HomeMy WebLinkAbout20090615min.docIDAHO PUBLIC UTILITIES COMMISSION
MINUTES OF DECISION MEETING
June 15, 2009 – 1:30 P.M.
In attendance were Commissioners Jim Kempton, Marsha Smith and Mack Redford.
Commissioner Kempton called the meeting to order. The first order of business was approval of MINUTES FROM PREVIOUS MEETING on June 1, 2009. Commissioner Smith noted one correction. A vote was taken to approve the minutes as corrected.
The second order of business was approval of the CONSENT AGENDA. Commissioner Kempton announced that items 2, 3, 4, 7 and 8 would be considered together. The Commission voted unanimously to approve these items.
Regarding item 5, the Commission voted unanimously to grant the Motion authorizing Yvonne R. Hogle to represent Rocky Mountain Power in Case No. PAC-E-08-08 and also voted unanimously to excuse the attendance of the sponsoring attorney, John R. Hammond.
Regarding item 6, the Commission voted unanimously to grant the Motion authorizing Michael G. Andrea to represent Avista Corporation in Case No. AVU-E-09-04 and also voted unanimously to excuse the attendance of the sponsoring attorney, Joseph N. Pirtle.
The next order of business was MATTERS IN PROGRESS:
9. David Hattaway’s June 11, 2009 Decision Memorandum re: Applewood Objection to Its Annual Utility Assessment Fee, Case No. APL-T-09-01.
Mr. Hattaway reviewed his Decision Memo. Commissioner Smith stated she had a hard time being hard-nosed about the dates because our process was delayed by the Legislature’s late adjournment. She questioned how Applewood could have made such a big mistake in its revenue calculation and she asked what it had reported last year for revenue. She suggested that if the corrected amount is in line with what was reported last year then the Company should just send the $50 and be done with it.
Commissioner Kempton confirmed with Deputy Attorney General Howell that there were no statutory concerns that would prohibit the Commission from acquiescing to this change and moving on. He then made a motion to accept the arrangement negotiated between Staff and Applewood on the payment of the fee. A vote was taken and it carried unanimously.
10. Kristine Sasser’s June 8, 2009 Decision Memorandum re: Capitol Water’s Application to Establish a New Tariff Rate to Recover Its Power Costs, Case No. CAP-W-09-01.
Ms. Sasser reviewed her Decision Memo. Commissioner Kempton asked about the length of the suspension for the proposed effective date. Ms. Sasser clarified that the goal is to have the final order issued by August 1st. Commissioner Smith asked if it could be approved with an effective date of July 1st, making it subject to refund or true-up. Mr. Lobb replied that the company made a similar request in its last case and Staff was concerned about several factors, i.e. whether it should be an annual filing, if there should be a balancing account, type of rate increase, and interest charges. He said Staff would not be opposed to an effective date of July 1st but Staff would want to look at the issues to see if it is an appropriate mechanism, how it might work, and whether other utilities should be allowed to track power costs on an annual basis. Commissioner Smith noted small water companies frequently struggle with cash flow issues. Mr. Lobb agreed and said Staff is sympathetic to the small companies that are faced with higher power costs.
The Commission voted unanimously to process the case by Modified Procedure and to conduct a public workshop. Commissioner Smith made a motion to approve Capitol Water’s proposed increase effective July 1, 2009, subject to refund and/or true-up depending upon comments and Staff analysis. She suggested that if Staff wants to take more time to delve into the issues, it can let the Commission know. She said the filing date for the comments can be adjusted accordingly, depending on how far in depth the Staff wants to go and whether it wants to look at just Capitol Water or extend it to a broader policy issue. A vote was taken on the motion and it carried unanimously.
11. Scott Woodbury’s June 11, 2009 Decision Memorandum re: Joint Motion to Stay Proceedings, Case No. IPC-E-09-03 (Idaho Power).
