, which could be classified as fully non-regulated. Commissioner Hansen questioned if it could be risky, given the problems we have seen with the big telecommunications companies. Ms. Carlock replied that her position is that there are a lot of entities supporting broadband services and to not allow financing for broadband services would be a step we would not want to take without a hearing. She said that in looking at their overall financials, it doesn’t appear they are coming up against any covenant requirements that would create a problem, and that is why she recommended approval at this time. Commissioner Kjellander pointed out that regarding broadband and rural companies, it hasn’t been separated out as to what is Title 62 so it’s still all regulated today. Ms. Carlock concurred that is the case—we don’t have a specific ruling on broadband as to how it would be treated. Commissioner Hansen stated that with the information and concerns he has, he was not able to support the request at this time and was uncomfortable with the risk.
Commissioner Kjellander stated that the two Consent Agenda items would be voted on separately. He made a motion to approve Consent Agenda item 1. A vote was taken and the motion carried unanimously.
Commissioner Smith moved for approval of item 2. There was no further discussion. A vote was taken and the motion carried two to one, with Commissioner Hansen opposed.
The next order of business was MATTERS IN PROGRESS:
C. Hall and W. Hart’s April 13, 2004 Decision Memorandum re: Qwest Competitive Response Tariffs, Advice Nos. 04-02-N and 04-01-S.
Ms. Hall reviewed her Decision Memo. There were no questions or comments. Commissioner Kjellander moved for approval of the tariff filing with Staff’s recommendations. A vote was taken and the motion carried unanimously.
Don Howell’s April 16, 2004 Decision Memorandum re: Idaho Power’s PCA Application for Electric Service from May 16, 2004 through May 31, 2005, Case No. IPC-E-04-09.
Mr. Howell reviewed his Decision Memo. Commissioner Smith moved for approval of modified procedure, adopting the Staff’s suggested comment schedule and suspending the May 16th expiration of the PCA rates until May 31st, with the clarification that the three rate classes don’t have credits—they have been paying the remainder of the power supply costs from the crisis years. A vote was taken and the motion carried unanimously.
Scott Woodbury’s April 16, 2004 Decision Memorandum re: Case No. UWI-W-04-02 (United Water) Agreement for Purchase and Sale—Terra Grande—Certificate Amendment, Status Report. (No memo.)
Mr. Woodbury reviewed the status of the case that was processed under modified procedure. He stated that as set forth in the agreement, a 90-day due diligence period was established. He said it appears the Terra Grande water system is in worse condition than originally thought and additional investment is required. He noted that in Staff’s comments, it states that given the deteriorated condition of the water system an additional investment of $125,000 will be required in addition to the $122,000 they were originally looking at. He said Terra Grande is out of compliance with DEQ and to maintain the system will require an investment of $250,000. He said Terra Grande customers currently pay $216 per year, and if maintained as an independent system, to carry the note on the investment required, customer rates would go up to $577 per year, while United Water’s rates on a system-wide average are $326 per year for residential customers. He said if the agreement falls through, Staff recommends a certificate be issued and that the Commission begin regulation of Terra Grande. He stated that the Company has proposed to eliminate the $47,000 cash payment to Barbara Child for purchase of the system, and she is considering this alternative. He stated that no action is required at this time.
Commissioner Hansen asked if United Water has a rough estimate of how much additional money would need to be spent above the $47,000 to bring the system up to DEQ’s standards. Mr. Woodbury stated that in the application the company was looking at $122,000 of investment in addition to the $47,000, and now the company is looking at additional investment of $125,000 and is proposing to eliminate the $47,000 cash payment.
Commissioner Smith asked for clarification as to the total cost of the system. Mr. Woodbury confirmed that it will cost $250,000 to upgrade the system. If the system remains independent and the purchase does not go through, the customers will need to pay the $250,000, and if United Water buys the system, it will cost the Company $250,000 to make the upgrades.
Commissioner Hansen asked how many customers United Water serves currently. Greg Wyatt of United Water replied that there are 74,500 customers. Commissioner Hansen confirmed that if the Terra Grande customers are brought onto United Water’s system and if the costs were spread out over a customer base of 74,500, it would amount to about $3 per customer, or the costs could be handled as a surcharge to the 117 customers of Terra Grande.
Commissioner Kjellander asked if there were any irrigation resources in the subdivision, and Mr. Woodbury replied there are none. Commissioner Kjellander asked how many wells are in the subdivision, and Mr. Woodbury replied there are four wells, one of which has been capped. He stated the company proposes capping all the wells and moving the customers to its own supply if the transfer of ownership occurs.
Commissioner Kjellander thanked Mr. Woodbury for the update and stated the Commission would move forward when information is available for a final determination.
Scott Woodbury’s April 16, 2004 Decision Memorandum re: Firm Energy Sales Agreement (17.5 MW), Renewable Energy of Idaho, Inc. (Emmett Facility), Case No. IPC-E-04-5 (Idaho Power).
Mr. Woodbury reviewed his Decision Memo. Commissioner Hansen commented that as stated in the Decision Memo, the Staff finds that the contract prices are not necessarily unreasonable, and as he understands it, the purchase rates in the renewable energy contract in total are less than the currently approved avoided cost rates for small QFs. He stated he agreed with both companies that timing is critical and delaying the online date for the facility could bring additional costs. He said approving the agreement is in the public interest, even though Idaho Power didn’t follow previous orders of the Commission, and he would be supportive of the agreement between the two companies.
Commissioner Smith commented that the Commission should not hold the developer hostage or penalize him for the problem pointed out by Staff regarding the avoided cost methodology. She stated she agreed with Commissioner Hansen that the rates appear to be reasonable and it is in the public interest to approve the contract She said if the parties think they can live with the agreement, and it’s not above the avoided cost rates and in fact is below them, then the ratepayers are getting a bargain, too. She said we need to work on the mechanics of the Commission’s process outlined in our previous orders, but we shouldn’t hold this project hostage.
Commission Hansen stated he would make his comments a motion to approve the agreement. There was no further discussion. A vote was taken on the motion and it was approved unanimously.
Scott Woodbury’s April 16, 2004 Decision Memorandum re: Sale of Skookumchuck Hydroelectric Plant, EWG Determination, Case No. AVU-E-04-02 (Avista).
Mr. Woodbury reviewed his Decision Memo. There were no questions or comments. Commissioner Kjellander moved for approval of the item. A vote was taken on the motion and it was approved unanimously.
There were no further items on the agenda and Commissioner Kjellander adjourned the meeting.
DATED this _____ day of April, 2004.
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COMMISSION SECRETARY
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