20040326Public Hearing Jerome.pdf

ORIGINAL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO INCREASE ITS INTERIM AND BASE
RATES AND CHARGES FOR ELECTRIC
SERVI CE .
) CASE NO. IPC-O3 -
BEFORE
COMMISSIONER MARSHA SMITH (Presiding)
COMMISSIONER PAUL KJELLANDER
COMMISSIONER DENNIS HANSEN
PLACE:Sawtooth Inn Best Western
2653 South Lincoln
Jerome, Idaho
DATE:March 15, 2004
VOLUME II - Pages 163 - 301
CSB, REpORTING
Constance S. Bucy, CSR No. 187
17688 Allendale Road * Wilder, Idaho 83676
[phone] *[phone]
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For the Staff:Lisa Nordstrom, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83720-0074
For Idaho Power Company:Monica B. Moen, Esq.
Idaho Power Company
Post Office Box 70Boise, Idaho 83707-0070
CSB REPORTING
Wi 1 de r , Idaho 8 3 6 7 6
APPEARANCES
WITNESS EXAMINATION BY PAGE
Xenia Williams
(Publ ic)
Statement
Ms. Nordstrom (Cross)
Commlssioner Hansen
165
168
169
Scott Stevenson
(Public)Statement
Commissloner Hansen
Commissloner Kj ellander
170
175
176
Bruce Brown
(Public)Statement
Commlssioner Hansen
177
180
Laurence Smi
(Public)Statement 182
John 0 I Connor
(Publ ic)
Statement
Commissloner Kj ellander 187
192
Oleta Bybee
(Publ ic)
Statement 194
Al ton Huyser
(Public)Statement
Commlssioner Hansen
197
200
Mary Sil vaz
(Public)Statement
Commlssioner Hansen
201
203
Harold Huyser
(Publ ic)
Statement 205
Russell Patterson
(Public)Statement 207
Jared Grover
(Public)
Ken Robinette
(Public)
Darlene Wilcox
(Public)
Statement 210
Statement
Commlssioner Kj ellander
Commissloner Smith
212
217
218
Statement
Ms. Nordstrom (Cross)
Commissioner Smith
219
222
223
CSB REPORTING
Wilder , Idaho 83676 INDEX
(Continued)
WITNESS EXAMINATION BY PAGE
Alecia Tellez Statement 225
(Publ ic)
Michael Larson Statement 232
(Publ ic)Commissloner Hansen 236CommlssionerKj ellander 236CommlssionerHansen238
Rocky Trail Statement 240(Public)Commissloner Hansen 245
Matt Hitchcock Statement 247(Public)Ms.Nordstrom (Cross)250
Mike Cranney Statement 251
(Publ ic)
Robert Lipskoch Statement 257(Public)Commlssioner Kj ellander 259
Jesus Torres Statement 260(Public)
Steve Marshall Statement 266(Public)
Mike Telford Statement 270(Public)
Lynn Bailey Statement 276(Public)Ms.Nordstrom (Cross)280
Gerald Tews Statement 281(Public)
Kristy Webb Statement 284
(Publ ic)Commissloner Smi th 286CommisslonerKj ellander 287CommisslonerHansen289
Jerry Callen Statement 290
(Publ ic)
CSB REPORTING
Wilder, Idaho INDEX83676
JEROME , IDAHO, MONDAY , MARCH 15,2004 6:30 P. M.
COMMISSIONER SMITH:Ladies and gentlemen
this is the time and place set for a hearing in Idaho
Public Utilities Commission Case No. IPC-03-13.It'
further identified as in the matter of the application of
Idaho Power Company for authority to increase its interim
and base rates and charges for electric service.
AUDIENCE:Could you use the microphone?
COMMISSIONER SMITH:Well , either they
didn't give me one , which I think might be a problem
this is the microphone and there I s only one, so you I re
going to have to help out tonight by being very still
when I I m talking, I guess, because I'm going to be back
there.As I said , this is a case before the Idaho Public
Utilities Commission.There are three Commissioners in
your state and we are all here tonight.This is Paul
Kj ellander.He is president of the Commission, Dennis
Hansen , a Commissioner , and I'm Marsha Smith and I'm the
Chair of tonight I s hearing.
When we have a rate case like this, we
have several days , in fact, we have two weeks scheduled
of technical hearings in our Hearing Room in Boise where
we listen to the accountants , the engineers , the rate
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163 COLLOQUY83676
analysts and lots of lawyers argue over stuff , but part
of our decision-making process is to come out and hear
from the people and that's what we're doing today.
had a hearing earlier today in Pocatello , having one here
tonight in Jerome , and then we'll have one in McCall and
Payette and finally, one in Boise, and all of this will
end , hopefully, May 15th when we issue our order deciding
this case finally.
The process of tonight is you ve signed
up.I f you wish to make a statement , you'll come forward
to this table.Commissioner Kj ellander will ask you
raise your right hand and promise to tell the truth and
then the Staff attorney Lisa Nordstrom will ask you a
couple of questions namely, your name, how to spell your
last name, and your mailing address.
The Commission orders have to be based on
evidence that it receives in the hearing process.That'
why we have a court reporter here tonight.She will take
down your statements verbatim and because our decisions
can be appealed directly to the Idaho Supreme Court , it'
important that we get everything accurate.That's why we
have to have your name and your mailing address for the
record.
I guess if there are no other
preliminaries, I'll just go back to my chair and try and
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164 COLLOQUY83676
shout out your names as you signed up so you can hear.
If you do at any point have trouble hearing, just raise
your hand and I'll try to make fix whatever is going
wrong so we can hear.Because we have the court reporter
and we have to have every speaker identified, it is not
appropriate or cool to shout out from the audience or to
applaud.In a lot of ways , the Commission sits just like
a district court as a trier of fact and so we appreciate
your cooperation in holding to that kind of decorum here
tonight, so without further ado, we'll call the first
name which is Xenia Williams.
XENIA WILLIAMS,
appearing as a public witness , having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name for the record.
I think I better spell my first name.
Please do.
X-e-i-a Williams.
And what is your mailing address?
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165 WILLIAMS
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98 North 100 West, Jerome.
Are you here tonight representing yourself
or another organization?
Me.
Okay, thank you.Please proceed.
COMMISSIONER SMITH:Just hold that as
close as you can.
THE WITNESS:Hold this?
COMMISSIONER SMITH:Right there, that'
good.
THE WITNESS:Got it.When I get a cost
of living increase, it's about one-and-a-half percent, so
Idaho Power is going to take away anything I'm ever going
to get on a cost of living increase which upsets me.
reading over this report that I got out in the hallway
there, Summary of Staff Testimony, David Schunke talks
about this proposed increase from 2.51 per month to
$10.00 for a meter charge.That is absolutely
outrageous.That little meter stays there all the time.
It doesn t cost more than $2.51 for them to look at it.
It doesn I t break , they don I t replace it.
I I ve been in this house for, oh , about 13
years and they have never replaced it since they put it
, so why should it go up to $10. OO?And then as to the
rate increase of 19 percent , that's totally unbelievable
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166 WILLIAMS
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in view of the fact they I ve been charging the people for
their meals , their liquor , their fees to join golf clubs,
et cetera.That upsets me tremendously so I hear that
you I re proposing possibly a three percent increase.
That I S better than 19-and-half percent , but I think
even three is a lot for some people to pay and I 1
including me in that list.
IDACORP is still getting rich.They'
still paying dividends, they're not hurting, and then on
my last subj ect, and this is one close to my heart, last
time I talked to you folks , I suggested that somebody
should get involved with wind power.Nobody did but me.
m on the wind power working group in Boise and I got an
mail from them just today, there are two bills in the
legislature up there that would provide investment tax
credit and production tax credit.The two bills are
HB - 76 0 and HB - 761 .If those bills could get approved, it
would increase the wind power tremendously which would
hopefully shorten the reliance on water power and coal
power.I really think sooner or later we have to come to
this.It I S a renewable energy source and it's being done
in all the other states, except for Idaho.
California has been doing it for over 20
some years successfully.We as a state are ranked 13th
for the amount of wind that we get.California, I
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167 WILLIAMS
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be 1 i eve , is 19.Oregon , Washington , Montana , Wyoming,
Colorado all have very much of their power from wind
power and I really think this state is going to have to
come to it , maybe not in my lifetime , but sooner or later
it's going to happen because it's renewable.That's all
ve got to say.
COMMISSIONER SMITH:Okay, let's see if
there are any questions.
CROSS-EXAMINATION
BY MS. NORDSTROM:
Yes you mentioned Dave Schunke'
testimony from the Commission Staff and I think that you
have said that Mr. Schunke and the Staff was recommending
an increase in the customer service charge to $10., is
that what you meant or was that the Company s proposal?
It was the Company's proposal, but he was
explaining how it would increase that little charge 50
percent on the bill.
Do you obj ect to Staff I s recommendation
ralse it to $3.00?
If I have to I'll bite the bullet, but I
think it should be less because I don't think Idaho Power
uses the money that we pay them in a wise and prudent
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168 WILLIAMS (X)
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fashion.In this day and age of tight money, I think
they could learn a lot.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:We al so have
representatives from the Company here now.Ms. Moen, did
you have any questions?
MS. MOEN:, not at this time.Thank
you.
COMMISSIONER SMITH:From the Commission.
Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Yes , I just have one question.If the
wind power, to generate wind power , was more expensive
than the current rate you're paying right now, would you
still be in favor of developing wind power to bring it on
even though right now it's more expensive than your
current rate?
I don't know where you got the more
expens i ve .
Well , if a kilowatt of wind power cost
more to generate than the current generation cost of a
kilowatt right now , would you be in favor of developing
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169 WILLIAMS (Com)Public83676
wind power?
No matter what I would be in favor of
developing wind power.It's a renewable resource and
water is getting tight in Idaho as you may have read in
the newspapers lately or heard the news.Sooner or later
we'll have to come to a renewable energy source.Why not
do it now , like all the other states?Why is Idaho
behind in doing this when it would solve so many of our
probl ems?
COMMISSIONER HANSEN:That's all the
questions.
COMMISSIONER SMITH:Thank you.Thank
you, Ms. Williams.
(The witness left the stand.
COMMISSIONER SMITH:Scott Stevenson.
SCOTT STEVENSON
appearing as a public witness , having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
How are you?
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170 STEVENSON
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Please state your name and spell your last
name.
My name is Scott Stevenson,
S -t -e-v-e-n- s -o-n.
What is your mailing address?
949 West 900 North , Paul , Idaho.
Are you here tonight representing yourself
or an organization?
m here representing myself.
Thank you.Please proceed.
What I did was I coming off the facts and
statistics that Idaho Power had on their websites, I took
my irrigation bills and I went through and in each month
I tried to plot in what would be the change and each one
of these, there are six meters, one of them is just a
pivot in which I see a dramatic change which they
categorize as a four horse.In that billing, the high
change is 466 percent of last year at that same month.
That comes from the conservation fund.I can I t
understand, as I went through my billings, some months we
had a .01 percent on conservation charge.If I take what
they I re saying they're going to do, those months would be
a $15.00 charge, so inconsistency there.I don I t
understand what the reason is.
If conservation charge is important now
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171 STEVENSON
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why wasn I t it important then last year?In that meter
$286 would be the difference, which doesn't seem to be
very much , except this is only a four horse meter.
just runs one pivot.The nextIt I S not a great demand.
meter which I have here is a 100 horse booster.Its high
would be approximately 332 percent difference and again
that's on the off demand months and the reason is because
of the conservation charge, but the high demand months
that it would be a 20 percent difference , not the rate
that they re talking about ,because of their added on
expenses that they have.
The next one is a 300 horse pump.
Depending on how they do the conservation charge , it
could be a 600 percent because of the way they billed it
out.On the on months , it's about a 16 to 22 percent
change.On its on demandAnother one is a 300 horse.
months, it I S a 22 percent change.On the one month that
we have data on , this is a place that I just rented , it'
a 600 percent change on an off demand month.Thi s other
one I have here is just a booster.It's a 50 horse
booster , that I s a 22.9 percent change in that one.
The next one I have is a 400 horse, it's a
deep well, comes to approximately 424 feet, the high on
it or the high on an off demand month is 132 percent.
The high on an on demand month is 22 percent.Now, as I
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172 STEVENSON
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take these and add them up, what I have is a $14 297
change in my budget basically in higher expenses in which
nothing has changed, nothing at all.I haven't changed
meters, I haven't changed pumps, I haven I t changed
anything.In reality, the poles were there when I took
on these farms and the poles are still there.
We have changed some meters when we tried
to work with Idaho Power in their programs, but we found
it somewhat counterproductive in our management
procedures, so we have elected not to do those anymore.
They're hitting an industry here that has a decline in
their income.Sugar last year came down approximately 20
percent, give or take a little bit depending on what your
quality was and your yields were, and I guess the only
thing I've got to say is this industry hasn I t got the
ability to pass it on anymore.
There's a farm right next to me that
would question whether he 'll farm this year because it is
so deep and these demands are going to be so high , who
wants to tie on to it.Now , as we continue to do this
with our industry, what you 'll see is that these
industries support the local economies.Where do we
bring our money?We bring it to town and we spend it, so
I would encourage the PUC to think about this a little
bit.Agriculture hasn I t grown very much in the last 10
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173 STEVENSON
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years as far as our hookups.I f you measure the hookup
part of it , it's just pivots, just a small demand.
Another issue I I d like to bring up is the
demand charge.On the demand charge, if Idaho Power
wants to conserve , they could get rid of that problem,
because if I come on in a month and I have to be on for
two days to finish out a crop, I have absolutely no
reason to probably conserve power the rest of the month
it hits me so hard , and then also an issue I'd like to
bring up has been an issue that I'm sure that we
complained to Idaho Power about and that's their dispatch
system out of Boise.We have an office in Burley.This
winter I got a phone call from one of the linemen , he
"Have you got a loader?"says I says,I do.He says,
"Can you open up a road for me?"I says,I can.
When I got there, I wasn't sure I was in
the right spot and it took me close to two hours to get
ahold of dispatch to find the lineman to try to find out
if I was in the right spot.I don't have any problem
helping out Idaho Power at all.I would do it for free
because these gentlemen are my friends , they make sure
that we get power , but this issue with having to call
Boise and their new dispatch system because I was on a
cell phone and I was underneath a power line, it would
not read my voice.That's the reason it took two hours
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174 STEVENSON
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to get through, so I think that issue needs to be
addressed.
COMMISSIONER SMITH:Okay, let's see if
there are questions.
MS. NORDSTROM:None from the Staff.
COMMI S S IONER SMI TH :Questions from the
Commission.Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Did I hear you correctly that you said
that Idaho Power I s conservation programs were
counterproducti ve, did I hear you correctly on that?
For me they are.They're a management
nightmare.For me to turn off a pump one day a week or
during a period of time, I have so many pumps, by the
time I start this process and finish this process, I
spend hal f a day doing it.If I were to take my time and
what it costs me to manage , it I s just counterproductive
for me to do that.
COMMISSIONER HANSEN:That was the other
question , in what way is it counterproductive and you'
answered that.
COMMI S S IONER SMI TH :Commissioner
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175 STEVENSON (Com)
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Kj ellander.
EXAMINATION
BY COMMISSIONER KJELLANDER:
In the calculations you've done , did you
use the current power cost adj ustment amount on a going
CSB REPORTING
Wilder , Idaho
forward basis or did you adjust that downward in any
I took last year s bill and then took the
Idaho Power data and projected it forward.
Okay so you kept the current PCA
way?
amount?
you.
Yes, I did.
COMMISSIONER KJELLANDER:Okay, thank
COMMISSIONER SMITH:Thank you very much
for your testimony.
THE WITNESS:Thank you for your time.
(The witness left the stand.
