20050801min.doc

IDAHO PUBLIC UTILITIES COMMISSION

MINUTES OF DECISION MEETING

AUGUST 1, 2005 – 1:30 P.M.

In attendance were Commissioners Paul Kjellander and Marsha Smith. Commissioner Hansen was absent and excused.

Commissioner Kjellander called the meeting to order. The first order of business was approval of the CONSENT AGENDA, items 1 and 2. There was no discussion and Commissioner Kjellander made a motion to approve the Consent Agenda. A vote was taken on the motion and it carried unanimously.

Commissioner Kjellander noted that item 5 was fully submitted and would be considered under the heading of FULLY SUBMITTED MATTERS.

The next order of business was MATTERS IN PROGRESS:

Discussion re: Eagle Water Company, Customer Complaints Regarding Water Pressure Issues. [Don Howell, Attorney, No Memo.]

Mr. Howell reviewed the complaints regarding low water pressure the Commission has received in the last 30 days from customers in one 50-lot area of Eagle Springs subdivision. He said data from a measuring device installed at the request of Commission staff revealed that water pressure had dropped below DEQ’s service standard on a number of days, and DEQ would be issuing notices of violation. Mr. Howell said staff recommends the Commission issue an emergency order directing Eagle Water to immediately come into compliance with the DEQ water pressure regulations and undertake actions to improve its system to correct the low pressure. Mr. Howell stated that staff also recommends an engineering report be completed for Eagle Water’s entire system, and as an interim measure, staff recommends that Eagle Water file an application for an emergency surcharge in order to recover the immediate costs of coming into compliance and to recover the costs of completing the engineering report. Mr. Howell said staff also recommends that the Commission, in collaboration with DEQ, issue post cards to all the customers in the subdivision urging the use of alternate day sprinkling.

Commissioner Kjellander asked if this is the same subdivision that experienced water pressure problems in the past several years. Mr. Howell confirmed that it is the same subdivision and the problem this time is occurring with 50 lots located at the highest elevation in the subdivision. He explained that last year a nearby gravel company had undermined a 12-inch main line supplying a booster pump serving the entire subdivision, so the company had to temporarily install an 8-inch line with the intention to go back to a 12-inch line when gravel operations are no longer a factor. He said that the company is now able to replace the 8-inch line with a 12-inch line and is hopeful that will correct the pressure problem.

Commissioner Smith asked what happened to the rate case the company was supposed to file. Mr. Howell replied that the company had filed last November but withdrew the filing. Commissioner Smith said she was concerned that the Commission is being put in the position of waiting for the next crisis with this company. Mr. Howell replied that by ordering the company to prepare an engineering report, staff will find out what the problems are for the entire service area.

Regarding the rate case filing by Eagle Water Company, Mr. Lobb elaborated that staff had identified serious problems with the filing, brought those concerns to the attention of the company and suggested the company might want to re-file, but the company has not done so. He said historically the company has been under capitalized and there are some urgent needs for the water system, but the company has had problems getting the capital to make the changes. He said he didn’t think a rate case would provide the immediate capital necessary to make those changes but a surcharge might help raise the capital. He stated the engineering study will help identify the needed improvements so the company can then make an application for a surcharge to get the capital to make the improvements.

Commissioner Kjellander asked what the amount of the emergency surcharge might be. Mr. Lobb replied it would be a two-step application process, where the first application would be filed to recover costs of the immediate needs and cost of the system analysis to determine the longer term needs. He said the second application for a surcharge would be for a larger amount and would perhaps seek to recover costs associated with new wells and new storage. He noted Eagle Water’s rates are currently about a third of what United Water charges.

Commissioner Kjellander made a motion to issue an order in response to the emergency outlined by Mr. Howell, requiring the company to come into compliance with DEQ requirements regarding the low pressure issue, and directing the company to conduct an engineering report and file for an emergency surcharge. There was no further discussion. A vote was taken on the motion and it carried unanimously.

Kira Dale Pfisterer’s July 29, 2005 Decision Memorandum re: Joint Application of Idaho Falls Power and PacifiCorp to Approve an Electric Consumer Allocation Agreement, Case No. PAC-E-05-7.

Ms. Pfisterer reviewed her Decision Memo. Commissioner Smith moved that the Commission approve the motion for an extension of time in this case. 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 those would be deliberated privately. He then adjourned the meeting.

DATED this _____ day of August, 2005.

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COMMISSION SECRETARY

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