20040326Public Hearing Pocatello.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 .
BEFORE
) CASE NO. IPC-E-O3 -
COMMISSIONER MARSHA SMITH (Presiding)
COMMISSIONER PAUL KJELLANDER
COMMISSIONER DENNIS HANSEN
PLACE:Pocatello City Hall
911 North 7th
pocatello, Idaho
DATE:March 15, 2004
VOLUME II - Pages 41 - 162
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
Bo is e , Idaho 83 72 0 - 0 074
For Idaho Power Company:Monica B. Moen, Esq.
Idaho Power Company
Post Office Box 70Boise, Idaho 83707 - 0070
CSB REPORTING
Wilder , Idaho 83676
APPEARANCES
WITNESS EXAMINATION BY PAGE
Ken Estep Statement
(Publ ic)Ms.Nordstrom (Cross)
Commissioner Kj ellander
Gene Wiggers Statement(Public)Ms.Nordstrom (Cross)
Commissioner Smith
Monty Funk Statement(Public)Commlssioner Hansen
Chuck Buchta Statement(Public)Commlssioner Hansen
Dale Michaelson Statement(Public)Ms.Nordstrom (Cross)
Commissioner Kj ellander
Commissloner Hansen
Commissioner Smith
Gary Hansen Statement(Public)Commi s Slone r Smi th
Rick Poteet Statement(Public)Commissloner Kj ellander
Matt Mickelsen Statement
(Publ ic)Ms.Nordstrom (Cross)
Commissloner Hansen
Commissioner Smith
Michael Mickelsen Statement(Public)Ms.Nordstrom (Cross)
Commlssioner Hansen
Tim Eames Statement
(Publ ic)Ms.Nordstrom (Cross)
Jeremy Smith Statement(Public)Commlssioner Kj ellander
CSB REPORTING
Wilder , Idaho
INDEX
83676
(Continued)
WITNESS EXAMINATION BY PAGE
Paul Mickelsen Statement
(Public)
Kevin Michaelson Statement(Public)Ms.Nordstrom (Cross)100
Commissioner Kjellander 101
Commissloner Hansen 102
Cecil Weisenburger Statement 103(Public)
Kevin Espl in Statement 106(Public)Ms.Nordstrom (Cross)112
Debra Hemmert Statement 113(Public)Ms.Nordstrom (Cross)117
Commlssioner Hansen 119
Commissioner Smith 120
Bob Dye Statement 121
(Publ ic)
Denni s Hobbs Statement 125
(Publ ic)
Mary McCollum Statement 129(public)
Susan Merrill Statement 131
(Publ ic)Ms.Nordstrom (Cross)133
Vickie MaIm Statement 134(Public)Commlssioner Hansen 138
Lamar Isaak Statement 139(Public)
Nick Behrend Statement 143(Public)
Ri tchey Toevs Statement 147(Public)Ms.Nordstrom (Cross)151
CSB REPORTING
Wilder , Idaho
INDEX
83676
WITNESS
Continued)
Neal Powell
(Public)
EXAMINATION BY PAGE
Renee Perschon
(Public)
Statement 152
Statement
Ms. Nordstrom (Cross)
157
160
CSB REPORTING
Wilder , Idaho
INDEX
83676
POCATELLO, IDAHO , MONDAY, MARCH 15,2004 , 1:00 P. M.
COMMISSIONER SMITH:Good afternoon
ladies and gentlemen.This is the time and place set for
a public hearing in Idaho Public Utilities Commission
Case No. IPC-E- 03 -13.This is 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.
We I re very pleased by the turnout here
this afternoon.I I II introduce myself.I I m Marsha
Smith.I I m one of the three people that compose your
Idaho Public Utilities Commission.On my left is Paul
Kj ellander.Commissioner Kj ellander serves as the
President of the Commission , and on my right is
Commissioner Dennis Hansen.The three of us are the
Public Utilities Commission and we are the people who
will be making the decision in this matter.
At the end of this month we will undertake
about two weeks of what we call our technical hearings at
our Hearing Room in Boise where we II listen to
accountants and rate analysts and engineers and lots of
lawyers and we II discuss the technical details of the
case, but part of our deliberations includes taking
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Wilder, Idaho COLLOQUY83676
comments from customers and members of the public and
that I s what we I re here for today.
The first thing I want to do is identify
the parties to the case that are in the room and we'll
start with Ms. Nordstrom.
MS. NORDSTROM:Thank you.My name is
Lisa Nordstrom and I I m a Deputy Attorney General for the
State of Idaho representing the Commission Staff in this
matter.