COMMISSIONER SMITH:Bruce Brown.
176 STEVENSON (Com)
Public83676
BRUCE BROWN,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Good evening.
Please state your name and spell your last
name.
Bruce Brown , B-r-o-w-
Your mailing address?
19243 Highway 30 , Buhl, Idaho.
Are you here tonight representing yourself
or another organization?
m here representing the board of
directors of Bell Rapids Irrigation.
Thank you.Please proceed.
First of all , thank you for the
opportuni ty to testify.Bell Rapids is an 18,500 acre
farming proj ect lifting water approximately 550 feet, I
better hold the mike , from the Snake River above
Hagerman.The proj ect has been in business for 34 years.
I I ve farmed up there for 22 of those 34.We have 28
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177 BROWN
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different owners, 16 different owner/operators and we
employ 150 people.
Each year we use 62 million kilowatts of
power , of which 39 million are used in one location , our
river station.The proj ect uses seven different crops
totaling $11.8 million.The expenses for these crops
fuel , fertilizer , repairs and supplies, are spent in the
communities of Buhl , Hagerman and Twin Falls.The No.
expense for the irrigation proj ect is power.The rate
increase from 3.4 per kilowatt in 1 99 to 4.9 in 2003,
this includes the demand charge, this figure correlates
to an acre foot cost increase from $42.70 in 1 99 to
$73.79 in 2003.
We use approximately two-and-a-half acre
feet on every acre as an average.Our power cost has
increased from $106 per acre in '99 to $184 per acre in
2003.This is an increase of 73-and-half percent and
comparing it to the other expenses, fertilizer, seed,
labor , fuel and power, the percentage of increase far
exceeds all the other expenses combined.
When looking at Idaho Power rate increase
request, we question some of those needs in their
documents , the airplane, the retirement accounts, the
defense of the parent company's alleged wrongdoing.
However , they did distribute the increase percentage
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across the board between 15 to 20 percent.The PUC Staff
in their evaluation cut the increase from 85 million down
to 15 million, but redistributed the cost percentages
giving zero percent to large industry and a high of 15
percent to the irrigators.
Irrigation use, kilowatt power, has stayed
constant for agriculture through the years.Micron and
residential use has skyrocketed causing the need for more
and higher-priced electricity in recent years.This
pricing borders on being predatory, pricing concerning
agriculture , and eliminate -- and will eliminate pumpers
that have been there for many years, long before the
expansions of homes in Idaho and businesses in the Boise
Valley.
My question is why can't new businesses
and industries pay a higher rate than the homes and
businesses that have been in business for a long time.
When we first put the project in , Idaho Power said that
they needed help to put dams in , to testify for them so
that we could irrigate the desert lands of Idaho.None
of the pumpers - - the pumping of Idaho have not caused
the increase in consumption.The people that have caused
it should pay for it.PUC should be one of the watch
dogs for Idaho's way of life.These power rates will
eliminate irrigation.It will hurt the businesses in
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179 BROWNPublic83676
rural communi ties.
Pumpers raise most of the sugar beets and
potato production in the State of Idaho.Bell Rapids is,
for example , one of the largest producers of sugar beets
in the Amalgamated Sugar Company, approximately 105,000
tons per year.To have a 73 percent increase in power
costs in four years will definitely cause pumpers to go
out of business and closure of small business in rural
towns.In closing, I would like to add why should
irrigators pay a 15 percent increase being four times the
increase of any other ratepayer , and in particular , Bell
Rapids using 39 million kilowatts in one location.
Thank you for your attention.
COMMISSIONER SMITH:Thank you.Let's see
if there are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Okay, one question here, one factor is
that buying power during peak times is very expensive for
the Power Company and in the past with the drought
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180 BROWN (Com)
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situation and so forth , the Company has had to go out and
purchase more power during peak loads which is very
expens i ve .As an irrigation customer, would you be
willing to cut back on the peak time of the day in order
to have lower rates?
Well , they had a program that we utilized
that if we would pump in the evening hours and nighttime
but they cut the rate down , as I understand from our
manager, it's been cut in half of what it was and we
didn I t cause the increase.We've been in business , like
I told you 34 years.If they have to go out and buy
power , it I S because more industry, recent industry, is
using the power and causing the rates.They have
sufficient power to service the need of agriculture and
the businesses that have been in business for quite a few
years , but it's the expansion right now, the homes and
why can I t there be an A and B rate, new businesses and
new homes pay a higher rate as of now and know it up
front.
COMMISSIONER HANSEN:Thank you very
much.
COMMISSIONER SMITH:Just one comment.
One of the reasons why there probably can I t be an A and a
B rate is existing interpretation of state law by the
Idaho Supreme Court which has struck down prior
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181 BROWN (Com)
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Commission attempts to collect more on the front end from
growth to pay for new supply and the court has found that
to be discriminatory.
THE WITNESS:Thank you.
COMMISSIONER SMITH:FYI.
(The witness left the stand.
COMMISSIONER SMITH:Laurence J. Smi th.
Laurence Smi th.
MR. SMITH:Right here , ma' am.
LAURENCE SMITH
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
THE WITNESS:Do you want my name?
EXAMINATION
BY MS. NORDSTROM:
I do.
My first name is more important to spell
than my last name , Laurence J., no middle name, Smith
, and my first name is L-a-u instead of L-a-
r-e-c-e.
Thank you.What is your mailing
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address?
543 River Road, Bliss , Idaho, 83314.
Are you here t~night representing yourself
or another organization?
Well , I I ve been asked to say a few things
for some of my friends from Gooding County who I tried to
get here and I don't know that there I s anybody, there'
nobody here that I see that I know.The last hearing
that they had in Twin Falls, I was the only one there and
I wrote letters to the Public Utilities Commission and
some of my questions were left unanswered.Even at the
workshop in Twin Falls I did not receive information on
how much it cost to produce by coal , by gas, by water
power , maybe atomic energy and wind power now , how much
per kilowatt it cost to produce , how much to transport
this power to the individual customers, not each
individual customer , but the individual type of customer
whether it's irrigation or industry or the home, and also
the cost of servicing these people.
Some of this , watching the people read the
meter , some of the meters are close together, some of
them in the rural area are further apart , taking a little
more time, how much does it cost maybe in relationship to
the household owners, servicing them in the towns and how
much in the country.Maybe there I s a difference there.
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My main concern for myself is in the area
of the mitigation , mitigation it I S called, I don I t like
the word, it says to make less harsh in the dictionary.
I I d like to think that we sit down to a round table and
however the word is pronounced
COMMISSIONER SMITH:Mitigate.
THE WITNESS:-- mitigate with one another
and try to communicate to where we understood what the
other person was talking about.At the hearing over in
Twin Falls, I misconstrued what the man said, wrote a
letter about this thinking that the Idaho Power Company
executives made the decision to form IDACORP.That was a
situation where I have been very much wrong and
apologize to the people there at the workshop for
misconstruing what they said , but the thing that 11
interested more for myself is in this area of mitigation
as they call it.
Idaho Power has certain things that they
were supposed to do and some of these things they have
not done according to what I have found out from reading
about, that they were supposed to put out so many boat
docks and other things and stock so many fish and maybe
pay certain taxes, which I I m finding out they weren I t
paying.I don I t know such a lot of the things because
I I m still looking and reading.I didn't start this thing
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for any reason except a selfish reason.
I have a situation where I have furnished
the rafters , a place to take out for over 10 years since
a mud slide that hit in Bliss and this is what I started
with.What I'm finding out is that there are other ways
that little tiny moves like, say, pump the water from the
Thousand Springs up to the Jerome Butte were used for the
dairies and then turn around and take any surplus water
there is down below the Bliss power plant drl ving
you wouldn I t
neve r hold water,
600 feet , getting efficiency out of
believe, and the Jerome Butte didn I t
but there I s technology that could be used.
We have to think more of other people and
not so much of ourselves and Idaho Power has some
efficiency things that they could do.They have done
some.They have taken by roboting their power plants to
Boise and by closing certain service facilities and by
retiring a number of people, they have cut their cost.
Oh, I think there also could be some costs cut at the
upper level.Most businesses that go broke go broke
because of their top level executives and maybe, you
know , more efficiency.
Our pumpers are hurting pumping water and
I believe to speak for them you have to say well , maybe
we could pay a little more on a household level because
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it doesn't seem to be very much for the person to go buy
a brand new car and stuff, so the power rates in
Massachusetts several years back were 22 cents a kilowatt
and we're looking at five-and-three-quarters.I I m not
saying that some of the people that are on fixed incomes
don I t need help, I'm not saying that.Where there's need
to help people, we need to look at that situation.
Otherwise, well, how much does it cost to produce this
power and how much does it cost to transport , how much
does it cost to serve it per kilowatt-hour and is it
feasible to have coal-fired power plants in relationship
to taking your wind power and pumping your water direct
rather than running it through a generator or atomic
power running it direct to a pump.
We don I t have to necessarily generate
electricity to use the energy that's mechanical energy or
like the sun power is a different type of inertia energy
changing it to where it does the work, we don'
necessarily have to produce electricity.Anyway, I'
said enough.I I ve talked too long.
COMMISSIONER SMITH:Let me see if there
are any questions for you.
MS. NORDSTROM:None from the Staff.
THE WITNESS:Thank you very much.You I ve
been very kind to listen to a lot of BS.
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comments.
COMMISSIONER SMITH:We appreciate your
Thank you, sir.
(The witness left the stand.
COMMISSIONER SMITH:John 0 I Connor.
JOHN 0 I CONNOR
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Hi.
Please state your name and spell your last
name for the record.
CSB REPORTING
Wilder , Idaho
My name is John 0' Connor.That'
0- I -n-n-o-I live at 1794 East 4000 North in
Are you here tonight representing yourself
Buhl.
or an organization?
Well , myself mostly, but I do have a
family-held corporation with farm land in it.
Thank you.Please proceed.
Thank you for holding the hearings tonight
187 0 ' CONNOR
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and what I'd like to say, I guess , briefly who I am.
have two companies.One is called Farm Management.
Within that company, I manage farms for our own
family-held corporation as well as for other clients
around in the Magic Valley.I hold an agricultural
economics degree from the Uni versi ty of Idaho and
currently managing approximately 3 000 acres of farm
land.Basically, what that means is pay the bills, sell
the crops, try to represent the owners as well as myself
throughout Idaho.
Some of the properties are pressurized,
such as on the Bell Rapids proj ect, by a lift irrigation
some are pressurized from a pond being diverted from a
canal and that type of thing, so I have some specific
numbers for the effect of that on the different types of
properties depending on how that irrigation is for those.
I'd like to say that I do agree with the
previous two individuals who testified , with some of the
specifics that they had said I agree with and
understand what they said.It I S important to note that
for every dollar that's actually generated from a
production capability, such as on agriculture , it
circulates in the economy eight to ten times.You
probably already know that , but it I S important to
remember that, because if we don't do everything we can
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to secure production , somebody has to make something
happen.There is entirely too much service in the
economy and the foundation of the house , so to speak , is
being eroded away as we continue on and less service or
more service and less production.That I S very disturbing
for anybody who studies economics.
Just as an example on some of the crops
over the 1 as t five years, there I s really been no drama tic
increases.Just as some examples, alfalfa , for instance,
sometimes you'll sell hay for $50.00 a ton, sometimes for
$100 a ton, but overall as you really take an average of
the propert ies I 1 m involved wi th , you know , it's running
about $75.00 a ton.There I S really no change in what
we're receiving for alfalfa.Barley, same thing, 4. 75
per hundred is an average price.Wheat probably runs
around $3.00 a bushel and, of course, we have seen some
lows in the last five years down to $1.60.
You might note from a history point of
view that wheat was $1.60, I believe, somewhere around
the 1940s or '50s and those are the kind of things that
we're experiencing today in the kind of cost climate we
have to deal wi th.Pinto beans, $18.00 a sack is a
reasonable number.You know , some is 15, some is 22 , but
that I s kind of where we are.As far as contracts are
concerned, the sweet corn acres that are being contracted
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from Seneca are down this year.Potato acres to be
contracted are down.Sugar beet acres to be contracted
are down.Malt barley acres , down again , and contract
beans are al so down, so the general trend of crops you
can sign up for and hold on to to try to alleviate some
of the risk that you take in farming are all decreasing,
so in this climate , now there I s a significant increase
from Idaho Power which will be, in my opinion , like Bruce
previously said , could take some people out of business
and remove some of your production dollars in the
economy.
If some specifics would help, I have a
property south of Buhl that is Twin Falls Canal Company
and water is diverted to a pond and then pumped into two
pivots , if a 15 percent increase goes in , that will take
it from $5 430 in 2003 to $6 244.If it goes to 25
percent , it would go from 5 430 to $6,787 , an increase of
$1,357.That's an annual total cost of all the power
bills summed up for that situation.In a high lift
pumping irrigation scenario, such as Bell Rapids, I'
got 900 acres there and last year's power cost only was a
total of 141 300.I f we go to a 15 percent increase
that will be a $21 195 increase or a total for the year
of 162 495.If we go to 25 percent , that's a $35,325
increase or a total for the year 176,625.
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These kind of numbers I can tell you are
just devastating.If these kinds of percentages go in
there simply will not be some of the things happening
that we just assume are going to happen in this local
economy.Just as an example , if we go with the three
percent increase in my scenario with a normal crop
rotation that I've been having, it will go from 141 300
to 145 539 or a $4,239 increase.That's just at three
percent, and I know three percent doesn I t seem terribly
big, but $4 000 is significant.
Obviously, what I'd like to say is how
about zero, but , you know , we don't always get what we
want.One of the things that drives the bus, a last
comment I'll make , is labor costs and many of the
properties I'm involved with have made conversions to
sprinkler irrigation from gravity because of the labor
situation.I don I t know how much you I ve read about that
recently, but it's very difficult to find people to even
work, let alone get them to be motivated for the kind of
money that you can pay in a farming situation , so
therefore, we I re kind of between a rock and a hard point.
We've got to make improvements to try to avoid the maj or
crisis of nobody showing up to help irrigate today and
being stuck with a power rate that you can no longer
afford.That I S all I have.
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COMMISSIONER SMITH:Thank you.Let's see
if there are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Commi s s i one r
Kj ellander.
EXAMINATION
BY COMMISSIONER KJELLANDER:
Thanks for your testimony, Mr. 0' Connor.
When you say zero , are you saying zero wi th the
expectation that the current PCA level stays where it'
at, in essence , that that I s factored into your going
forward scenario?
Well, yeah, I understand that the base
rate obviously is adj usted every year based on the
different things that are happening with the snowpack and
the water flow and all the different things that happen.
If what you re saying is , if I understand you correctly,
if we stay with the base rate at zero for agriculture, we
do understand there I s going to be adjustments during the
year; is that what you were trying to say?
Well , I guess more plainly put is if the
rate setting into the next irrigation season were
identical to last year.Okay.
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192 0 I CONNOR (Com)
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Yeah , we would just deal with it as best
we can.I can't say at this point that we I re really
running in a profitable position considering last year'
energy costs.
And just to put clarity on that question
that is, with the -- I don't know what the percentage
rate is on the current PCA , but it's certainly a
percentage above the base rate, substantially above.
Yes , substantially above.Well, in fact,
I was talking with Richard Hawks of Idaho Power recently
and I guess over the course of the winter crunching some
numbers and , of course, you can play this a lot of
different ways, depending on how the snow comes off
et cetera, you could have a base rate increase and not
have nearly the event we I ve had the last three years and
still end up with less per kilowatt-hour and I understand
that , but I just have sort of a real deep-serving feeling
when I think about the base rate increase, especially to
the tune of 15 percent.I think that's jus t going to be
really - - there's going to be a lot more effect than just
on us is what I I m saying.