Mr. Woodbury reviewed his Decision Memo. Commissioner Kempton asked Idaho Power if it would like to address the Commission. Lisa Nordstrom, counsel for Idaho Power, spoke on behalf of the Company and reiterated the points filed in the Company’s Answer to the Intervenor’s Motion. She stated that delays beyond September 1st could cost the Company up to $25.5 million in lost deposits and cancellation fees and could jeopardize financing and permitting. She said the Motion has real and substantive impacts on Idaho Power and any decision must be made on substantial and competent evidence on the record, and because it has not yet received that evidence from the Intervenors, the Commission should dismiss the Motion to Stay and reaffirm the April 20th Procedural Order; or in the alternative, if the Commission feels it would be beneficial to have an Oral Argument on the Motion to Stay, the Commission should still require the parties to file testimony on schedule and set arguments for the first morning of hearing. She said such an approach would increase the likelihood that the Commission will have sufficient evidence to make a decision.
Commissioner Kempton invited Peter Richardson, counsel for the Intervenors, to address the Commission. Mr. Richardson stated that the Intervenors are not asking the Commission to deny a CPCN for Langley Gulch, but are asking for some time in order to make a more reasoned and informed decision as to whether or not the project is prudent and in the ratepayers’ best interests. He reiterated the points in their Motion, emphasizing the events that will take place after September 1st that will have a major impact on whether or not the project is prudent, including the completion of Idaho Power’s Integrated Resource Plan (IRP). He said the IRP should instruct in a large way the prudency of building what is Idaho Power’s most expensive single investment since the construction of Hell’s Canyon Dam. He stated this is not a CPCN that should be entered into lightly, particularly since the Company is using the new tool of regulatory preapproval. He said if the Commission accepts Idaho Power’s application, it will not be subject to prudency review ever again, so we need to look more carefully at a CPCN application because the regulatory safety valve is no longer there. He said the whole process of a CPCN is so that the Commission can review the major financial commitments before they are made, but Idaho Power put the Commission in a box because it committed to purchase the turbines before it received a CPCN from the Commission. Mr. Richardson recommended a delay in the procedural schedule of five days to allow time for the Intervenors to file a reply by the end of the week and be ready for an oral argument the following week. He said with so many blind spots surrounding this case and in order for the Commission to make an informed decision, it needs to have a formal answer from the Intervenors, conduct an oral argument, and then make a decision before it proceeds down the path to a CPCN on September 1st.
Commissioner Smith responded that all of Mr. Richardson’s arguments apply to the main issue of the case, which is whether or not the Commission should issue a Certificate. She said it might be helpful to have the parties’ testimony in front of the Commission and argue this either on the first day of the hearing or at some earlier time.
Mr. Richardson replied that their reason for asking for the delay is because they will know the answers to some of the critical questions at the end of the year. He said the Industrial Customers right now aren’t taking a position on the prudency or need for the plant but believe they are “shooting in the dark” until they see the Company’s shareholder-mandated greenhouse gas plans, which won’t be out until September, the Company’s revised load forecast due later this year, the Company’s IRP, and the magnitude and level of the irrigation-class participation in the new irrigation peak shaving program, which is anticipated by the irrigators to far exceed expectations. He said on the first day of the hearing they won’t have the answers to these questions, so a delay is the prudent course of action and when the Intervenors do present evidence early next year, they will know the answers.
Commissioner Smith asked Mr. Richardson if his clients are willing to “go dark” in 2012 if there isn’t enough power. She said we can’t afford to be wrong and not have enough power, and if there is not transmission to import the power that is needed, it has to be generated here. She said she understands the desire for more certainty but the risk of being wrong also weighs heavily. She said she wants more information, too, which is why the Commission wants the Intervenors’ filing before deciding it won’t hear the case until next year.
Mr. Richardson replied that he appreciates the awesome responsibility resting in the PUC’s hands but their view of Idaho Power’s resource stack and load forecast is such that the chances of “going dark” in the summer of 2012 are very slim, particularly since Idaho Power has already publically announced it is delaying the online date for Langley Gulch to December 2012.
