HomeMy WebLinkAbout20050124min.docIDAHO PUBLIC UTILITIES COMMISSION
MINUTES OF DECISION MEETING
JANUARY 24, 2005 – 1:30 P.M.
In attendance were Commissioners Paul Kjellander, Marsha Smith and Dennis Hansen.
The first order of business was approval of the CONSENT AGENDA, items 1—6. There were no questions or discussion. 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:
Don Howell’s January 21, 2005 Decision Memorandum re: Avista’s Application to Include Its Recent Purchase of Coyote Springs 2 from Mirant in Idaho Rate Base, Case No. AVU-E-05-1.
Mr. Howell reviewed his Decision Memo. Commissioner Hansen asked when the next PCA comes up for review and the public is asked to comment, if that would provide an opportunity for public participation. Mr. Lobb replied that the balance would not change as quickly and the payment would be over a longer period of time, so we would look at what the balance is at the next PCA period and the rate would be set accordingly for another year. He said the rate will depend on what the power supply costs are, what the balance is, and how it accrues over the next time period. Commissioner Hansen asked if this issue would be part of it and if it would be there for the public to examine at that time. Mr. Lobb said the effect can be measured but the balance will be higher than it otherwise would have been had the rate stayed the same for the year.
Commissioner Smith said it wasn’t clear to her whether or not Staff wants to do workshops. Mr. Howell replied that Staff didn’t see a need for workshops because there is no net change in the rate. He said there is an increase in the base rate but no net change.
Commissioner Hansen said he is concerned that a workshop will be confusing to the public, especially since we just finished a rate case with Avista. He said that since there isn’t going to be a change in rates, and confusion might be generated if we hold workshops, he was of the opinion that we not hold workshops.
Commissioner Kjellander stated that in looking at the rule for holding workshops, it is clearly permissive because of situations like this. He said that since there is no noticeable change to ratepayers, he agreed with Commissioner Hansen that we will ultimately create more confusion by holding workshops. Noting that the company had put out an informational bill stuffer and there is an extended comment period, Commissioner Kjellander made a motion to move forward with modified procedure without workshops but with an extended comment period as recommended by Staff. He said that if there is a call for workshops in the comments, we can always shift our direction. A vote was taken on the motion and it carried unanimously.
Donovan Walker’s January 21, 2005 Decision Memorandum re: PacifiCorp’s Application for Approval of Revisions to the Company’s Customer Guarantee Rule 25 and Schedule 300, Case No. PAC-E-04-7.
Mr. Walker reviewed his Decision Memo. Commissioner Hansen asked if the Commission had put out a press release in the local papers in southeastern Idaho so people could comment regarding this case. Mr. Walker replied that there was a press release but we did not receive any comments other than Staff’s comments.
Commissioner Smith made a motion to approve the changes as proposed by PacifiCorp with the amendments proposed by Staff. A vote was taken on the motion and it carried unanimously.
United Water/Terra Grande Water; Water Supply Issue; Status Report; Case No. TGW-W-04-1. [No Memo; Scott Woodbury and Donovan Walker, Attorneys.]
Mr. Woodbury reported that the Department of Environmental Quality had notified the Commission that the water supply for Terra Grande, a small water company regulated by the Commission, was contaminated with trichloroethylene, a hazardous substance used as a degreaser and solvent. He said Terra Grande had been required to notify its customers that the water was not to be used for drinking or cooking and only for limited use in bathing and showering. He said the company serves a residential subdivision with 110 connections and 400 total water users. He noted that the company has three wells—two into the shallow aquifer and one into the deep aquifer—and all three wells have shown contaminated levels. He said the standard for trichloroethylene is five parts per billion, and the most recent samples had tested from 69 to 96 parts per billion. Mr. Woodbury stated that DEQ estimated treatment costs to be approximately $250,000. He noted the source of the contamination has not been located and the size of the plume has not been determined. He said DEQ recommends interconnection with United Water because of the safety and health issues, and the owner of Terra Grande has agreed to the interconnection. Mr. Woodbury said Terra Grande will be served through a single meter and billed at the standard United Water rate, and Terra Grande customers will be billed a proportionate share of United Water’s bill, making Terra Grande a distribution company.
He said DEQ had sent the Commissioners a letter requesting cooperation in facilitating a new source of water for Terra Grande customers.
Commissioner Hansen asked about the funds DEQ has available and what would happen if DEQ doesn’t find the person(s) responsible for contaminating the water supply—i.e. would the water companies or ratepayers be held liable if they can’t find the person(s) responsible.