COMMISSIONER SMITH:Thank you for your
testimony.
THE WITNESS:You bet.
(The witness left the stand.
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193 0 I CONNOR (Com)
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COMMISSIONER SMITH:Oleta Bybee.
OLETA BYBEE
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Good evening.My name is Oleta,
t-a , Bybee, B-b-e-m here on behalf of AARP
Idaho.
What is your mailing address?
My what?
Your mailing address.
2146 Falls Avenue East in Twin Falls,
83301.
Thank you.Please proceed.
Okay,thank you.
COMMISSIONER SMITH:Could you just pull
that microphone up?I think people would like to hear
you.
THE WITNESS:Oh, they can't hear me?
Good evening.My name is Oleta Bybee and I I m a community
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194 BYBEEPublic83676
service volunteer for AARP Idaho.AARP Idaho represents
the interests of more than 153,000 Idaho residents age 50
and over.I want to thank and commend you today for
giving the public this opportunity to comment on the
Idaho Power I s application to increase rates by $86
million.AARP's membership has a vested interest in
ensuring that energy services are readily available for
consumption and at prices that are just, reasonable and
affordable.For this reason , public participation in
this proceeding is extremely important considering the
overwhelming impact rising utility rates are having on
our daily lives.
As you well know , older Americans are
particularly susceptible to extremes in temperature.
rely on the ability to heat and cool our homes for both
our comfort and well-being.Any degradation in utility
services can pose serious health concerns.Likewise,
increases in energy rates can be especially devastating
for those of us living on fixed and low incomes.
Al though older Americans consume
approximately the same amount of energy as do younger
people, we devote a higher percentage of total spending
to residential energy.This may be due to the fact that
older Americans spend a greater proportion of income on
home heating costs.Low income older famil ies , in fact,
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195 BYBEE
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spend an average of 14 percent of their income on
residential energy.Too often , these families are forced
to choose between risking their health and comfort by
cutting back on energy expenditures and reducing spending
for other basic necessities such as health care or
property taxes.AARP does not consider that a viable
option.
For this reason , we urge the Idaho Public
Utilities Commission to be guided by specific principles
that ensure that residential consumers pay only their
fair share of energy costs.Two principles that AARP
deems most critical for residential consumers are
reliable, uninterrupted service and affordable rates.
we urge you to take a hard look at the Company s filing.
AARP also urges the Commission to ensure
that adequate funding is available for bill payment
assistance programs for low income homeowners in Idaho.
Similarly, the Commission must ensure that consumers are
aware of the availability of assistance programs in order
to maximize public participation.Wi th the winter
heating bills still upon us , the need for well-funded
assistance programs is paramount.Wi thout adequate
funding and awareness, many residents who qualify for
assistance will not receive the help they desperately
need.
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196 BYBEEPublic83676
We trust this testimony has provided the
Commission with valuable insight into these important
issues.We thank you again for this opportunity.
COMMISSIONER SMITH:Thank you, Ms. Bybee.
Let's see if there are questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioners?Thank
you very much.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Al ton Huyser.
ALTON HUYSER
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name.
Alton , A-l-t-o-n , and the last name is
Huyser , H-e-r.I reside at 72 North Highway 75
Shoshone, Idaho.
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197 HUYSER
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Are you here tonight representing yourself
or an organization?
I I m representing myself.
Thank you.Please proceed.
I want to thank you for the opportunity to
testify and to just take about five minutes here.m a
farmer , been a farmer for 22 years pretty much on my own.
I farm 1 400 areas up in Lincoln County.I have 13 pumps
ranging from 400 horsepower down to 20 horsepower.Last
year my power costs,paid over $102 000 pump i ng fees
alone for the crop year of 2003.One of the best farms,
I irrigate and farm about five farms , one of the best
farms I irrigate , I took the hypothetical increase in
power that we I re looking at and rounding what would be
most consistent, I had a power cost of $86.00 an acre.
This was a 400 horsepower deep well and it irrigated 429
acres in the Dietrich area.
As what might - - something you might
understand as far as from your point of view, last year
rate of return , like I indicated , that was one of my best
farms, it yielded me 7.8 percent rate of return , which
was quite slim , but at least was in the black.I f you
would take the 15 percent increase that we're looking at
here, minimum of 15 percent increase , it would increase
my power cost to 98.00 and almost $99.00 an acre , $98.90.
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It drops my rate of return, assuming everything is the
same , and kind of like we talked about , increased fuel
prices, they went up slightly as we all know , labor,
fertilizer and repairs, the rate of return at the 15
percent drops down to 1.2 percent and that's assuming
last year compared to this year, so we're still kind of
in the black, but as you would be aware, there isn't a
bank around that will basically loan at that kind of
rate, so it becomes very difficult.
If you would assume that Idaho Power is
subj ect to the full rate increase and assuming all
variables are the same, it would raise the power cost up
to $107.50 an acre which would mean you I re looking at a
minus 1.9 percent return which it makes it, as you well
know, even harder to operate at a loss.
The last things in closing, in my area, I
haven I t seen many new irrigation hookups or lines go in
and most, as I I m familiar , the farmers are always
responsible for paying those lines and I would assume
that all other subdivisions and everything else are
subj ect to that same arena therefore, as Idaho Power
advertised greatly last year that they did spent a large
amount of money for lines and improvements in the past
years, however , as those lines went in, they were also
compensated through the developer, whether it be a farmer
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or a subdivision person that put those lines in , so I
real i ze those expenses were incurred by Idaho Power;
however , they were reimbursed for a large portion of
those , and as I indicated, just in my immediate budget
my water fees went up 11 percent , fuel went up 25 and as
you well know , everybody is in kind of a tight situation
right now.
Personally, it's hard for me to continue
at these kind of obstacles against myself.m 42 years
old, I want to continue farming however , looking at the
scenario and everybody wanting a piece of this thing, it
becomes harder and harder to operate, because I certainly
haven't put any retirement in my pocket for the last five
to six years and so that's basically all I have to say.
COMMISSIONER SMITH:Questions?
MS. NORDSTROM:None from the Staff.
COMMISSIONER HANSEN:Just one.
COMMISSIONER SMITH:Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
How would you rate the quality of service
that you receive from Idaho Power?
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200 HUYSER (Com)Public83676
I'd say overall it I S been very well.
my area, we seldom experience blackouts or anything.I'd
say the service has been satisfactory.You know, there
hasn't been any problems.
all I have.
COMMISSIONER HANSEN:
COMMISSIONER SMITH:
for your testimony.
Thank you.That'
Thank you very much
(The witness left the stand.
COMMISSIONER SMITH:
MARY SILVAZ
Mary Sil vaz.
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
name.
Good evening.
Good evening.
Please state your name and spell your last
201
83676
It's Mary Silvaz, S-v-a-I reside
Like you re on
at 324 South Highway 24 , Space
CSB REPORTING
Wilder, Idaho
COMMISSIONER SMITH:
SILVAZ
Publ ic
stage.
THE WITNESS:ve never been on stage.
Anyway, I I m here representing ICAN , also my parents.
They are on social security and I'm here for them.
father has been in the hospital for two months now and
Mom is in very poor health , too , so they asked me to come
and speak for them, also some other of my friends.What
I wanted to tell you is I - - Oleta basically covered a
lot of it, I was listening to her and my parents are
basically in the same situation.They pay a lot for
their bill already.Even when they're not home, their
bill is still the same.It doesn't go any lower , I don'
know why.We I ve had them come and check and they say
there's nothing wrong with it , but they've been paying,
like, 2 to $300 a month and raising it any higher for
them, it I s going to be too difficult and I feel that -- I
don I t know what I s going to happen if they have to pay any
more for their bill as high as it's already been.
Mom has definitely been stressed out over
this.You know , she I s a diabetic and just seeing her
stress out has really put a burden on me, too.I don I t
know what to say to her.I know that her income is not
going to go any higher , she I s on fixed income, so raising
that , I mean , it's either going to limit the amount of
food that she buys or , like Oleta said , turn down the
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202 SILVAZ
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heater , but at their age, I really don't - - I feel bad if
they do.In the winter it's pretty hard as it is.
Also, the other concern I had is I heard a
friend of mine, they've been laid off from J. R. Simplot,
which I'm sure you've heard that the plant closed down,
there s a lot of people that reside in that area that
used to work for that plant which they still haven't been
able to find a job and the bill going higher for them has
been a big stress on their lives, too and so I just
wanted to ask you and tell you that I hope you reconsider
raising these rates for all these family situations , so I
thank you very much for listening to me.
COMMISSIONER SMITH:Thank you.Let I S see
if there are any questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioners?
Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Is your parents' home heated by
electrici ty?
Yes, it is.
And how about do they have air
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203 SILVAZ (Com)
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conditioning in their home?
No, it's a small home, too.It's only a
two bedroom, one bath.
But you say year round the rate averages
between 2 and $300 a month?
It's high , it's high.It rarely goes down
below 200.It's usually 2 toI mean , it has but rarely.
300 and in the wintertime I can see it , but they often
leave to go to Boise and it's still pretty high.
COMMISSIONER SMITH:We'll have somebody
check on that.
THE WITNESS:Okay, thank you.
COMMISSIONER SMITH:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Okay, I think it I s
someone Huyser , someone who lives at 173 Millard.
MR. HUYSER:Tha t is I.Sorry I didn't
write it better.
COMMISSIONER SMITH:Tha ti s fine.
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204 SILVAZ (Com)
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HAROLD HUYSER
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name.
Harold H-e-r , Huyser , 173 Millard
Road, Dietrich , Idaho.
Are you here tonight represent ing yoursel f
or an organization?
For myself and for H&A Land and Cattle,
Incorporated.
Thank you.Please proceed.
The preceding people have pretty well
covered a lot of things that I could cover.My son
covered most of the things.He rents my farm and I 1
retired and I help him run 28 pivots, if that'
retirement, so that's a lot of fun in the summer.
There I S one of the things that I want to touch on is the
cost of service that is entered into this and the
pumpers , our first pump was put in in 1973 , along in
there.We didn I t cause a lot of this increase.
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There's a development going in down in
Boise, a block of homes where they're going to put in 450
homes in one place and I think a lot of the cost of
service that Idaho Power is asking for for the cost of
lines and equipment and whatnot needs to be borne by
those residential people and the commercial people that
are in that situation instead of asking the pumpers to
bear that cost, because we have no control over what they
do down there and they're asking us to bear part of this
cost.
There's a long grocery list of things that
are included in their cost , retirement and all those
other things which I'm sure they need to do, but those
costs should all be borne by the stockholders and not the
ratepayers.That's the way I feel and that will cut down
their dividends a little bit, but it shouldn't be a cost
to them.
The other thing is there's very few new
hookups as far as irrigation goes.In fact, there's a
lot of irrigation pumps that are going to be shut off
especially with these kind of costs, so I wish you would
surely consider that.The next thing, it I s going to have
a big ripple effect on banks and every business in this
valley, which will put a lot of small stores clear out of
business if we continue to have rate increases like this.
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I appreciate your coming and appreciate your time and
effort.
COMMISSIONER SMITH:
if there are questions.
Thank you.
much , sir.
Let's see
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:No?Thank you very
(The witness left the stand.
COMMISSIONER SMITH:Russell Patterson.
RUSSELL PATTERSON
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Hi.
Please state your name and spell your last
My name is Russell Patterson and it'
t -t -e- r- s -o-
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Wilder , Idaho
What is your mailing address?
Itl s 1800 Z, as in zebra, Street, Heyburn
name.
207 PATTERSON
Public83676
Idaho, 8 3 3 3 6 .
Are you here tonight representing yourself
or an organization?
Yes , here representing oursel f and Triple
Ace , Incorporated which is our farming corporation.
Thank you.Please proceed.
Commissioners of the PUC , we I ve heard some
very excellent testimony here tonight, but I'm here to
maybe reflect on a little bit of that as well.We farm
approximately 12 000 acres of irrigated sugar beets,
potatoes , barley and feed for dairies.In 2 0 0 3, our
power cost was $776,447.29.
In 2003 because of government quota
problems , most sugar beet farms lost $5.00 per ton on
their sugar beets.In our operation , that amounted to
approximately $500,000.Potato contract returns have
continued to decrease since 1996 and open market potatoes
have been well below break even on their returns.Many
potato farmers are out of business.Many farmers are
surviving only on their equities, but those are
continuing to erode.
One farmer friend of mine, who has farmed
all his life, contacted me two weeks ago and said the
bank turned him down on his financing.One of the maj
factors was power costs in his banker I s decision as he
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pumps from deep wells.In 1999, his power costs were
$97 180.19, but five years later it was $170 710.87.
This would not be so bad had our commodities kept up with
the price as well.
We need help in controlling these power
costs.I feel we are a big customer to Idaho Power and
we've always paid our bill.Perhaps Idaho Power needs to
evaluate the customers they currently have and help them
to stay in business by providing electricity at an
affordable rate, rather than looking for the next
customer coming down the street.It costs far less to
keep an established customer than trying to go out and
find a new customer.
Thank you very much.
COMMISSIONER SMITH:Thank you,
Mr. Patterson.Let's see if there are questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:If you have a copy
you wouldn't mind giving the court reporter, she would
appreciate it.
THE WITNESS:I will.
(The witness left the stand.
COMMISSIONER SMITH:Jared Grover.
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JARED GROVER
appearing as a publi~ witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell it.
Jared Grover , G-, and the address
is 305 East 5600 North, Hagerman , 83332 and actually,
have just a -- if you would like, I have copies that
can give you real quick.
COMMISSIONER SMITH:That would be great.
Thank you.Let I S be off the record for a second.
(Pause in proceedings.
COMMISSIONER SMITH:We I 11 label this as
Exhibit 999.
(Public Exhibit No. 999 was marked for
identification.
COMMISSIONER SMITH:All right, please
proceed.
THE WITNESS:Thank you for hearing my
testimony.Actually, I was born in Idaho and I moved out
of state actually for awhile, had a business and sold it
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210 GROVER
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and we wanted to return to Idaho and so I came back
recently and purchased a farm and I didn I t expect the
electrici ty costs to accumulate like they have recently.
This exhibit that I have provided , it basically shows
that my pro forma estimate of this year , I own 315 acres
and I have about 280 acres in alfalfa.Based on this , my
electrici ty costs will be approximately, if they use last
year's rates, approximately $56 000, which after I pay
for all my other costs and things like that , it provides
my family with about $24 610 that I estimate for this
year.
I f we do increase the rates, a 25 percent
increase would only give my family $10,000, just over
10,600 to live off of and even a 15 percent increase, I
would only have 16,000 which is still several thousand
dollars below the poverty rate for a four-person family,
so I ask that you please do not increase the rates.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.Sometimes when you're brave
enough to give an exhibit , people have to ask
questions.
MS. NORDSTROM:No questions.
COMMISSIONER SMITH:Thank you very much.
(The witness left the stand.
COMMISSIONER SMITH:Ken Robinet te .
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KEN ROBINETTE
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Good evening.
Please state your name and spell your
last.
Ken Robinette , R-o-i-n-e, mailing
address P.O. Box 531, Twin Falls.
Are you here tonight representing yourself
or another organization?
m representing the Community Action
Partnership Association of Idaho and the South Central
Community Action Agency.
Are you the same Ken Robinette that has
filed testimony in the technical portion of this case?
I am.
Thank you.Please proceed.
Commissioners , Staff , Idaho Power , thank
you for the opportunity to come and share just a little
bit of information over and above what I have formally
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212 ROBINETTE
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submitted for testimony.In listening to Mrs. Bybee from
AARP , I have to concur to what she is talking about with
the rate increases that could affect or will affect
especially the low income seniors and disabled on fixed
incomes and may,what I'd like to do share few
statistics that had my office put together today with
our energy assistance program.