Commissioner Redford commented that having been on the industrial and construction side of the issues, he finds the Motion troubling from the standpoint that delay will require Idaho Power to expend additional funds. He said it generally isn’t simple for a company to renegotiate, there is usually a restocking charge, and the price for the item could grow exponentially and have a great impact on the Company’s costs. He said the Company’s credit arrangement could also be in jeopardy if the case is delayed and the lenders or bond holders might renegotiate a more onerous loan. He reminded the Intervenors that they have had quite a bit of time to bring the issues before the Commission and it seemed unfair to Idaho Power to delay the case in the eleventh hour. He said he is concerned that the overall harm of delaying outweighs the benefit when we are going to have a full hearing anyway.
Mr. Richardson suggested sharing the costs of terminating the contracts between the ratepayers and the Company, if that’s what has to happen, even though it is a problem of the Company’s making. He said all the parties in the case have been taken by surprise by the rapid turn of events in the economy and financial markets and the impact of those events on the Company’s load and subsequent uncertainly in terms of load forecast. He said from the Industrial Customers’ standpoint, they are not concerned about Idaho Power “going dark” in 2012 but they are concerned about increased costs to the company because of delay and they are willing to share those costs.
Commissioner Redford responded that having ratepayers share in the costs of a plant that isn’t constructed or that was stopped during construction isn’t quite that simple. He asked Mr. Richardson if it would be possible for the Intervenors to obtain the type of information they want before the hearing date. He said the Commission ought to be able to make a determination based on the testimony of all the parties as to whether or not this is a prudent investment by the Company.
Mr. Richardson replied there are a bundle of things they won’t know until later in the year, as they have pointed out in their Motion.
Commissioner Redford commented that we do a lot of estimating in this business and between the parties, they ought to be able to investigate and discuss preliminarily what the IRP will be and the results of DSM programs so that they can work off of estimates, knowing we have the authority to true them up later.
Ms. Nordstrom of Idaho Power said she didn’t have anything further to add and the Company’s response addressed some of the particular concerns Mr. Richardson raised. She said she understands the need for perfect knowledge, and the company has been updating its forecasts all along and has accounted for the fact it has seen increased participation in the new DSM programs. She said the company is integrating information as it becomes available and makes decisions going forward as part of its energy risk management policy and standards. She added that these things can be flushed out further at the hearing.
Commissioner Kempton commented that the unanimity among the Intervenors in identifying the issues has sent up a warning flag. He said the best way to move forward is to have a defined schedule and expected inputs within a timeframe so there won’t be any unnecessary or unintended lapses in defining the issues surrounding the case. He said Staff and Intervenor testimony was due at the end of the week and he couldn’t see breaking off that process at this point, and he wouldn’t support approval of a stay because it contravenes what we are trying to do, which is to move forward to answers that are out there. He said some of the answers will be provided in the future beyond the time we have the hearing, but even at the hearing we can have some better information so that at least the parameters that surround those future events can be examined.
Commissioner Smith moved that the Commission defer ruling on the Motion for a ten-month stay and invite the Movants to renew their motion on July 14th, the first day of the hearing, or at any time during or after the hearing, if they believe the evidence supporting the Certificate is not substantial or convincing. She added that it is very important that the projected load forecasts are updated to include the most current conditions possible. A vote was taken on the motion and it carried unanimously.
Based on an inquiry from CAPAI, Mr. Woodbury asked if the Commission would consider scheduling a public comment period or public hearing in this case. Commissioner Kempton said the Commission would take that request under consideration.
Commissioner Kempton announced that the remaining items under FULLY SUBMITTED MATTERS would be deliberated privately.
There was no further business before the Commission and Commissioner Kempton adjourned the meeting.
DATED this ______ day of June, 2009.
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COMMISSION SECRETARY
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