20040602min.doc

IDAHO PUBLIC UTILITIES COMMISSION

MINUTES OF DECISION MEETING

JUNE 2, 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—4. Regarding item 2, Commissioner Smith asked if any updates were needed because it had been some time since the filing was made. Mr. Woodbury replied that initially the company was holding off because of the WUTC benchmarking proceedings but the company has now determined it can go forward. Regarding item 3, Commissioner Smith noted that comments were filed by the ITA. There was no further discussion and Commissioner Kjellander made a motion to approve the Consent Agenda. A vote was taken on the motion and it carried unanimously.

The next order of business was MATTERS IN PROGRESS:

Agreement for Purchase and Sale—Terra Grande; Proposed Rescission of Agreement. Status Report, Case No. UWI-W-04-2 (United Water). [No Memo.]

Mr. Woodbury reported that mutually agreeable terms for the rescission of the agreement between United Water and Terra Grande have not yet been reached. He stated that Terra Grande has retained an engineer to assess the condition of its water system. He said Staff has expressed its hope that the engineer will also determine the cost of bringing the system into compliance with DEQ requirements and has requested a copy of the report when it becomes available. He said Terra Grande has represented that the water system is in better condition than reflected in Staff’s comments. He stated that in a recent meeting they discussed the viability of the Terra Grande water system, the ramifications of regulation, and Ms. Child’s expectations. He said Staff has requested a formal reply from Terra Grande to Staff’s comments that will highlight the points of disagreement. He reported that a schedule for water testing has been agreed to by Terra Grande and DEQ and a copy of the schedule has been provided to Staff. He said Terra Grande has replaced a section of pipe at a cost of around $7,000, and Staff has requested that Terra Grande provide a plan for additional capital investment and estimated cost. He stated that Staff anticipates the company may be in a position to provide such a plan once it receives the engineering report.

Mr. Woodbury stated that Ms.Child concedes the Commission has jurisdiction and Staff has requested that Terra Grande provide its customers with a letter setting forth its plan for continued service. He said Staff does not have sufficient information to assess the economic viability of the Terra Grande water system, the quality of water or the physical condition at this point. He said Staff renews its recommendation as set forth in its comments in the prior Decision Memo—i.e. that the Commission establish a new docket for investigation, issue a certificate to Ms. Child for the Terra Grande water system, authorize continued service at present flat rates, require compliance with Commission rules and regulations and require approval prior to any further investment.

Commissioner Kjellander asked for clarification as to whether Staff is suggesting the Commission take action at this point or is just providing a status report. Mr. Woodbury replied that Staff is suggesting a Commission order. Commissioner Kjellander also inquired about the filing that is to be made by Terra Grande, and Mr. Woodbury replied that because Terra Grande believes its system is in better condition than as represented by Staff, Staff just wants Terra Grande to itemize the points of diversion.

Commissioner Kjellander made a motion to accept Staff’s recommendation to establish a separate docket and the other proposed actions as outlined by Staff. A vote was taken on the motion and it carried unanimously.

Scott Woodbury’s May 27th Decision Memorandum re: U. S. Geothermal vs. Idaho Power, Case No. IPC-E-04-8; and Lewandowski and Schroeder vs. Idaho Power, Case No. IPC-E-04-10; Motion for Consolidation and/or Intervention.

Mr. Woodbury reviewed his Decision Memo. Commissioner Hansen asked if moving the filing date for direct testimony from June 2nd to June 9th is the only change that will occur if the cases are consolidated. Mr. Woodbury confirmed that would be the only change and all other dates would remain the same. Commissioner Hansen stated that he thought it would be acceptable to consolidate the two cases. Commissioner Smith concurred with Commissioner Hansen, stating we can consolidate the cases without delaying consideration, and the Commission will then have the opportunity to consider the different kinds of generating technologies. She made a motion to grant the motion to consolidate and allow the date for filing testimony to slip by one week. A vote was taken on the motion and it carried unanimously.

The only other items on the agenda were under FULLY SUBMITTED MATTERS, and Commissioner Kjellander stated the Commission would deliberate on those privately. He then adjourned the meeting.

DATED this _____ day of June, 2004.

_______________________________________
COMMISSION SECRETARY

2