COMMISSIONER SMITH:Mr. Robinette, are
these statistics something you will be introducing at the
hearing?
THE WITNESS:, these are over and
above.Yes , they are not part of my testimony.
COMMISSIONER SMITH:So is this
something - - I'm just trying to figure out how this is
not unfair to Idaho Power since you have prefiled
testimony in the case , this could have been prefiled with
that.
THE WITNESS:Well , this was to give some
more support to actually the low income.It really
doesn't have any bearing on my testimony.
COMMISSIONER SMITH:Ms. Moen.
MS. MOEN:We're presently in the process
of preparing rebuttal testimony based on testimony that
we I ve received from different parties that have
intervened in this particular case and I do have some
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213 ROBINETTE
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concerns about augmenting that particular information at
this time when you I ve had the opportunity to present your
testimony in full at that particular opportunity.
THE WITNESS:Would it be the Commission'
preference that step down then and not present this
evening?
COMMI S S IONER SMITH:Well,it I s put
a difficult position
THE WITNESS:I understand.
COMMISSIONER SMITH:
- -
since you I re
formal witness in a technical case and this is usually
for people who don I t have that opportunity, but I hate to
miss out on your information , so it I S a dilemma for me
personally, so what is the focus of your prefiled
testimony?
THE WITNESS:What I would like to share
this evening, if Idaho Power would choose to let me to
COMMISSIONER SMITH:No, I get to
choose.
THE WITNESS:You get to , great
- -
is just
some statistics on our energy assistance program, our
heat bill assistance program which has nothing to do with
my testimony.
COMMISSIONER SMITH:Ms. Moen , do you have
any obj ection to that?
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214 ROBINETTE
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MS. MOEN:No; however , could we get a
copy of the information and perhaps incorporate into
any rebuttal testimony that may be produced?
THE WITNESS:Absolutely.
COMMISSIONER SMITH:Do you have your
comments in writing?
THE WITNESS:I have -- I can just give
her my document that I have.
MS. MOEN:That will be helpful.
COMMISSIONER SMITH:All right, thank you.
Please proceed.
THE WITNESS:And I apologize for that,
not understanding the protocol procedures for this type
of a hearing.Let me start by saying the South Central
Community Action Partnership is a nonprofit organization
that has been providing services to low income families
across the Magic Valley since 1967.Three of those
programs of our core programs that we offer are emergency
assistance for food, we also offer a weatherization
program, and we have a heat bill assistance program that
is funded through HHS , which is the Health and Human
Services from Washington, D. C.This program is what I
would like to speak to.
This program provides heat bill assistance
for income eligible families, elderly and disabled for
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215 ROBINETTE
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their primary heating source, and I concentrated strictly
on the numbers of folks that we have provided service to
from December 1st of last year until current that are
electrically heated only.Those numbers total 3 187
households throughout the Magic Valley.Of those 3,000
plus households , 1 238 of those households were elderly.
Another 1,560 households were households resided with
disabled folks.The average benefit that has been given
out through the HHS to Idaho Power to help keep the heat
on in these elderly folks I home is $242 per benefit.
The percentage of electrically heated
homes versus gas heated or other heated homes , the Idaho
Power is 35 percent of our total , and if I may, what I'd
like to do is close with putting a face on the situation.
We have a letter that I just received from a client that
received our services , if I may.
COMMISSIONER SMITH:Certainly.
THE WITNESS:Due to confidentiality,
wi 11 not share hi s name.I wish to write a note of
service appreciation to the South Central Community
Action Partnership for their past and present assistance
with my heating and phone bills.I would be in serious
trouble without it.Also, to Randy Wright, Rob Burke,
Mike and Daniel for weatherizing my small home.For nine
years I've looked out ice-covered windows and left all
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216 ROB INETTE
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curtains closed for hours until the ice melted from them.
I have sat for hours in front of my heater to keep my
legs and feet warm the past three winters.I now sit in
the kitchen table or walk around and whatever needs to be
done , my legs and feet are warm.My thermostat is at a
much lower setting and I am comfortable and warm.I look
out in the early morning through the beautiful clear
glass at the frost in the ice-covered world and I can see
the beauty in it without suffering.What a wonderful
program this is.Thank you very much " and that will
conclude mine.Thank you.
COMMISSIONER SMITH:Thank you
Mr. Robinette.Any questions?
MS. NORDSTROM:Not at this time.
COMMISSIONER SMITH:Commissioners?
COMMI S S IONER KJELLANDER:I do have one.
EXAMINATION
BY COMMISSIONER KJELLANDER:
There was a statistic that rolled by a
little too quick for me you said 35 percent and you
talked about electric heat , what was that statistic one
more time?
Yes , Commissioner , it was 35 percent.
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217 ROBINETTE (Com)
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the total benefits that my organization has paid through
services for low income households here in the Magic
Valley was, to be exact,348 percent.
COMMISSIONER KJELLANDER:Okay, and I guess a
second time, maybe it's still out of context, I guess
I I 11 wait to see the transcript on that , too.
EXAMINATION
BY COMMISSIONER SMITH:
I just had one question.We had similar
statistics provided at the Pocatello hearing earlier
today, so I assume they I re in a different area and these
are just for your area?
Yes.
Could you tell me what your area
encompasses?
My area that we provide service to are the
eight Magic Valley counties.Would you like me to list
those counties?
Yes , please.
Camas, Cassia - - yeah , I have to see if
can do it in alphabetical order - - Blaine County, I
already blew it, didn't I , let I s see, we also have
Minidoka County, Twin Falls County, Jerome County,
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218 ROBINETTE (Com)Public83676
Lincoln County and Gooding County.
testimony.
COMMISSIONER SMITH:Thank you for your
THE WITNESS:Thank you.
COMMISSIONER SMITH:And if you would
provide them with whatever.
(The witness left the stand.
COMMISSIONER SMITH:Darlene Wilcox.
DARLENE WILCOX,
appearing as a public witness, having been duly sworn
CSB REPORTING
Wilder , Idaho
was examined and testified as follows:
EXAMINATION
Good evening.
Hi.
Please state your name and spell your last
Darlene Wilcox.It's W-
BY MS. NORDSTROM:
And what is your mailing address?
55 West 600 South , Jerome, 83338.
Are you here tonight representing yourself
or an organization?
name.
219 WILCOX
Public83676
Just myself.
Please proceed.
Okay.I came to the last hearing and
talked to you Ms. Smith , pertaining to getting gas for
my ouse ecause I an all electric home.Well , I
didn t follow up with you on it , but I did call the gas
company and they said it would be -- now , the lines are
only a couple of miles from where I live now , but it I S
going to be three or four years and that I s a long time to
wai t and what they want me to do , the gas company, and
understand, this is going to be the policy of Idaho
Power, I should go where the line is , pay for the line
myself and then as other people want to buy gas or power
I should sell it to them.Well , I think this is
ridiculous for me.
m 80 years old.I wouldn't get my money
back.It would be worse than some of the other
investments I've made, so I'm not going to do it.
going to solve the problem , I'm going to move to Boise,
but the reason primarily being so I get better medical
attention.
One thing I was horrified, because being a
person from Boise, I was horrified to find all the
expenses, why would anyone think that people, ratepayers
should pay for them to go to the Arid Club.Now, I go
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220 WILCOX
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back a long time.I used to know Mr. Roach personally.
They did not have the Company pay for them to be members
of the Arid Club.I don I t know who started that , but
does the Public Utilities Commission ever check on it?
Do you ever go through their books and see what kind of
things they I re doing?I thinkI think it I s shameful.
they ought to be ashamed and, of course, we all know
Idaho Power is a holding company and I go back a long
ways on that , too.
Holding companies were outlawed years ago.
I don I t know how they got it through , if you people let
it go through or what , but I do know that a couple or
three years ago, the president, he gave himself when they
were selling power down in California, he gave himself a
million or 2 million bonus, as well as a guy that was
head of that holding company, and then when things got
bad, my, goodness, what did they do, they cut the
di vidends on the stock , so that doesn't seem quite right
because I doubt very much if anyone even thought to ask
him to give some of his bonus back , but just
appalled.I guess it's because I'm an old poop, but I'
just appalled at the expenses they put in there that they
want the ratepayers to pay for.I certainly do not think
they should have any type of an increase at all.
COMMISSIONER SMITH:Let I S see if there
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221 WILCOX
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are any questions for you.
so.
THE WITNESS:, okay.I don I t think
BY MS. NORDSTROM:
CROSS - EXAMINATION
I was curious to know if you understood
that the Commission Staff performs an audit of each of
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Wilder, Idaho
Idaho's four top utilities every couple of years.
And they allowed it to go through before?
Well , the Staff identified the Arid Club
memberships in this case and have asked for it to be
Well , we I ve sure got Enron and other
little things here in Idaho, don't we?Okay.
COMMISSIONER SMITH:Do we have other
disallowed.
questions?
222 WILCOX (X)
Public83676
EXAMINATION
BY COMMISSIONER SMITH:
I I d just say that in terms of getting
natural gas , two miles might as well be the moon.
Yeah.
And be careful where you move in the
Treasure Valley because gas is not available at my house.
What part do you live in?
Southwest of Ada County.
okay.
So check on that or you might end up in
the same situation that you were in previously and just a
note that the Commission's auditors routinely audit our
utilities.The baseNothing is in your base rates.
rates you are paying now were set in '95, so any dues or
fees or extras they paid between then and now are not in
your rates and what this case is about is what I s going to
be allowed going forward after , and the Commission
routinely disallows corporate image advertising, lobbying
expenses , chari table contributions , anything that isn
related directly to the cost of service and that's our
job and we take that pretty seriously.
Well , I complained before about the $2.
because then they sort of called it just a meter charge
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223 WILCOX (Com)Public83676
and now they want to raise that to $10.00 and I don I t see
that.YouThey I re making money.They have a monopoly.
know, it I S bad.Okay, thank you.
COMMISSIONER KJELLANDER:Two things
want to mention.
COMMISSIONER SMITH:Commissioner
Kj ellander.
COMMISSIONER KJELLANDER:First of all, we
have natural gas in my neighborhood and there are several
homes for sale, I'm not a Real tor , and the second one is
you talked about the holding companies and that I s
large part tied to a federal policy established referred
to as the Public Utilities Holding Act and there I s not
much we can do about that.
THE WITNESS:Well, you just have to watch
them more carefully or I obviously have some time off and
I can go down and check on them.Thank you very much.
COMMISSIONER SMITH:And we III take you up
on that.
(The witness left the stand.
COMMISSIONER SMITH:Right now we re going
to take a ten-minute break and by my watch , that puts us
back at 8:00 ol clock.
(Recess. )
COMMISSIONER SMITH:We'll come to order.
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224 WILCOX (Com)
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kind of gave out.
Yolanda Naranj 0 .It looks like the people
MS. TELLEZ:I I m going to be speaking on
her behalf.
ALECIA TELLEZ
appearing as a public witness, having been duly sworn,
CSB REPORTING
Wilder, Idaho
was examined and testified as follows:
EXAMINATION
Please state your name and spell your last
Alecia Tellez , T-e-z, A-l-e-c-i-a.
Your mailing address?
O. Box 462 Heyburn, Idaho.
Are you here tonight representing yourself
or another individual?
I am here on behalf of the Idaho Migrant
Council as well as some of my friends.
Thank you.Please proceed.
BY MS. NORDSTROM:
I will testify for my friend who just
caught me in the rest room and said please do this for me
and I said okay, I guess I can.Her situation was she
name.
225 TELLEZ
Public83676
had a haranguement wi th the Power Company.Her husband
is laid off and hardly working and she works very minimal
hours herself.The job market in the Burley area,
Heyburn/Rupert area is not good at all , okay, Simplot,
everything else is just not good , and she had made
arrangements with the Power Company to make payments and
left for the weekend, came back , was gone Friday and came
back Saturday evening to find no electricity in the home;
therefore, all her food went to spoil.She lost
everything in the freezer , everything in the frig, which
is a big burden on a family who is laid off barely making
ends meet and now she has to provide food for the family,
plus pay the electrical bill that she is behind on and
can I t make payments, so that's her situation.Wha t do we
need to do to stop that?What can we do to stop that?
don't know.I don't have the answers for her , hopefully
you guys will.
On behalf of the Idaho Migrant Council,
like the group Community Action Agency, we provide
supportive services to the elderly, to the low income
families in the area of Burley and Twin Falls area.
see a lot of families come into my office that are
struggling due to the fact of unemployment.No jobs are
available right now, fixed incomes, the elderly that are
on fixed incomes , and it's really hard for me to see
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226 TELLEZ
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month after month or day after day when they come to me
and they need additional services that I s already been
provided to them by Community Action Agency and we can
provide a little bit more, it's not much more, but we can
give them a little bit more, but I canlt understand as to
why any power company, being Idaho Power , City of
Heyburn , City of Burley, City of Rupert, United Electric,
whoever, if an individual or a family cannot afford to
pay their electric bill on a monthly basis because of
whatever and then to tack on another 10 or $15.00 service
charge because they could not make the deadline, that'
ridiculous.
Why do we have that?I mean, I'm trying
to figure that out myself as an individual who has to pay
that herself, so I try not to be late because I cannot
afford to pay an extra 10 or 15 bucks a month on top of
what I can I t already afford to pay.That's one question
that I I ve got.
Another question is why or does Idaho
Power, City of Burley, City of Rupert, do you guys have a
cap on what you pay your individuals or do they get
raises every year until they reach $30.00 an hour?
don I t know.That's a question I I m throwing at you guys
any power company, is there a cap for what they pay their
employees , and the reason I ask that is because I worked
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227 TELLE Z
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for the City of Heyburn for four months, okay, did not
like my job for the fact of the questions that I I m asking
you now is how can we make people pay an extra 10 or
$15.00 a month when they can I t even afford to pay the
first bill, the regular bill.
The disconnect fees are 5 and $10.00.
they get disconnected , they I ve got to go pay an extra
to $25.00 more to get hooked back on.That's totally
ridiculous to me and I don I t know why it I S there, but
it I s there, and when I got hired there, I felt I deserved
that rate because I was bilingual and I was going to give
them the valuable services they needed.Then when I
decided to leave, I turned around and asked the city
council members, okay, what do the other girls make, 11
interested in finding out.Okay, you are allowed to go
get a budget report of the annual report for any company
and I don I t know if anybody is aware of that, but that
was made aware to me by one of the council members.
looking at that report, I come to find out that some of
those girls are making more than some of the guys who
work their butts off on the outside and work hard and
during cold weather and whatever and they get paid less
than the girls sitting in the office printing bills
taking money and giving customer service.
So I'm going okay, there is something is
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228 TELLEZPublic83676
wrong with this picture , so then I asked is there a cap
at the City of Heyburn?No, there is no cap.Well , then
you I re telling me that you can give these girls a raise
every year a dollar?
COMMISSIONER SMITH:Could you please
relate this to the Idaho Power case?The City of Heyburn
has their own budget.
THE WITNESS:So that is my question to
you, does Idaho Power have a cap?
COMMISSIONER SMITH:Well , they I re not
here to answer your questions.You re here to make a
statement to us.
THE WITNESS:OkaYi so that I s what I'
asking and it's probably not only Idaho Power that I 1
really asking that to.It I s to all the utility companies
in general , okay, and seeing the individuals that come
into my office that are on fixed income and laid off for
whatever the reason may be, it's very hard for
individuals to make ends meet, and it really concerns
because if 11 m going to be helping an individual save
to $100 and still get cut off , then I've wasted my money
because they I re not going to get turned on and it I S
really hard for me to come to my job every day and see
women that are divorced or separated or whatever, the
elderly come crying to me and saying, I need my heat, how
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229 TELLEZPublic83676
am I going to feed my children, how am I going to take
care of myself , how am I going to keep warm at night and
it's really sad that any power company, not just Idaho
Power , but any company, I would just like to understand
where is the
- -
I don't know how to even explain it.