Darryl Early, Deputy Attorney General for DEQ, replied that DEQ will not seek reimbursement from the public water company because to their knowledge it was not the company’s fault that the system became contaminated. He said DEQ will continue to look for the responsible party for reimbursement.
Commissioner Kjellander asked what the typical sources are for trichloroethylene contamination. Mr. Early replied that it is a common solvent used in metal degreasing by machine shops and auto body shops. He said until they know more about it and the size of the plume, it will be difficult to determine where the source is coming from. He said it could be coming from a mechanic dumping solvent down a septic system or something much larger.
Commissioner Kjellander asked if there are any other wells nearby that could be at risk as well. Mr. Early replied that there are two wells owned by United Water in that vicinity that supply public drinking water for summer usage. He said United Water has been advised to look into the quality of the water in those wells. He said there are also a number of private use wells in the area but DEQ has no jurisdiction over those wells. He stated they are advising Central District Health and private water well owners to get sampling information from their wells.
Commissioner Smith asked if Staff has performed a financial audit of Terra Grande and done any analysis as to the reasonableness of the rates in place during the recent process of certificating the company. Mr. Woodbury replied that some recent audit and production requests have been made and the audit is in progress. Commissioner Smith stated she is concerned that customers might end up paying twice for the same thing, because of the additional cost of the water that will now have to be purchased from United Water. She noted there ought to be some cost savings from the fact they are not operating their wells, there might be savings in testing expenses, and there might be other savings as well. She asked if we know what the wholesale rate will be. Mr. Woodbury replied that there is no wholesale rate and they will be billed at the retail rate. Mr. Lobb explained there is no wholesale tariff in effect today. Commissioner Smith asked how a wholesale rate will be established. Mr. Lobb replied that Staff will most likely propose a retail rate, serving Terra Grande as if it were a customer by installing a meter, with a purchase agreement between the companies.
Commissioner Kjellander asked for clarification as to what the Commission is being asked to do. Mr. Woodbury replied that because of the health and safety issues, the companies just wanted some assurance that the Commission would support the interconnection.
Commissioner Kjellander made a motion to support the interconnection between Terra Grande and United Water because there is a clear health and public safety issue and there will be no financial risk to United Water’s customers. He noted that anything the Commission can do to facilitate the interconnection is in order. Commissioner Smith stated she could support the motion, knowing the Staff audit of Terra Grande is in progress and the issue of what fair, just and reasonable rates are will be sorted out fairly quickly. A vote was taken on the motion and it carried unanimously.
Scott Woodbury’s January 19, 2005 Decision Memorandum re: Application to Amend Certificate, Case No. BCS-W-04-1 (Bar Circle).
Mr. Woodbury reviewed his Decision Memo. There were no questions or comments. Commissioner Kjellander made a motion to move forward with Staff’s recommendations. A vote was taken on the motion and it carried unanimously.
Scott Woodbury’s January 20, 2005 Decision Memorandum re: BPA Regional Exchange Credit Reduction, Case No. PAC-E-04-6.
Mr. Woodbury reviewed his Decision Memo. Commissioner Kjellander asked if there is any indication from PacifiCorp that we might be able to better manage our way through this instead of having to continually return to this process and create more confusion for all parties involved. Mr. Lobb stated he didn’t think it would be any more accurate than it has been in the past, primarily because the rate is set based on an estimate on an assumed annual kilowatt hour under normal weather conditions, and if we don’t have normal weather conditions, the company will pay out more than it expected to pay out, which is what happened in this case. He said it could also happen next year, even though the company has increased the kilowatt hours from what it used in the past to calculate the rate for both residential and irrigation customers. Mr. Lobb stated it should be more reflective of what we might get next year, but it is on a weather-normalized basis with 2004 customer levels and will be applied to 2005 customer levels and whatever consumption actually occurs. He noted that the whole point of a balancing account is to take into consideration these sorts of effects, and there will be a true-up at the end of the period because there is no way to get it exactly right, but hopefully there will be a surplus at the end of the period rather than a deficit. He said interim true-ups might help, but right now none are scheduled or proposed.
Commissioner Hansen made a motion to approve the PacifiCorp’s application with the effective date of January 31st, 2005. He also suggested that when the company sees an imbalance like this, it should be trued up on an annual basis. He said he didn’t see any value in letting it stretch out to three years, necessitating a bigger adjustment. He stated he wanted to send a message to PacifiCorp to keep on top of this on an annual basis. A vote was taken on the motion and it carried unanimously.
There was no further business before the Commission and Commissioner Kjellander adjourned the meeting.
DATED this ______ day of January, 2005.
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COMMISSION SECRETARY
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