HomeMy WebLinkAbout20070917min.docIDAHO PUBLIC UTILITIES COMMISSION
MINUTES OF DECISION MEETING
SEPTEMBER 17, 2007 – 1:30 P.M.
In attendance were Commissioners Paul Kjellander, Mack Redford and Marsha Smith.
Commissioner Kjellander called the meeting to order. The first order of business was approval of MINUTES FROM PREVIOUS MEETINGS on August 27th and September 10th, 2007. Commissioner Kjellander moved for approval of the minutes. A vote was taken on the motion and it carried unanimously.
The second order of business was approval of the CONSENT AGENDA. Commissioner Kjellander stated it was the Commission’s preference to move items 5 and 6 to FULLY SUBMITTED MATTERS. He made a motion to approve the remaining Consent Agenda items 2, 3, 4, 7 and 8. There was no discussion. A vote was taken on the motion and it carried unanimously.
The next order of business was MATTERS IN PROGRESS:
M. Parker/B. Barker’s September 14, 2007 Decision Memorandum re: Formal Complaint Filed by South Elmore Irrigation District.
Ms. Barker reviewed the Decision Memo. Commissioner Kjellander moved to issue a Summons to Idaho Power directing the company to respond to the Complaint. A vote was taken on the motion and it carried unanimously.
Scott Woodbury’s September 14, 2007 Decision Memorandum re: Motion to Vacate Hearing (Scheduling) – City of Eagle, Case No. UWI-W-07-02 (United Water) – Lanewood Estates.
Mr. Woodbury reviewed his Decision Memo. Commissioner Smith made a motion to adopt September 19th as a deadline for filing full replies to the City’s motion and to hear oral arguments at the time already set aside for the hearing on September 24th. She said based on the decision regarding the motion and oral argument, the hearing could be either held as scheduled or rescheduled. She added that testimony would not need to be filed on September 17th (the current date). There was no further discussion. A vote was taken on the motion and it carried unanimously.
Scott Woodbury’s September 14, 2007 Decision Memorandum re: Wind Integration Adjustment, RNP/NWC Motion to Vacate Comment Deadlines, Case Nos. IPC-E-07-03 (Idaho Power); PAC-E-07-07 (PacifiCorp); AVU-E-07-02 (Avista).
Mr. Woodbury reviewed his Decision Memo. Commissioner Smith commented that the Commission had already had plenty of time on this case and had conducted workshops. She said she was willing to move the comment deadline to October 5th and set the reply deadline for the appropriate number of days after that. She emphasized the Commission should avoid further delay.
Commissioner Kjellander asked if a deadline of October 5th would give adequate time in the event of a settlement. Commissioner Smith responded that if there is a settlement then that is what should be filed and if they don’t have a settlement then they should file their comments.
Commissioner Redford moved that Commissioner Smith’s suggestion be put into a motion.
Commissioner Kjellander agreed with Commissioner Smith’s comments and stated it was time for the Commission to get moving. He said he hoped settlement discussions were fruitful so we can bring closure to this issue. A vote was taken on the motion and it carried unanimously.
Terri Carlock’s September 14, 2007 Decision Memorandum re: Application of Eagle Water Company for Authority to Borrow Funds, Case No. EAG-W-07-01.
Ms. Carlock reviewed her Decision Memo. Commissioner Kjellander clarified that the surcharge Ms. Carlock was referencing was the one already in place. Ms. Carlock confirmed it is an existing surcharge being collected on usage of over 600 cubic feet.
Commissioner Smith asked Ms. Carlock to outline what would happen to the loan under two different scenarios: (1) the sale to the City of Eagle is completed, and (2) the sale does not happen. Ms. Carlock replied that if the sale goes through, then the loan would be paid off at the time the sale is completed with the sale proceeds. She said if the sale is not completed, the loan would be paid off from surcharge monies over the term of the loan or repaid by the company if it is ultimately determined that some of the charges are non-recoverable from the customers. Commissioner Smith clarified the amount of the loan would be $110,000 over two years at 10.25% interest. Ms. Carlock confirmed that with 3500 customers it would be a 42% surcharge, which is consistent with what the company is now collecting.
Commissioner Redford commented that the scenario gets more complicated as we go along and a surcharge is intended to be a temporary charge. He asked if Ms. Carlock had an update on the sale. Ms. Carlock said the company has filed the sale documents. Don Howell added that the parties to the sale were currently in the due diligence process and contemplate the transaction will be completed in November of this year. Commissioner Redford asked if the loan was a bridge loan for Eagle Water to get out from under some pressing obligations and if the truing up could be included in rate base. Mr. Howell replied that the Commission will reserve the right to examine whether the professional fees were reasonable and prudent. Commissioner Redford said it seemed everyone was betting on the sale going through and in the final analysis, it is the ratepayers who are being assessed the surcharge. He said given the history of where the Commission has been with Eagle Water, he questioned the company’s financial condition and if the company can retire the debt with interest over two years. Ms. Carlock replied the company can retire the debt, interest and principal, using the surcharge monies, if the sale does not go through. Commissioner Redford said it sounded like everyone is presuming there won’t be a need to refund any of the surcharge, but if the Commission determines at a later date that the surcharge is not reasonable, then Eagle Water will be required to reimburse the ratepayers. Ms. Carlock said the company recognizes this loan is for cash flow purposes to help them meet their requirements and if the Commission decides it is not appropriate for the customers to pay, the company would be required to repay the loan from its own funds. Commissioner Redford confirmed that the loan is considered an operating loan and he asked if the company is able to cash flow without a loan. Ms. Carlock replied that the company has cash-flowed the improvements but feels it needs assistance from a loan.
Commissioner Smith asked why the company can’t just wait two more months. Ms. Carlock responded that the company could if it had to but it has used all the funds for improvements and needs this loan for operating purposes to pay the bills for the professional fees—attorneys, engineering costs, and accountant.
Commissioner Redford said it seems to him that the difficulties Eagle Water is having go back to the inordinate amount of time it took to complete the engineering report and notwithstanding the excuses, the company now wants to continue the surcharge to pay for everything. He said at some point in time the company has to take some responsibility, and based on what the company has done in the past, he expressed his concern the company will ask for more time to complete the sale and for another extension of the surcharge.
Commissioner Kjellander said that he didn’t disagree with Commissioner Redford, but in the short term, the Commission still regulates the company and to the extent Staff has done due diligence to make sure the protections are there, he was willing to support Staff’s recommendation because the Commission has the ability to make adjustments to this decision based on what audits may suggest. He made a motion to support Staff’s recommendations, fully recognizing Commissioner Redford’s comments are well on point. A vote was taken on the motion and it passed two to one, with Commissioner Redford opposed.
Commissioner Kjellander stated the remaining agenda items 5 and 6, which had previously been moved under the category of FULLY SUBMITTED MATTERS, would be deliberated privately. There was no further business before the Commission and the meeting was adjourned.
DATED this ______ day of September, 2007.
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COMMISSION SECRETARY
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