I mean , how do we charge individuals who
can't afford to pay their monthly bills.That I S one of
my deals and then the farmers that are testifying
tonight , if they go out of business, what does that mean
to the workers there?They lost their job , so the
economy is going to keep going down.Instead of going up
and getting better , it I S getting worse , so if it's going
to be bad for the farmer , it's going to be a domino
effect for everybody else in the community and not to be
concerned because they were supposed to be getting better
and hopefully, we will and I believe that we will.
There's just a bad situation right now everywhere , but
that I S basically what I wanted to say is I would like to
see not only Idaho Power but all the other utility
companies to take into consideration the economy and what
we I re up against now and the rate of inflation we all
know , I believe, that it I S not being kept up with
anybody.You know, we I re not keeping up with it and
feel that I think we overpay a lot of our employees, our
executives, our top ranks , I think they're overpaid.
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230 TELLEZ
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don't feel that they should be getting paid umpteen
thousands of dollars a year.Let I s share some of the
weal th with some of the poor and needy people and that'
all I I ve got to say.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.
MS. NORDSTROM:None from Staff.
MS. MOEN:I would really like to have the
spelling, please, is your name Yolanda?
THE WITNESS:No, I am talking on behalf
of Yolanda Naranjo and my name is Alecia Tellez and
represent the Idaho Migrant Council in Burley, Idaho.
MS. MOEN:And I wanted to make sure we
have the correct spelling of Ms. Naranjo so that we can
check the situation with the power being terminated.
THE WITNESS:Okay, her last name is
r-a-n-j -Her first name is Yolanda , Y-d-ai
is that correct, Yolanda?
MS. NARANJO:Yes.
COMMISSIONER SMITH:Now , I wanted to ask
that , too , was this service terminated after 2:00 p.m. on
Friday?
THE WITNESS:Yolanda, can you answer that
for me?Was the service terminated after 2: 00 p. m. on
Friday?
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231 TELLEZ
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MS. NARANJO:Yes , it was before 4:30.
think it was about 3: 30.
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Wilder , Idaho
COMMISSIONER SMITH:On Friday?
MS. NARANJO:On Friday.
COMMISSIONER SMITH:Would you talk to
Marilyn Parker who is standing right there?Thank you.
THE WITNESS:You re welcome.
(The witness left the stand.
COMMISSIONER SMITH:Michael Larson.
MICHAEL LARSON
appearing as a public witness , having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name for the record.
My name is Michael L. Larson
L-a-r-
Your mailing address?
4600 North, 600 East, Buhl.
Are you here tonight representing yourself
or an organization?
232 LARSON
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Magic Water Company in Buhl.
Thank you.Please proceed.
First off,I'd 1 ike to make the statement
that we adamantly oppose any rate increase.Without any
question , we feel it I S an absurd current charge that
re looking at.What we at Magic Water , we at Magic
Water farm approximately 7 000 acres.We were the first
high lift irrigation proj ect to go in in the State of
Idaho.We've been an IdahoOur lift is 380 feet.
customer for 48 years, always paid our bill and in the
last five years we have seen our rates go up 83 percent.
Our proposal to Idaho Power is if they
need additional income, they need to cut some of their
expenses.Every farming operation in the State of Idaho
now is looking at a flat income rate as far as commodity
prices and yet , our expenses is continually going up 20,
30 percent a year.We do not understand why Idaho Power
cannot internally cut expenses as we in industry and
agricul ture have to do every year in order to meet our
obj ecti ve of paying our power bill.
One of the things that concerns a lot of
us is that the top three men in Idaho Power last year
were paid $1.8 million.Now, that's absolutely
ridiculous.You know , you can sit down and figure that
out per hour , but it would probably come out about $600
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233 LARSON
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an hour per person.It I S our understanding that puc
needs to guarantee Idaho Power a certain rate of return
every year being they're a regulated company, but we also
feel that PUC is in a position to also help the
agricul tural community, the industrial community also
have a rate of return that's acceptable.If we continue
to have power rates increase year after year , as other
farmers here tonight have testified, we will be out of
business.There's no absolutely no question about that.
In the last five years we have instigated
every possible means of conserving power on our farming
operations.Our water use has gone down dramatically and
yet , our power continues to increase.Last year we
reduced our consumption of water by 40 000 inches of
water, and yet, our power bill continued to go up from
the previous year.
Currently there is four proposals out
there on exactly what our current power rate for 2004 is
going to be.It's a lot of confusion.We've run the
numbers on every scenario and we think PUC has let us
down on exactly what those rates are going to be.First
off , we have the standard rate that's currently in place.
Then we have the rate that Idaho Power wants to give.
Then we have the PUC rate which they say is - - no , PUC
recommended 4.29.
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234 LARSONPublic83676
COMMISSIONER SMITH:Staff.
THE WITNESS:Staff?And then Mr., is it
Schunke , his proposal which is totally different.Now
for us to break those down and compare them to how our
power operates is almost impossible.There is absolutely
no breakdown on 4.65 cents that Idaho Power proposes.
need to know the demand charge , we need to know in season
charge, we need to know out of season charge and those
figures have not been given to us.The only person that
has provided us with that one figure is Mr. Schunke from
Staff and I applaud Staff's, I should say, search, I
guess , through Idaho Power trying to sort out all the
fluff that's in there and eliminating a lot of that , but
we need to know what those costs are going to be and
tonight we don I t know.
Which rate are we going to have?The
other thing we need to know is we need to know what I s
going to happen on the power cost adjustment rate.
understand that it's going to be currently the 1.3159
until the 31st of May, but what is going to happen after
that?That's going to be over and above whatever you
decide here and a lot of farming operations have not
figured that out yet.Is that going to be equal to that?
Is it going to be less?Is it going to be more?And if
it's going to be more, there's just no way that we can
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235 LARSON
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continue to farmi so in closing, I would say that No.
Idaho Power needs to learn to conserve and cut costs and
it appears to me that they're on a spend free operation
and any time they want money, they want a rate increase
or they want a PCA.
That's all I have to say.Thank you.
COMMISSIONER SMITH:Thank you.Let I S see
if there are questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Sir, are you satisfied with your service
that you receive from Idaho Power?
Yeah.
COMMISSIONER KJELLANDER:I have a
question.
EXAMINATION
BY COMMISSIONER KJELLANDER:
I guess something was said that maybe hit
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236 LARSON (Com)
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a nerve and I apologize for allowing anything to hit a
nerve when I I m away from home in a crowded room, but with
that said, I guess what kind of struck me was I want
certainty as well , but are you advocating that we not do
a thorough review , that we not go through it and that
instead maybe accept some arbitrary amount up front to
give everybody certainty and then do some kind of
recovery later on down the road that may indeed harm you
so desperately in the context of you trying to put
together a business plan that you opt not even to break
ground only to find out later on that the rate was such
that then you would have been in the money for a specific
crop?
, what I'm proposing is that we get some
actual numbers that we can plug in to what we I re used to
dealing with.We deal with an energy charge , we deal
wi th a demand charge , we deal wi th a meter charge, we
deal with an in season charge and an out season charge
and a PCA charge.
And I guess the follow-up is, then , you
don't see this process helping us to get to that
conclusion to establish that?
Well, I do, but for us to come here and
testify on what we think is reasonable cannot be
accomplished because we do not know what those rates are
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237 LARSON (Com)
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going to be.I mean , you give us a figure of 4.29 from
Staff , but you give us no indication of how you derived
that figure.
COMMISSIONER KJELLANDER:I'll give up.
COMMISSIONER SMITH:Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Just a follow-up.I can understand the
value of having those rates set as you go into your
season of farming, when is the last day or approximate
time that you go for your financing or whatever that it'
really critical that you know what the rate is going to
be that coming year?June?Is it now?Is it May?
I would say it would probably be the first
of every year when we start putting our budgets together,
decide what crops we're going to plant, what contracts
we're going to try to acquire and when we look at a
contract , if we I re presented a contract for a potato
contract, for example, we have to put all the variable
costs into that to see if that will in fact make us some
money and we put in chemical , fertilizer, water, power
labor , on and on and on , and if we do not know what those
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238 LARSON (Com)
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costs are , all of our other suppliers can give us a
defini te figure.
If I call up on a chemical, I have a
definite price.If I call up on fertilizer, I have a
definite price , and in the past we've been able to do
that based on what was the current rates.The only thing
we never knew from year to year is what the PCA might be.
Now we don t know what any of those rates are going to
be, we have not a clue and if I missed something on that
, you need to explain to me how you got to that
because we cannot break down a figure of 4.29 cents into
energy, demand , in season, out of season and make it come
up to that figure and we can't just take 4.29 and times
that by some - - our energy charge.We have to know
most irrigators start irrigating out of season and they
finish irrigating out of season.Three months of our
crop year is an out of season power cost and so those
costs are extremely important to us.The rest of the
the in season charges we have to know and we don't know
any of those rates at this time from anything that has
been put out there.
COMMISSIONER HANSEN:I understand.
That I S all the questions I have.
COMMISSIONER SMITH:Thank you for your
testimony.
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(The witness left the stand.
COMMISSIONER SMITH:Rocky Trail.
ROCKY TRAI L ,
appearing as a public witness , having been duly sworn
CSB REPORTING
Wilder , Idaho
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
last.
Hi.
Please state your name and spell your
Okay, I better correct that since I had to
swear I I m telling the truth , Rocky is a nickname.
first name is Walter , W-a-
COMMISSIONER SMITH:I was wondering what
your parents were thinking.
THE WITNESS:Last name is Trail
T-r-
83633.
BY MS. NORDSTROM:Your mailing address?
5308 East Trail Road, King Hill , Idaho,
Are you here tonight representing yourself
240 TRAIL
Public83676
or an organization?
Myself and I farm as a corporation.
Thank you.Please proceed.
Thank you for letting us come and testify
here tonight and hear everybody's comments.I guess
luckily enough I I m far enough down the line that most of
what has needed to be said has been said.I'll try to
keep the rest of my comments short just to add to most
people.A lot of it is just the same repetitiveness.
irrigate between 2 000 and 2 500 acres of ground, sugar
beets and alfalfa.I have irrigation costs due to power
ranging from zero on one farm that's gravity pressurized
to extremely high lift pumps out of the Snake River to a
high plateau.That particular place last year , the power
cost alone was $244 an acre, power only.m not talking
maintenance on pumps, main lines or labor.
As you can see when you approach $250 an
acre and start talking about anywhere from a 15 percent
increase that was recommended by your Staff to 25 percent
by Idaho Power Company, they both put me out of business.
I was going to shift back up a hair.The place I live on
which , I believe , Mr. Hansen , you came to my house a
couple of years ago when we were having power outages to
the extreme of about 250 a year, so you kind of know
where I'm at, but my dad walked in there in 1937 and
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farmed for 37 years there.I I ve been there for, I
believe , 31 starting this year.My son is back and
would hope that he could be there for another 30, but
this power issue is quite an emotional issue with us and
it's getting tougher and tougher to make the bottom line
work.
People have testified here today on the
rate increases.I believe out of my pocket directly is a
34 to $40,000 increase depending on what happens and
that's the places I own.The places that I rent, which
is mostly from family members, they share that same kind
of cost.Of course, naturally, they'd like to have more
rent , but with fuel and everything else, I try not to
have to do that.I agree wi th Mr. Larson that as
farmers, for years we I ve been told to tighten up our
belts and hold the lines on expenses.On my operation we
have increased main line sizes to decrease friction.
have switched pumps and motors out to come up with
increased efficiency pumps and motors.ve gone to
flow nozzles to regulate more even the amount of water we
put through our hand lines, but we seem to be at the end
of our rope.
We I re running more acres with less labor.
We substitute capital in the form of equipment for labor.
I think what I'm asking for is that Idaho Power look at
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some of the same situations and I don't see it.We had
an office in Glenns Ferry and it was closed, transferred
to Mountain Home.You no can longer go to Mountain Home
and do any business, you have to go to Boise.Somebody
tonight testified about the dispatch situation out of
Boise.I agree with that.I have called up there for
power outages and they I ve told me I have a lineman in my
area, but the problem was she located the lineman on the
wrong side of Glenns Ferry and the wrong side of the
ri ver for being my area.Either their maps aren'
accurate or they don't take the information down accurate
and that's a concern.
I am like Mr. Larson , I would like to see
a zero percent increase.I understand that that'
probably not possible.One of the things I would like to
ask is why large industrial, which is at the lowest rate,
gets a recommendation of a zero percent increase.
Irrigation, which we're in the middle of the rates, we
get a recommended anywhere from 15 to 25.I don't feel
it's fair.ve heard testimony that says that the other
rates subsidize us.ve never seen the proof to see why
that happens.In my way of thinking, we irrigate during
the middle of the summer.Most of the water flow is in
the middle of the summer.If you want to look at low
water flow , look in November, December , January.m not
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irrigating then, so I think industry is the one that
could possibly be causing part of this drain on power.
We also have heard - - well , we read in the
paper and heard testimony that Idaho Power is trying to
recoup costs associated with growth.would say that
irrlgation has shrunk in the last years.The paper
stated Ada and Canyon County reduced lrrigated acres by
over 20 000 acres in the last five.In our area, Bell
Rapids, Black Mesa, Sailor Creek, Flying H, Indian Hills,
most of those proj ects have either completely quit
farming or have cut acres by at least a third.It I S not
increased.
I did ask Idaho Power to run three-phase
power down a line last year that was existing for a
quarter of a mile.They wanted $14 500 to do that, when
a private contractor would do it for 5 000 underground.
That's a 300 percent inflation on services.If they have
to recoup more than that, I don't see it.I guess that I s
enough about irrigation.
I would make one comment about
residential.There's a proposal , and I read it in the
paper , but anything over 800 kilowatt-hours in a house in
the summertime, they increase your rates by a penny.
What I feel in that situation is that you I re picking on
rural Idaho.m a little bit like the lady that said
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244 TRAILPublic83676
she hasn't got gas near her house.ve got the gas
pipeline running through one of our farms nine inches
deep and let me tell you what, we don't dare tap into it
but we don t have the option to run our heat on gas, our
hot water on gas , our cook stoves on gas, pI us when you
live in the country like I do, you eat more of your meals
at home , so you do more cooking at home.You sure as
heck dirty more clothes, you do more washing at home and
at 800 kilowatt-hours a month , there's not a rural house
out there that's going to make it and I think that extra
cent is, again , just a dig in our pocket.
I guess at that point I'll quit talking
and if you I ve got questions, I'll be happy to answer
them.
COMMISSIONER SMITH:Okay, let's see if
there are any.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioners?
Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
I take it from your comment that you'
not completely satisfied with the service from Idaho
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245 TRAIL (Com)Public83676
Power.
It has drastically improved since you were
out there.Yeah, my service, 11 m lucky enough , I have a
tremendous Idaho Power person that lives in Glenns Ferry
and during the irrigation season , I'm going to get him in
trouble when I say this, we call him direct.We have hi s
cell phone, we have his house phone.If we have a
problem , we call him and he comes down and he gets us
back on line quickly.He has been reprimanded for that
because we don I t go through the dispatch in Boise, but
when we go through the dispatch in Boise, A , the guys get
lost; B , they doh' t know where we're at; and C , they
don I t care, so our service is pretty good.Regarding the
power outages, you are the one, I'm sure you were at my
house, 98 percent of those have been solved.It's been
relatively good.
COMMISSIONER HANSEN:That's great.Thank
you.
COMMISSIONER SMITH:Thank you f or you
testimony.
(The witness left the stand.
(Pause in proceedings.
