20040719min.doc

IDAHO PUBLIC UTILITIES COMMISSION

MINUTES OF DECISION MEETING

JULY 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 MINUTES FROM PREVIOUS MEETING on July 1st. Commissioner Kjellander made a motion to approve the minutes. A vote was taken on the motion and it carried unanimously.

The next order of business was approval of the CONSENT AGENDA, items 2—5. There were no questions or comments. 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:

Scott Woodbury’s June 24, 2004 Decision Memorandum re: NW Energy Coalition’s Petition to Initiate Investigation of Financial Disincentives to Investment in Energy Efficiency by Idaho Power Company, Case No. IPC-E-04-15 (Idaho Power).

Mr. Woodbury reviewed his Decision Memo. Commissioner Hansen commented that in Order No. 29505 the Commission was very clear in what it wanted to accomplish and it did not intend to include distributed generation. He said he is concerned about expanding the scope beyond what was intended in the order, so he would move to deny Northwest Energy Coalition’s request to include distributed generation in this proceeding.

Commissioner Smith commented that the purpose of opening the proceeding is to figure out how we can separate the earnings we have determined the company is entitled to from the number of killowatt hours they actually sell. She stated it wouldn’t hurt to examine all the aspects of what the company might be involved in with regard to that purpose. She stated she considered this as an open docket to look at other ways to generate energy.

Randy Lobb stated that when the Commission was previously looking at this issue, DSM and distributed generation were included together because they both affect the revenues of the company, and there are probably past disincentives to the company to undertake those types of activities. He said the proceeding is not going to look into the details of distributed generation necessarily or any specific DSM program unless it is in the context of how they affect the revenues of the company and if they lose fixed margin because of implementing those types of programs. He said the scope is pretty limited to lost revenues.

Commissioner Smith stated that would be consistent with what she thought the Commission is doing and that we ought to eliminate disincentives for those kinds of programs, be it interconnection or earnings, but the focus of this case is earnings.

Randy Lobb stated there are lots of issues associated with distributed generation but this case is just in the context of how they affect the revenues of the company if those sorts of things are implemented.

Commissioner Hansen asked if it is Staff’s position that including distributed generation in this proceeding takes away from what was in the Commission’s order.

Mr. Lobb replied that in his reading of the Commission’s order, it doesn’t talk about distributed generation, but it is in fact one of the programs that the company has that might affect their revenue streams. He said the Commission will consider that as well as DSM programs and what might need to be done to eliminate any disincentives from any program that reduces revenues that the company can generate.

Commissioner Hansen said he believes that in its order the Commission recognized there are opportunities that existed for the company to look at different efficiencies that would benefit the stockholder as well as the ratepayer, and he recalled discussions a couple years ago when Idaho Power came before the Commission and wanted a certain agreement where if the earnings were above a certain rate they shared that with the customer, and that is what led us to this discussion. He said if we start expanding it and especially put in something with the magnitude of distributed generation it will take away from what we are trying to accomplish. He stated he didn’t have a problem if we want to open a proceeding and if Northwest Energy Coalition wants to pursue this particular topic, but he didn’t think it is going to help us move quickly and efficiently in trying to come up with what we put in our order and hope to accomplish, and that is why he is opposed to putting it in.

Commissioner Kjellander proposed that the Commission table the matter to another time. He stated he needed more time to re-read the last order because there are two different pieces—the lost revenue issue and some performance-based incentive—and there seemed to be a mismatch as to how those two fit together. He stated he wanted to take a little more time to delve into this issue so he knows exactly what it is we are trying to tee up, and so we don’t end up with confusion when we finally move this issue forward. He made a motion to table the matter.

There was no further discussion. A vote was taken on the motion and it carried unanimously.

Commissioner Kjellander stated the only other item on the agenda was under FULLY SUBMITTED MATTERS and the Commission would deliberate on that privately. With no further business before the Commission, he adjourned the meeting.

DATED this ______ day of July, 2004.

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COMMISSION SECRETARY