COMMISSIONER SMITH:Thank you, and for
the Company.
MS. MOEN:For the Company, I'm Monica
Moen, an attorney in the legal department at Idaho Power
Company.
MS. SCHWENDIMAN:m Celeste Schwendiman.
I I m an analyst in the pricing and regulatory group.
COMMISSIONER SMITH:That I s okay, Celeste.
Both , I think , the Company and the Staff have analysts
here so that if you have particular questions about your
bill or your circumstance, they have people who can take
that up, not as part of the hearing, but on the side
after the hearing.
I I d al so I ike to recogni ze the Mayor of
Pocatello, Mayor Chase, pleased to have you with us and
we I re very pleased to have the use of your fine facility
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Wilder , Idaho
COLLOQUY
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here.We'It looks like it's going to be just fine.
also doing something today at this hearing that we
haven t done before and apparently, we are now live on
some sort of local access channel on television , so if
you get tired of sitting here watching us, apparently,
you can go home and see us on your TV , so while you
testifying, you'll be on TV.
The way we work our process is I will call
the names of people who have signed up to testify.You
will come forward and be sworn.You 'll be asked to raise
your right hand and promise to tell the truth.Then
Ms. Nordstrom will ask you a couple of questions.Maybe
after you see it done a couple of times , everybody will
know , what we need is your full name and your mailing
address, and that I s what we need to have you identified
as part of our official record.We have a court
reporter.
All of our proceedings have to be based
upon the evidence that we receive.We cannot make a
our decision has to be based on the evidence that we are
given and not on anything else, so that I s why it'
important that your testimony be recorded accurately.
Commissioner Kjellander will give the oath, so we'll
begin with Ken Estep.
CSB REPORTING
Wilder , Idaho
COLLOQUY83676
KEN ESTEP,
appearing as ' a public witness, having been duly sworn
was examined and testified as follows:
a --
THE WITNESS:My name is Ken Estep.
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.Sorry to interrupt, I
have to do my little part here, so please state your name
CSB REPORTING
Wilder , Idaho
and spell your last name for the record.
Kenneth L. Estep, E-
And what is your mailing address?
My mailing address is P.O. Box 49 , Arbon,
And are you here representing yourself
today or some other entity or organization?
I am here as Commission Chair for the
Power County Commissioners.
Thank you.Please proceed with your
First of all I want to thank you folks
for the job you do.I know there aren I t a lot of thanks
Idaho, 83 2 12 .
testimony.
ESTEP
Public83676
but what I'm going to do is I'm more or less just going
to read a letter that we will be sending to you from our
full commission.Dear Sir or Madam:We are writing
concerning the proposed rate hike for the Idaho Power
Company.There are several areas of the rate increase we
feel need to be looked at very carefully.The rate
increase in general will affect our county, but it
appears to affect our irrigated farmers dramatically.
understand the need to spread the increases fairly over
customers by usage and needs that the Company - - and the
Company needs to pay its bills.However, it appears that
the rate increases are being unfairly targeted at
irrigation even though their usage hasn t gone up
measurably and there have been very few new wells dug in
our county in recent years.It seems the large
residential growth in some parts of the state is very
likely a good source of the needs for the increased
production and for handling the spikes in power usage.
In reading comments from some of the
advisors , we see a real need to keep the division between
Idaho Power and IDACORP separate.It must be a very hard
line to walk to make sure that the wrong part of the
customers , that they re not paying for the profit side of
IDACORP.I don I t envy that.At this time Power County
has to question the new plant in Elmore , the gas-fired
CSB REPORTING
Wilder, Idaho ESTEP
Public83676
plant, and the reason for that is simply we had a 600
megawatt plant that was going to come into our county and
they have, well , they've canned that operation because
they can I t afford to come in because they cannot be
competitive in the marketplace, which tells me that a
smaller plant going in there with still high natural gas
prices , somebody is going to absorb that and I think it I S
going to be the ratepayers.
We ask that you scrutinize the rate
increases very carefully.In reading Staff reports,
there may be many of the costs put into the request that
have no business being passed on to the customer.
hope you study very hard on the irrigated power because
that increase appears to be very heavy on a small part of
the state I s population who have no ability to pass it on
to the consumer , and just to let you know , we visited
wi th some of our irrigated farmers and I haven I t talked
to the real large ones, but some of the mid-sized
farmers, they I re talking huge amounts of dollars that
they I re going to have to come up wi th if they get hi
wi th this as it I S proposed and so please go through it
very much.Thank you.