COMMI S S IONER SMI TH :We'll go to Matt
Hi tchcock.
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MATT HITCHCOCK
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last.
It's Matt , M-a-, Hitchcock
H- i -t -c-c-o-c -
Your mailing address?
Is 932 Del Mar Circle in Twin Falls,
Idaho , 83 3 0 1 .
Are you here tonight representing yourself
or an organization?
m representing myself.I own an
electric motor repair business.
Thank you.Please proceed.
I I d just like to say that the proposed
rate increase is going to have a real negative effect
on - - obviously, the pumpers and irrigators that have
testified before you have stated that the costs are going
to be so great that it's going to be very difficult for
them to continue to farm their ground and especially, the
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247 HITCHCOCK
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deep well proj ects where they're pumping water from a
deep distance , a deep setting on their pumps and whatnot
and being in the electric motor business, I see there'
not very many ways for these customers to save.There I
not energy efficient motors and whatnot available for
these larger horsepowered deep well motors and on the
centrifugal pumps or booster pumps, a lot of people call
them, there's not any kind of motors available for those
customers for high efficiency motors.
In the short period of time that they pump
in during the year there I s very little return on those
high efficiency motors anyhow.They don't pump 24/7
type-applications, so there's very little savings to be
incurred in that respect , and it just seems like, like
the other people have testified , the growth in your
service has been mostly residential and maybe large
industrial , I I m not sure about that exactly, but the
irrigators have actually reduced their demand on how much
power they need over the years and whatnot, and it seems
unfair for them to have to share such a large burden of
that cost.
I heard somebody mention that they might
be subsidizing - - their rates are subsidized by other
people.m not sure about that either , but the economic
growth of this state depends so much on agriculture that
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248 HITCHCOCK
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if we kill the engine that drives our economy, I guess
the only thing left would be to sell our power out of
state.We won I t have anybody in state to sell it to.
It's just not economically feasible, I
don't think , to really expect this much of a rate
increase from these users.The gentleman from Bell
Rapids Corporation mentioned that their costs are just
going to go right through the roof and that they employed
150 people they mentioned.I mean, that I s just a start
of the problems if we raise our rates like that, and one
of the few things that Idaho enj oys is a lower power rate
than a lot of areas which helps make us competitive in
certain aspects and if we do away with some of our
competitive aspects, it's going to make Idaho and our
products much harder to sell and distribute around the
country and around the world , reallYi so I just would
please ask you to look at another way of increasing
revenue and it doesn't seem fair that Idaho Power has to
buy a lot of spot power from IDACORP and they seem to
have had trouble with lawsuits and whatnot questioning
their ethics and how they sold power to Idaho Power and
then Idaho Power has to pay or was asked to pay part of
those legal expenses , then I guess they rej ected that,
but there's accountability to shareholders , but if you
away with all your customers , the shareholders aren I
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249 HITCHCOCK
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going to benefit from that either I don't think and
really, that's really all I have to say.I mean, it I S
been said pretty well other than that.
COMMISSIONER SMITH:Thank you.
Questions?
CROSS -EXAMINATION
BY MS. NORDSTROM:
Yes , are you concerned that your business
will suffer as a result of a rate increase?
Absol utely.You know, we're a small
business in Idaho and we employ, I think , nine or ten
people total and if our agricultural customers suffer in
that kind of a way and our commercial users , also , it'
definitely going to negatively impact our business.
mean, I think we've seen a -- it's a little early for us
to tell for sure how much impact not knowing what the
rates are going to be later in the season, but I think we
were seeing a lot less or dramatically reduced amount of
maintenance going on pumps and motors and stuff like that
and it I S only going to get worse if less ground is farmed
overall, so , yeah , I'm definitely concerned how that will
impact our business and the people that I employ and
wha tnot .
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250 TRAIL (X)
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questions.
MS. NORDSTROM:Thank you.No further
COMMISSIONER SMITH:Thank you.Thank you
for your testimony.
CSB REPORTING
Wilder , Idaho
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Mike Cranney.
MI KE CRANNEY,
appearing as a public witness , having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Good evening.
Please state your name and spell your
last.
Michael or Mike Cranney from 1300 South
503 West , Oakley, 83346.
How do you spell your last name?
n-e-
Are you here tonight representing yourself
or an organization?
251 CRANNEY
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Representing our Cranney Brothers
operation and also I serve as a director on the Idaho
Ground Water Users Association.
Thank you.Please proceed.
Our operation , we farm about 15,000 acres
south of Burley in the Oakley area , raise potatoes , sugar
beets, wheat, field corn and a little bit of alfalfa hay.
Under the proposed 25 percent power increase, a 600-foot
lift pump in our area , that would be lifting the water
about 500 foot , plus your head, you know , generate
pressure it'gallons per minute,three years ago
was $122 an acre.We proj ect thi s year will $158
per acre for that same well.We use on an average about
20 to 21 million kilowatts of power annually and under
the new rate , we'll have a $240 000 a year increase in
our power costs.
I guess about four points that I'd like to
bring up.First off , Mini -Cassia area has been hit very
deeply with the loss of our Simplot plant and probably
around 8 to 10 000 acres of contract potato growers as a
result of -- you know , we're seeing NAFTA at its probably
best for Idaho and the Mini-Cassia area is probably
seeing that as much as anybody.You heard testimony of
the Migrant Council people tonight and some of our
elderly people in the area that it I S created hardships
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252 CRANNEY
Publ ic83676
for them.
As we lose our grower base out in the
communi ty through these kind of excessive increases in
power that have been shifted mainly to the irrigator and
agricul ture, this - - I guess I wonder how we're going to
be able to recover economically our area if we lose our
agriculture base.I guess the point I'm trying to make
is, you know , we have an economic development board,
Simplot just gave us the Simplot plant back and so how
are we going to go out and generate anything in that area
wi thout a strong agriculture base, and between the water
shortage or the ground water issue and then the power
increase, also, on top of that, all that is doing is
raising the cost of business and puts us in a competitive
disadvantage in the international market and that's where
we I re competing, sugar beets we I re competing, wheat,
potatoes , everything that we raise is competing in the
national market.
The power rate, I think that there's some
things that could be done through conservation that would
help immensely and the problem with conservation now in
the ag sector is whenever we do any conservation , then it
comes back and they take it out of the rest of the
irrigator's base.It doesn I t go back to the mother load
where if everybody benefits from conservation, then
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253 CRANNEY
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everybody should pay for conservation rather than
dedicate that cost just back to the irrigators , like the
power buy-out , some of the things we I ve had in the past.
The Oakley area has kind of an interesting
proposition there, the gravity system.We've gone to
Idaho Power a couple of times over the years.We could
put a gravity system there and probably reduce probably
21 to 22 000 horsepower of power and each time we go
basically what they I re doing is hoping you'll go broke
and they can take the power for nothing.We've gone in
and said why don't you give us an energy grant , you'll
gi ve us a piece of the pie.I guess our thought is that
if it I s costing seven cents for the ratepayer to step in
and be able to move new power or bring it on line, that
would be in the seven- to eight-cent basis and we went in
and said why don'you give us two cents , help us use
that energy conservation money to build a proj ect .
frees up power for everybody in society, it just doesn'
free it up for the irrigators, but the problem is there'
never enough incentive in the conservation modes in the
ag area or in the pumper sector that it doesn't really
make a lot of sense in most cases.
They talk about the pumping, you know , off
peak and all that , well , some of us have such extreme
capital costs and drilling 2 000 or 1,500 foot holes and
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254 CRANNEY
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we can't afford to have the capitalization to capitalize
on that.I think that would be the same in some of the
other high lift areas.m opposed to Idaho Power trying
to ramp up the cost of service which they're trying to
build into the new irrigated rate structure.I think
it I S very discriminatory.We have a 50-year old system
in Oakley and for them to come in and try to wind a bunch
of costs in there and fantasize that there's a new cost
thing for delivering service to that area , you know , I
think that doesn't stand the test and, you know , most of
the irrigation systems in Idaho are basically the same.
There I S very few of them that are current in the last 10
or 15 years.
If the cost goes up and my point four is
if we do increase the cost, which it's a given that
there's probably going to be some increase in the rate
then it should be borne on all the classes of the
- -
that's my opinion anyway, it should be shifted to all
classes of users rather than try to isolate the ag sector
and try to convince us that we I re getting subsidized
power.If rural Idaho is going to survive , then we
somewhere in this equation need to figure out a way to
keep our agricultural sector strong and we cannot just
say it's a new year and it's more costs.It's going to
put us out of business and if we're out of business, then
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you're not going to have the communities in rural Idaho.
I think just back to the personal opinion
and in conclusion, I think most of the growth has been in
the municipal areas and most of this peak power that
they re talking about has occurred through air
conditioning and people in homes.I don't think they
should bear a disproportionate share of the liability,
but I don't think we should be expected to pick up that
liability where we've been stable for 30, 40 years in our
development and that I s all I have.
Thank you.
COMMISSIONER SMITH:Thank you.Are there
questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you for your
testimony.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:We have two people
who signed up, Scott Beck of Burley and Lynn Dille of
Hansen, who had to leave, but reported that they agreed
with the prior testimony of the irrigators and they
didn't feel they needed to stay and speak , which brings
us to Robert Lipskoch.
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ROBERT LIPSKOCH
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name.
My name is Robert Lipskoch
L- i -p- s -k-o-c-
And what is your mailing address?
My mailing address is 380 East 5900 North
Hagerman , Idaho.
Are you here tonight representing yourself
or an organization?
Representing myself and also Bell Rapids
Irrigation.
Very good, thank you.Please continue.
The rates have been discussed quite a bit
tonight and I don I t think I need to go over that and we
all know that an increase is going to put a lot of people
out of business and probably my job if it goes up.One
thing that might help the situation and would help in the
past years and would help in the future is the timing of
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257 LIPSKOCH
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the rate increase to go into effect.Right now this rate
as far as I know should be determined by the end of May,
which normally goes into effect around the first of June.
It's way too late for farmers to do anything about that.
They I ve already got their seeds in the ground, crops are
being fertilized, everything is done.I mean , all that
is left , then , is the cuI ti vation and watching the crops
grow.
You guys might have the ability -- don't
really have the ability to change commodities.You have
a little ability to adjust the prices, but in turn, Idaho
Power will get what power costs.You have the ability to
postpone the increase, I think , if I understand
correctly, if we can have the increase to go into effect
in November , December , somewhere along in there , then we
have the ability to make our changes to our crops and how
we do things to be able to make the next year grow and if
they don't grow , then we know better to not waste our
money and maybe it will save us from going completely
bankrupt before it's too late.
For the last two years , Idaho Power has
been claiming that as soon as we pay off this buy-back
program that, theoretically, it should have been paid by
everybody, but if that would have been true
you know
they keep claiming the rate increase should drop after
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two years and now the two years are up, they're asking
for a rate increase.If two years ago they would have
just told us that rates were going to go up, there might
have been a chance for us to save ourselves and not go
completely bankrupt , but now that this year has already
started , that I s three years that we I re going to be going
in debt.That's all I really have to testify about.
COMMISSIONER SMITH:Grea t , thank you.
Questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioner
Kj ellander.
COMMISSIONER KJELLANDER:Just one.
EXAMINATION
BY COMMISSIONER KJELLANDER:
With the current PCA charge that was in
place last summer, which 'is clearly a substantial
percentage above base rates, when you talk about not
seeing an increase go into effect, would
you be talking
about an increase above what would have been last
summer's PCA rate?
No, sir, I was referring to two years ago
when the power rates were what they should be.
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So you're talking about any increase above
base rates?
Increase above base rates.The PCA rate
should have the ability to go back to where it belongs.
The PCA rate is kind of a non-issue right now.It had
the effect of what happened two years ago with the
buy-back.
COMMISSIONER SMITH:Thank you f or your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Jesus Torres.
Mr. Torres from Burley?
JESUS TORRES,
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.Please state your name and
spell your last name.
My first name is Jesus, J-e-s, last
name Torres , T-r-r-e-s.
What is your mailing address?
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P . O. Box 802, Burley, Idaho.
Are you here tonight representing yourself
or an organization?
I I m here representing Idaho Community
Action Network and some other families that asked me to
be here in their behalf.
Thank you.Please proceed.
Okay, thank you.Okay, the Staff, thanks
for your time , the Commission , people from Idaho Power
and I have a tendency to speak a little loud , so I don'
even know if I should use these or not.
COMMISSIONER SMITH:Please try.
THE WITNESS:Okay, I've been listening to
all the different testimonies and as I was listening to
it, I was just going back and thinking of everything that
has happened and I was thinking of an analogy.I don
know if you give me permission to share it or not.
COMMISSIONER SMITH:This long
(indicating)
THE WITNESS:Just what?
COMMISSIONER SMITH:Just this long
(indicating)
THE WITNESS:Just that long.Okay, I was
thinking of the jungle , you know , how there's always the
prey and predator and sitting here and wondering
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who is the prey and who is the predator.All right, now
the first thing in all this talk about, you know , the
rates going up, myself personally, I'm not a ratepayer
m not with Idaho Power and I'm glad not.m not
saying that I I m happy with everything else that is going
on with the other companies , but I'm glad that I am not a
ratepayer with Idaho Power.
m thinking about the disabled that are
on fixed incomes, that are on medication and I'm thinking
of how or how it's going to affect them or how it will
affect them with the rate Idaho Power is asking for , the
increase that they re asking for.ve been reading some
of the information on it and I think it I S way out of line
and I think that the Commission, with the people that
have been here to ask you would you be sensi ti ve and be
responsive in behalf of everybody that has testified so
far , but as I thought, think about those low income
families.You know , I'm there myself and I know what it
feels like and sometimes I think of when we're having a
hard time in the wintertime when jobs go down and
sometimes you only get one paycheck instead of two and
thinking of wow , you know , here it is for some
families having to all sleep in one room because they
don I t want to use up too much heat , because if they do
then the power bill doubles.
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If they don't pay it all or whatever by a
certain date , it gets shut off , then they get a charge to
turn it back on and I'm thinking here I s all these people
struggling just trying to pay the bill and I think of
some of these executives, high executives, with Idaho
Power that are out there golfing and just having their
little personal private parties and things like that and
just really having a good time.I wonder if it even goes
to their - - if they think about it in their conscience,
you know , as human beings of those that are down there
and saying hey, let's think about the little guy.We'
up here on top, we pretty well call the shots.I mean,
you know , we're almost like a captive audience.We have
a captive audience , we can pretty well roll the dice and
win , win, win , but I think the Commission should really
somewhere has to got to say hey, enough is enough.
I mean, there's people out there that are
doing the very best they can going to the bot tom of the
barrel just trying to get help.There was a gentleman
here that testified, I think he was from the Southwest
Communi ty something, how they help people, I've been
there myself and a lot of times if it wasn't for those
organizations out there that help low income families
that we probably would have been shut off.
I was reading there where almost 1 000
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families were shut off last spring, 1,000 families.You
might think well , really, 1,000 families is not that
much, I mean , that's just a little number and it might be
for some, but for this little area you know , you think
about Burley, Heyburn , Rupert , this little area , 1 000
families, that's a lot when you think about it and a lot
of those families have children.Some of them are sick
some of them need special care and I don't know if any of
you here have ever really been cold, cold , cold because
you couldn't afford to heat.I f you I ve been there, then
you know what I I m talking about , but if you ve never been
there, I'll tell you what, it's no fun when you're just
there trying to get all the blankets you ve got and bring
more of the blankets down here , whatever , because that'
the way it iSi so I'm asking the Commission , please,
think about the low income, think about the senior
ci tizens that are on social security.Think about the
families out there that are on disabilities, also on
fixed incomes.
The cost of living for them , it I S hard
sometimes and I realize that it is for everybody, but it
affects those that are on the bottom of the ladder more
than anybody else and we need to really think about that.
In closing, I would like to thank you for your attention
thank you for the time , and I would just like to leave
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you with the prey and the predator.Sometimes the
predator gets really hungry and he just starts going
after the prey to a point that the prey goes into
extinction and we don I t want people going into
extinction.Thank you.
COMMISSIONER SMITH:
if there are questions.
Thank you.Let I S see
testimony.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:
THE WITNESS:
Thank you for your
Thank you.
(The witness left the stand.
COMMISSIONER SMITH:
Elisa Martinez.
AUDIENCE:
Loya Piedad who lives
m sorry, she had to go.
COMMISSIONER SMITH:Okay, Steve
in Heyburn.
Marshall.
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Publ ic
STEVE MARSHALL
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
Good evening.
Please state your name and spell your
last.
My name is Steve Marshall,
M-a-r-s-I live at 145 North Road , Jerome.
Are you here tonight representing yourself
or an organization?
I represent myself , my brother and my dad.
We farm about 1 800 acres.
Thank you.Please proceed.
I want to thank you for letting me visit
wi th you tonight on this subj ect .Like I said, we farm
about 1,800 acres.Those systems range from canal
systems that we pressurize and sprinkle out of the canals
versus deep well.The canal systems with the canal water
runs about $50.00 an acre.The deep wells that we have
wi th the increase we've had the last couple of years are
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running $125 an acre.Realizing that the same cost of
production for all our crops are the same for each one,
there's a $75.00 an acre hit on the deep wells ground
that we're trying survive off of.
I would like to say Idaho Power has always
in the past provided excellent service.Every time we I ve
had an outage or anything else , they're right there as
far as we're concerned as fast as they can to get it back
running it again , knowing that when it's 100 degrees in
July that your crops need to have the water on them.
do think the farmers the last two years we'had a
pret ty good increase whether paying for whatever we'
paying for you know it I s hi t our pocketbook pretty hard
and we were looking forward to the decrease that we
thought we were ' going to get to make up for some of the
ground we lost, but , unfortunately, it doesn't sound like
that might be in the cards.
Realizing this year is quite a spring,
actually, we wonder why we continue to go on sometimes,
but fertilizer is up, fuel is up, steel is up, PVC pipe
is up, now power is up, the only that's down is what we
get for our crops, but that's the game we play.I don I t
think in the past 10 years ago agriculture has increased
demand on the system because I don I t believe any more
ground has went into production.If anything, it's taken
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out of production.As far as we put in new systems , I
concur with the one fella , I paid $18,000 for a quarter
mile power line to bring into one farm to put power down.
The user I s charge when you put new systems
, you know , it I S $1 000 a pole , thatl s what youl
charged by Idaho Power.m sure the power costs , you
know , Idaho Power's costs went up since 1995.They have
pickups, they have labor , they have fuel costs , I'm sure
they're entitled to an increase.My biggest concern is
the 50 percent demand charge that they want an increase
in and like the one farmer said before , it doesn
behoove us to shut down a well once we kick that demand
charge in because it just hammers us, so if they want a
50 percent increase in that , I think that's the worst
thing could happen to us.
I mean, I think maybe a small increase for
the cost of production probably should be in line , but
that is one area I don I t think would be
- -
I I d like you
to take consideration not to let them have too big an
increase there , and in closing, I don't want to sound
like a swan song, but every year I see more of my
colleagues go out of business and we have tightened our
belt , I think , about as much as we can, but in the last
few years we I re going out of business because of no fault
of our own, quote free trade agreements , which are not
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free at all.
A government official set the beet quota
too high last year that cost every beet grower in our
organization $200 an acrei sending water down the river
to flush fish instead of holding it in the reservoirs to
use in drought years, plus causing our canal companies to
spend as much on legal fees as they do maintaining the
canal system so we can keep our water to farm with, so in
closing, I just want to readdress the demand charge again
and would you look carefully at that and I'm open for any
questions.
COMMISSIONER SMITH:Thank you.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you very much
for your testimony.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Rey Minchey or Rex
Minchey.
Mike Telford.
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MIKE TELFORD
appearing as a public witness , having been duly sworn,
was examined and testified as follows:
BY MS. NORDSTROM:
EXAMINATION
Please state your name and spell your
It's Mike Telford, T-f-o-
Your mailing address?
1450 West Highway 24 , Paul , 83347.
Are you here tonight representing
Myself and my family.
Thank you.Please proceed.
last.
yourself?
I I ve been farming east of Shoshone getting
an education for about 30 years.Prior to that, I
CSB REPORTING
Wilder , Idaho
received something they called an education from Brigham
Young University as an agricultural economist and I would
like to lean on that previous education which was really
cheap compared to the education I I ve been getting the
last 30 years in my testimony tonight.
Agricul ture really is the thing that
drives the state's economy, but in the Magic Valley, the
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eight-county region here, it is the driver.It's, like,
80 percent.m going to throw some real big numbers at
you real fast and talk to you about an economic principle
that gives kind of an overview big picture of some of the
individual testimony that has been so good and I support
everything I've heard all night.The raw product value
of the agricultural production for Minidoka, Cassia, Twin
Falls, Lincoln, Jerome and Gooding counties is - - and
these numbers come from the Uni versi ty of Idaho and some
of these are - - you know , data is sometimes slow coming,
so some of this is 2000 data that has just been put
together as you probably recognize the lag time on some
of these kinds of numbers, but that raw product output
for those counties is 1 340 150 000.If you look at the
process value of that that happens right here, that
number jumps up to 1,962,600,000.
Now , what I want to talk about just
briefly is the principle of the multiplier effect and
think you're probably aware that's the number of times
that a dollar spent in any particular fashion rolls
through the economy and balloons and actually makes it.
It is the engine that drives it.When I was in college
that many 30 some odd years ago that we were talking that
the multiplier effect for a dollar spent by a farmer in
inputs was 11 times.Now that I s shrunk because our
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inputs now come from everywhere and we don't grow it in
our own economy, we bring it in from everywhere else, but
that's still estimated in agriculture to be one of the
very highest and it runs between 3 and 4 percent.I f you
were to take that raw product value of raw product that'
created in this immediate area right here and assume that
90 percent of that is input cost and I can guarantee you,
and I'll point out in a minute, that that would be very
generous and there isn't a farmer in the room that
wouldnl t just be tickled pink to take home 10 percent
when we actually know that the returns are either
non-existent or run from 1 to 3 percent, but if you
assume 10 percent , I'm being very, very liberal, as you
know if you had a roomful of economists and you asked
them all to line up, they'd all be facing a different
direction , so you have to be, you know you have to be
careful of the assumptions and I think I I m being very
liberal with these, that means there's - - if you take 90
percent of that input cost and I'll have the raw - - let'
go to the processed value and take all of it and assume
another 15 percent for the processors because they do
take some profits where farmers don I t, so take a total of
25 percent of that input as input costs , it gives you
000,471 950 that starts to spin in this economy here.
If you just use the three-and-half times
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multiplier effect , that means that's $5,000,151,825
that's spun through this economy if the farmer continues
to farm and there's things to process.Let's assume you
just reduce that by 10 percent by this rate increase, the
actual effect of decrease in inputs and considering that
mul tiplier effect, you III take down in this immediate
area $515,182 000.Now, how likely is that?
testimony is that it's very likely.I have here a whole
series of budgets that were put together by the
Uni versi ty of Idaho that is typical and, of course, they
give assumptions of different crops in south central
Idaho and I scrutinized these and I think they re pretty
darn close.The only thing I would say is the base
assumption on all of these is the guy getting canal water
which is the cheapest source of water in the Magic Valley
and pumping out of the ditch, so these would be the
lowest cost and in every case , depending on how you lift,
it just accelerates and in every case , the net returns
down here are either non-existent or in the deep negative
and you say well , how can that possibly be.
For instance, I'll give you just an
example of one of them which is one of the most common
that we pretty much all have to produce here and for the
sake of time , I'll just talk about this one and that I s
the idea of producing winter wheat in this area and
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that's a pretty good crop in this area and it does very
well and we have fairly good markets, but if you take the
bottom line that they say you get from producing an
average crop and the assumptions are 125 bushel at $2.90,
you'll lose $62.07 an acre.That's for the guy in the
canal.If you take my water costs , that jumps it up to a
loss of $109 an acre , so you say how can that be, nobody
would do it, how can you do that.Well , one of the
explanations is if - - the assumption is that you can
replace no equipment , you can show no depreciation, you
can pay nothing for the land and you ve got to be in
place and have it all and then there's a little bit left
over.
All of these budgets pretty much include
the same thing.The deeper the lifts are , the more
you've already done everything you can possibly do.The
guys that are hit with the deepest lifts have done it
first and then it's worked down the line to the shallower
and shallower lifts , the pumps have been sized, the
irrigation efficiencies have been had, everything we can
do has already been done , so I would just
- -
my testimony
and to save you time , I'll quit here, is that we need to
make sure we're conscious of the big picture because we
are going to put people out of business.It's already
begun , it's already happening as we speak and it is a
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very serious, serious thing for this whole area of the
state and its implications on the whole state eventually,
while somebody can continue to get their full rate of
return and if it kills the goose that laid the golden
egg, you haven I t accomplished anything, so I oppose any
kind of a rate increase.We've got to look at other ways
to keep Idaho Power whole , but we I ve got to keep
agricul ture generally and particularly in Idaho is under
siege from many areas and that I s been testified to and if
we're going to maintain any kind of a future for my sons
and your grandchildren and everybody else in this state
if we I re going to do it in this state, we better pay
attention to keeping our agriculture base together
because it is in real jeopardy right now and we're right
on the threshold of shutting down massive amounts of
ground if we push these costs any further.
Thank you.
COMMISSIONER SMITH:Thank you.Are there
any questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you for your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Lynn Bailey.
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LYNN BAI LEY
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Please state your name and spell your last
name.
Lynn Bailey,l-e-
What your mailing address?
575 West 700 North Paul Idaho 83347.
Are you here tonight representing yourself
or an organization?
Myself.
Thank you.Please proceed.
I I m a small farmer.This is actually my
30th year in business.There I S some interesting things
have happened in those 30 years.The costs in
agricul ture continue to go up and yet, the prices we
receive for our products remain the same.You know that
you've heard that al ready, and I agree with all of the
things that have been said, but there are some things
that I don't understand here.
Idaho Power is a very stable company and
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it has been for years.It's my understanding that they
make right now an 11 percent return on investment.For a
company as large as Idaho Power , that seems to me to be
more than adequate, that's very good , that's a good
return.They also have built into the rate structure the
PCA which allows them to raise the rate on bad snow years
and lower it , supposedly lower it , on good snow years.
Whenever I have a problem with power
Idaho Power has always been very good to get there.The
equipment they arrive with is the latest , the best.
does the job more than adequately.They seem to have
plenty of crews and I think one of the reasons for that
is they are making 11 percent return on their investment,
they're able to make those kind of investments on
adequate equipment.A lot of people have stated that
agricul ture today or their operations , the people who
were speaking, that they are at the point where they
can't absorb any more costs and I agree with that.
That's not an overstatement.It almost
seems to me that, wittingly or unwittingly, the PUC is
enabling Idaho Power to advance their rate structure in
such a way that at some point they will begin to do away
with irrigated agriculture within their distribution area
and I believe that's what Idaho Power's goal is.They
would just as soon not have irrigation customers.It I S a
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lot more profitable for IDACORP to be able to sell the
power to California or to Washington than it is to sell
it in Idaho to the irrigation customers or it's probably
more profitable for them to sell it to residential or
commercial interests in Boise or in the cities where the
growth is taking place, and that I s just a general
statement that I think is the case.
I have a couple of questions or a couple
of points to make about the rate structure and I've only
heard one person refer to the demand increase which is
going to be 51 percent.I can I t believe that Idaho
Power I s costs, distribution costs - - which is that what
demand covers , their infrastructure , is that what it I S
based on?
COMMISSIONER SMITH:m not sure what you
mean by demand charge.There I S a customer charge that'
a flat fee per month and those are to recover fixed
costs.
THE WITNESS:The demand?
COMMISSIONER SMITH:No, the customer
charge.
THE WITNESS:Okay, well , I I m talking
about the demand charge.
COMMISSIONER SMITH:The demand charge on
some classes of large users.
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THE WITNESS:It was my understanding that
for agricultural interests it was going up 51 percent and
I have a hard time believing that their costs have
increased that much.m sorry, I didn t mean to
interrupt you.
COMMISSIONER SMITH:You didn m not
supposed to be talking.m supposed to be listening.
THE WITNESS:You're not supposed to be
talking?Well , forgive me for asking you a question,
then.
COMMISSIONER SMITH:This isn I t the format
for questions.
THE WITNESS:Okay.Al so , I have a hard
time, the meter charge for agricultural customers is
going from $10.00 to $25.00.I haven't heard anyone talk
about that either , but my meter has been there a long
time.You know, they haven't hired anybody
- -
as a
matter of fact, I'm sure that they actually get more
coverage now from one individual who reads the meter than
they used to , so why do they even need to increase from
10 to $25. OO?I don't understand that.
, yeah, I have a question on the PCA,
not a question but a statement.I f the PCA is there as
an automatic rate increase to cover not just low snowpack
years, but it also covers, and from what I understand , it
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covers any time Idaho Power has expenses which are above
and beyond what they had initially anticipated for that
coming year , it helps them to recoup those costs, so it
sounds to me like Idaho Power if they need a rate
increase, the PCA takes care of it and I guess I would
conclude by saying that I agree with what I s already been
said and it really is important for you to look at the
fact that agriculture is being unfairly dealt with in the
power increase and what they re asking for.
I heard someone say that they felt like
well, they wi shed there wasn't going to be a power
increase , but they thought it was going to be inevitable.
I don I t understand why it has to be.Idaho Power is
making a good return on their investment and they are
taken care of by the PCA and the rate that they already
have.Thank you.That's all I have to say.
COMMISSIONER SMITH:Thank you
Mr. Bailey.Let's see if there are questions.
CROSS - EXAMINATION
BY MS. NORDSTROM:
Mr. Bailey, you mentioned that Idaho Power
receives an 11 percent rate of return , did you know that
even though they re afforded this opportunity to earn
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that rate of return that the Company is claiming that
they re earning less than five percent?
Well , it would be my contention that I s
because the holding company, which is IDACORP, sells the
power and then resells it to Idaho Power at an inflated
cost and so it almost looks to me like you should be
regulating IDACORP , not Idaho Power, and maybe that's the
way it works, but I donlt know.
COMMISSIONER SMITH:I think we fixed
that.
MS. NORDSTROM:Thank you.No further
questions.
(The witness left the stand.
COMMISSIONER SMITH:Gerald Tews.
GERALD TEWS,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
THE WITNESS:My name is Gerald Tews,
w-s , 2473 East 4100 North , Filer , 83328.A lot has
been said tonight.m not a complainer , but once in
awhile you have to look at the facts and like the other
gentlemen , people have said that a rate increase will
really be tough to handle.One thing that I wonder about
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is that FMC shut down a couple of years ago, the biggest
user of electricity Idaho Power had , where did that blend
into?Where did that go, the profits off of that,
because that was right down to one-cent a kilowatt or
whatever , real, real cheapest rate, and they can turn
around and blend that in , so there I s a huge profit in
there, and then also we were deregulated when Idaho
Power - - when IDACORP came into existence any way you
want to look at it, and I just can't see where Idaho
Power used to be, all the profits, everything was Idaho
Power , now they have the two companies which they have
the privilege to do to diversify and that's what they
done , so I just can't see where we can stand an increase
of 4.29 or whatever it is.
To me, that I s pretty much determined by
Staff already, that's what we're going to be stuck with
that's their recommendation to you folks and I think
there needs to be a second look at that, and then like
was mentioned, the demand and all the hidden things
that I S in there that I didn I t really realize.We have
all pivots in Filer now and for many reasons, labor , for
water quality, we have to take the silt out of our water
and all of a sudden , why, these rates start to skyrocket
and I personally think that we're all in this together
the stockholders, Idaho Power, IDACORP.They can take a
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hi t , too , we're all taking a hi t .
This thing can turn around, these ag
products can get better , we hope, so I think that any
kind of a raise , I mean , well, really, why should
agriculture get hit with the rate that's being proposed,
15 percent, why not Micron?Agricul ture makes Micron
look puny as far as the economy of the state and they get
these terrific rates and so I think that agriculture
shouldn't be raised any more than anybody else and
really don't think at this time that Idaho Power has
should be able to come in with a rate increase.
they're just making 5 percent, that's better than anybody
else is doing.That's all.
COMMISSIONER SMITH:It I S certainly better
than I'm doing.
Any questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you for your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Kristy Webb.
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KRI STY WEBB,
appearing as a public witness , having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good evening.
When I was using these on the stage, they
were a lot bigger.
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Please state your name and spell your
Kristy Webb, K-r-i-s-y W-
And your mailing address?
2158 Addison Avenue East, Twin Falls,
Are you here tonight representing yourself
or an organization?
m representing the Idaho Rural
Thank you.Please proceed.
first and last.
Given the late hour and the number of
people that probably still want to talk , I'm going to be
We plan on submitting written testimony as
well.As you've already heard and will continue to hear
Idaho, 83 3 0 1 .
Council.
very brief.
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this proposed rate increase will be devastating to low
income families, fixed income families and to farmers.
We echo their concerns and we urge the Commission to take
all possible steps to reduce this hardship.
Tonight I would like to address one
measure that I believe would provide some relief to these
families now and would reduce these burdens in the
future, a progressive demand side management program.
The PUC should require Idaho Power to implement a
progressive demand side management program.It would
lessen the adverse impact on those most harmed by this
rate increase irrigators , those with low incomes and
fixed incomes.It would provide stability in prices,
levelized peaks, diversify the portfolio.There are
many, many techniques that could be used in a good demand
side management program , things such as time of use
rates , cycling, increasing the weatherization and other
assistance programs , a tiered rate structure.The list
goes on and on.You know them as well as I do , many of
these.
Idaho Power is not going to do it if you
don't require them to do it.They haven't in the past,
they I ve dismantled what they had.They have to be
required , they have to be forced to do it.I believe and
the Idaho Rural Council believes that this is one of the
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biggest measures that could be done to make the
difference to these people and they need the help now.
Thank you.
COMMISSIONER SMITH:Questions?
MS. NORDSTROM:None from Staff.
EXAMINATION
BY COMMISSIONER SMITH:
I just have one.m an advocate of
tiered rates, but I think you've heard the testimony
earlier this evening that even the proposal in this case
for summer rates over 800 kW in a month is not popular
and we took a real beating in 2001 when we did that, so
why is it you think tiered rates will fly and who will
they help?
I think that one of the reasons it didn't
fly is because people didn't understand it.
That's true , they didn I
I think that's one of the biggest problems
with any of Idaho Power's demand side management
programs, what little there is, therel s very little
understanding.
But the other thing I noticed is some
people's residential meters put through a lot more
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kilowatt-hours in a month than I thought would ever be
possible for a residence , like 5,000 , so it makes me
wonder what else is hooked up.
I don't know , but I can tell you in my
prior life I worked with (inaudible) for 10 years and
many of these people that talked tonight about the low
income families , they re not exaggerating.We had
families that heated their homes with the dryer.Their
bills are astronomical because they have no
weatheri zation.The equipment is outdated.
COMMISSIONER SMITH:I think I spurred
Commissioner Kj ellander to ask a question.
EXAMINATION
BY COMMISSIONER KJELLANDER:
I III try not to ask it as a question,
how's that, but I guess one of the other criticisms we
received with the tiered structure for residential use
was that we had in this state specifically a good number
of people who only had one fuel source for electricity,
for heating which created an extraordinary burden on them
because there was no way in which they could effectively
lower that rate and they were always in the top tier and
that was an argument that, I think, struck a responsive
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chord, so maybe if there's a question in that is how do
you try to get to some type of fuel source switching that
is cost effective in order for a tiered structure to ever
make sense in this day where you don't have natural gas
distribution more broadly available to a vast number of
customers specifically in rural Idaho?
I think that we need to go beyond the
possibility of gas.I think we need to look at
conservation efficiency measures , those kinds of things
and I think that one thing that could be done with a
good , progressive and creative demand side management
program would be to look at all kinds of different
classes, not just irrigators and the low income families,
but look at all of those different factors.There's huge
opportunities in there and I can't answer the question in
one answer , but I think that conservation efficiency is
one thing that would make a huge difference in that , and
secondly, I think that increasing weatherization
increasing assistance programs for those that are hit
hardest would make a difference as well.It is going to
be harder on those people , the tiered rate structure is
going to be --
COMMISSIONER SMITH:I think now
Commissioner Hansen had a question.
COMMISSIONER HANSEN:I ha ve one
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question.
EXAMINATION
BY COMMISSIONER HANSEN:
We I ve had several people that have told us
that they had put in total electric Gold Medallion homes
because of the promotion of lower rates if it was total
electric, is it fair to these people to all of a sudden
change the course and say now you I re penal i zed because
you use more electricity, where earlier they installed a
total electric home because at that time it was more
economical to be total electric?
Well , maybe a tiered rate structure could
be more flexible, maybe that's one of the answers is to
look at what kinds of measures we can do and reward
conservation measures that are done rather than penalize
the amount that you re using.
COMMISSIONER SMITH:I'll just apologize
for asking the question so that the audience can have a
taste of the debate that goes on at the Commission and
thank Ms. Webb for her testimony.
(The witness left the stand.
COMMISSIONER SMITH:Jerry Callen.
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JERRY CALLEN,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Please state your name and spell your last
name.
m Jerry Callen , C-a-, 500 South
427 West, Jerome.
Are you here tonight representing yourself
or an organization?
I I m here representing myself and two sons.
Thank you.Please proceed.
m going to be kind of brief , have you
ever been in trouble with your spouse?I was supposed to
have been home for supper two hours ago.
COMMISSIONER SMITH:My cows haven't been
fed.
THE WITNESS:I III be very brief.I might
just touch on a few other things that maybe hasn I t been
said here.My dad drilled the first well on the north
side in this area, I think there was some up east here
drilled , in 1948.I was a junior in high school , maybe
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m aging myself , but that's been many moons ago.Since
then I've got three wells of my own , but , you know , 10,
15 years ago, power was no obj ect , the cost of it, but
that's back when potatoes were 5 to $6.00 on a contract
wi th good potatoes , and it's kind of 1 ike the tractor , we
really didn't care how much fuel it burned as long as it
got the job done.Well that's kind of the way we were
with Idaho Power.They were doing a great job, but since
then we have because of Mr. Simplot' s decision to move to
Canada, we have lost over 150 000 sacks of contracts
which is close to three-quarters of a million dollars
total out of our income.
It changed the land from an acre , and now I'
just pulling things out of my head, I hope you don't hold
me to that , where potatoes , a good crop of potatoes,
would probably bring 2 to $3,000 an acre and we're now
down to raising feed for the dairymen which is corn and
hay and grain , which your total per acre might be around
you know , 5 to $600 an acre and that's pretty good , so we
still use as much water on Idaho Power.A hay crop,
potato crop will use about the same water.Almost all
the crops will use about the same amount of water and
power , so that's all I wanted to say is we sure
appreciate what Idaho Power has done over the years, but
we think it's got to -- these profits and expenses are
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just getting closer together where it's been very
difficult to make a go of it.
COMMISSIONER SMITH:Thank you for your
testimony.Let's see if there are questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you very much.
(The witness left the stand.
COMMISSIONER SMITH:Finally, Jed
Wayment .
JED WAYMENT
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Please state your name and spell your
last.
Jed Wayment, W-a-n-t.
And your mailing address?
781 South 250 East of Burley.
Are you here tonight representing yourself
or an organization?
Myself and our corporation , family
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corporation , Wayment Farms.
Thank you.Please proceed.
Thank you for taking the time to go
through these proceedings.I basically would like to
oppose the notion that these increases are needed in
great part due to the capital expenditures paid out by
Idaho Powe r .Our operation uses power from three
different utilities and I watch those costs closely.The
example I'd like to leave you with today is in the dairy
part of our operation , we grow row crops , feed and dairy.
The dairy part of our operation is serviced by Idaho
Power.We are within about 1.2 miles of a local utility
as well.
We looked at bringing three-phase to that
dairy operation which now operates under single-phase
power and we were given a cost structure in 1989.
reviewed that again this last year and then asked our
local util i ty to give us a bid to bring that same
three-phase power to our dairy.Idaho Power would bring
their power approximately . 5 miles, our local utility
would have to go 1.2 miles and the cost was exactly the
same , a 2.4 times increase for Idaho Power to come per
foot for Idaho Power to deliver , to set up their poles
and wires.
Now , I would challenge any business in
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this state to operate with their costs at 2.4 times their
neighbor and ever survive.Simplot can't do it against
McCane's, McCane's can't do it against Lamm Weston , it'
impossible, yet they want 2.4 times the dollars per foot
to bring that power to my operation.Now, to legitimize
this, I would simply like to say that in Rocky Trail'
testimony, I believe he said to lay a quarter mile of new
line was $14 000.Other testimony was given at 18,000
for a quarter mile of new line.Those costs are very
similar to my costs per foot from Idaho Power which are
once again, 2.4 times what my local utility will bring
it.
Now , it would appear , in negotiations it
seems 1 ike if you've seen court proceedings or any other
kind of a negotiation , each party starts at the extremes
and tries to work to their best advantage , not towards
the middle, but to keep things on their side of the
scale , it could be a possible Idaho Power strategy to
simply say we I ve got a low return on investment, but if
you start out with an investment at 2.4 times what it
should be legitimately, I submit that you're going to
have a low return on investment, so if you use that
number , an inflated capital investment of 2.4 times over
a legitimate cost , with a rate of return of 11 percent
which has been purported here tonight, that's a real rate
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of return of 26.4 percent.
If you take the 5 percent rate of return,
which I think was suggested by the panel here and I am
not sure how legitimate that number is because what's the
capi tal investment , but even at that , 5 percent rate of
return against my numbers would result in a real rate of
return of 12 percent.I question Idaho Power'
legitimacy and integrity in stating their capital
investments and their returns based on the numbers I'
gi ven you tonight.Thank you.
COMMISSIONER SMITH:Thank you.Are there
questions?
CROSS -EXAMINATION
BY MS. NORDSTROM:
You mentioned a local utility, is that a
municipal or a cooperative?
It's a cooperative, United Electric
specifically.
MS. NORDSTROM:Thank you.No further
questions.
COMMISSIONER SMITH:And I have none
either.Thank you very much for your testimony.
(The witness left the stand.
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COMMISSIONER SMITH:We have reached the
end of the persons who have signed up to testify.
there is anyone in the audience who has a point to make
which has not previously been testified to or something
you feel was overlooked, you can now come forward and we
will be happy to hear from you.
STAN WARD
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Please state your name and spell your
last.
Stan Ward , W-a-r-I live at 917 East
470 South , Dietrich , Idaho, 83324 , and this point has
been touched on , but Iid like to hit it just a little
harder.I agree with everything that's been said.
operation has the same struggles that every other one
does.Ii ve in Dietrich.Dietrich is a farming area
about six miles square.I farm about 1,400 acres there
and have the same scenarios that have been discussed here
tonight.
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I wonder if in the preparation for an
application for a rate increase if Idaho Power couldn't
be made to consider paring back a little bit.
Somewhere - - I I m sure when they apply for a rate
increase, somewhere at the top of their 1 ist of
justifications are equipment , conservation costs , legal
fees and somewhere down toward the bottom are the things
that the local newspaper illustrated as unnecessary
things and somewhere along there , there must be tree
trimming.
Year before last Idaho Power hired a
commercial tree trimmer to come to Dietrich to trim the
trees back from the power lines , which I understand and
agree is a very justifiable expense because there's a lot
of power loss if a tree limb touches a three-phase power
line, there's a lot of power loss , if not a power outage,
so I understand that that's necessary, but this
commercial tree trimming operation spent the whole summer
there, at least four months with two boom trucks, four
men and a chopper that chops the waste up and so on, the
equipment that they needed.Four men wi th chain saws
could cut up all the trees in Dietrich in a month to
stove length and haul them to Sun Valley, probably, and
split them , and it was kind of the local joke that we
watched this go on all summer unsupervised and I wonder
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if Idaho Power couldn't maybe do a little better on
overseeing the people that they hire to do things for
them like wel ve had to.
We've had to tighten our belts
tremendously to make our operations survive and I wonder
if in asking for a rate increase if you folks couldn
look at their list of justifications and make sure
that - - within your ability.I mean , I didn't see any of
you in Dietrich overseeing the tree trimming operation
but I I m sure that those kinds of things go on and maybe
efficiency isn't someplace that they couldn't maybe
concentrate a little harder.
Thank you.
COMMISSIONER SMITH:Thank you for your
comments.Any questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you very much.
If therel s no -- yes , sir.
MR. WAYMENT:I forgot one critical
component of my testimony.
COMMISSIONER SMITH:Would you please come
forward again?Mr. Wayment, right?
MR. WAYMENT:m sorry, do I have to
swear in again?
COMMISSIONER SMITH:, it lasts.
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JED WAYMENT
appearing as a public witness , having been previously
duly sworn , was further examined and testified as
follows:
THE WITNESS:When I approached the PUC
about this particular disparity between costs, someone in
the office asked , made the statement that sometimes local
utilities subsidize those kinds of facilities.My local
utility has assured me that that is a complete and
legitimate cost.There is no subsidy involved
whatsoever.In fact, one of the board directors as
came up here tonight as I posed that question to him
again said if we can show a justifiable rate of return
that I S above what we expect , we'll actually decrease that
cost, so I think that's an important component.
COMMISSIONER SMITH:You do understand
that the cost structure of a co-op is much different from
a for profit corporation.
THE WITNESS:I do.
COMMISSIONER SMITH:Thank you very much
for that clarification.
Yes, sir?
AUD I ENCE :Can I ask one question?Are
we --
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COMMISSIONER SMITH:After we get off the
record , you can ask your question.Let's finish with the
testimony.It appears that there is no further testimony
to be taken at this hearing tonight.I appreciate all of
you , your attendance, your thoughtful comments and
testimony.It I S something that is important to the
Commission as we move forward.I regret to inform you
that the uncertainty that I understand affects your
business decisions won't be cleared up until the 15th of
May.That's a function of when the case was filed and
the timetable by which the Commission processes the case.
That's our statutory deadline and we intend to meet it.
That being said, the Commission will
recess this hearing.We will reconvene Wednesday, the
17th , at 6:30 p.m. in McCall , Idaho.Thank you for your
attendance.We're adjourned.
(Public Exhibit No. 999 was admitted into
evidence.
(The Hearing recessed at 9:55 p.
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300 COLLOQUY83676
This is to certify that the foregoing
proceedings held in the matter of the application of
Idaho Power Company for authority to increase its interim
and base rates and charges for electric service,
commencing at 6:30 p.m., on Monday, March 15, 2004, at
the Sawtooth Inn Best Western , 2653 South Lincoln,
Jerome, Idaho, is a true and correct transcript of said
proceedings and the original thereof for the file of the
Commission.
idu~
CONSTANCE S. BUCY
Certified Shorthand Report
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Wilder , Idaho
301 AUTHENTICATION
83676