COMMISSIONER SMITH:Mr. Estep, the one
point I neglected to mention was that now that you
made a statement, there are people here who have the
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ESTEPPublic83676
opportunity to ask you questions.
THE WITNESS:Okay.
COMMISSIONER SMITH:So I will find out if
there are any questions for Mr. Estep.
MS. NORDSTROM:Thank you.I just have
one.
CROSS-EXAMINATION
BY MS. NORDSTROM:
You mentioned concern about the new power
plant in Elmore County, which one are you referring to,
the Danskin Power Plant or the Bennett Mountain?
Okay, not the one that's already in place
and production, the one that was just approved.
MS. NORDSTROM:The Bennett Mountain
facil i ty.Thank you.
COMMISSIONER SMITH:Any questions from
the Company?
MS. MOEN:No questions.Thank you.
COMMISSIONER SMITH:From the Commission?
Commissioner Kj ellander.
COMMI S S IONER KJELLANDER:Just one
question.
CSB REPORTING
Wilder, Idaho
ESTEP (X)
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EXAMINATION
BY COMMISSIONER KJELLANDER:
In your discussions with the irrigators
was there any discussion of a percentage increase the
irrigators might be able to deal with based on their
review of the case?
You know , that was not mentioned.They
did say that they knew that they had to shoulder their
fair share.I think there I s enough of them here today
that they can probably give you the exact figures on
that.We didn I t go there in our talks.
COMMISSIONER KJELLANDER:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:The next person on my
list is Gene Wiggers.
AUD I ENCE :Could you turn the volume up?
We I ve got so much air noise we can't hear.
COMMISSIONER SMITH:Okay, we II see.
don I t know how to make that happen , but Mr. Law is on the
case.
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Wilder , Idaho
ESTEP (Com)Public83676
GENE WIGGERS,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.
Hi.
Please state your name and spell your last
name for the record.
Derald , D-r-a-, Eugene, Gene,
Wiggers , W-s, 1854 South Fairway Drive
Pocatello.
Are you representing yourself here today
or some other organization?
I I m representing AARP Idaho.
Thank you.Please proceed.
Good afternoon.I I m a lead volunteer for
AARP Idaho and AARP Idaho speaks to the interests of all
Idahoans over the age of 50 , but specifically, represents
our more than 153, 000 members.
I want to thank and commend you today for
giving the public this opportunity to comment on Idaho
Power I S application to increase rates by $86 million.
CSB REPORTING
Wilder , Idaho WIGGERS
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AARP's membership has a vested interest in ensuring that
energy services are readily available for consumption at
prices that are just, reasonable and affordable.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
to those living on fixed and low incomes.
Al though older Americans consume
approximately the same amount of energy as do younger
people , we spend a greater proportion of our income and
devote a higher average percentage of our total spending
to residential energy, 14 percent.Too often these older
families are forced to choose between risking their
health and comfort by cutting back on energy expenditures
and reducing spending for other base necessities such as
heal th care or property taxes.AARP Idaho does not
consider these to be viable options.
For this reason , we urge the Idaho Public
Utilities Commission to be guided by two specific
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Wilder , Idaho
WIGGERS
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principles which ensure that residential consumers pay
only their fair share of energy costs.The principles
that AARP deems most critical for residential consumers
are:, reliable, uninterrupted service and 2
affordable rates, so we urge you to take a hard look at
the Company I s filing.
AARP Idaho also urges the Commission to
ensure that adequate funding is available for bill
payment assistance programs for low income homeowners in
our state.Similarly, the Commission must ensure that
consumers are aware of the availability of these
assistance programs in order to maximize public
participation.With 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 seek nor
receive the help that they desperately need.
We trust this testimony has provided the
Commission with valuable insight into these important
issues.Thank you again for this opportunity.
COMMISSIONER SMITH:Thank you
Mr. Wiggers.Let I S see if there are any questions.
Ms. Nordstrom.
MS. NORDSTROM:Thank you.
CSB REPORTING
Wilder, Idaho WIGGERS
Publ ic83676
CROSS-EXAMINATION
BY MS. NORDSTROM:
You mentioned bill payment assistance and
awareness of the programs that are out there, in your
experience , have older citizens , are they knowledgeable
of what assistance is available and are able to access
it?
It depends upon their ability and their
health.Those that have the ability to think clearly
have assistance and have good health often times know
that the agency on aging has information on this and
refer to them.Those who don I t suffer and sometimes
greatly.
MS. NORDSTROM:Thank you.No further
questions.
COMMISSIONER SMITH:Ms. Moen , I guess
I I II just assume you have no questions unless you give me
some signal.
MS. MOEN:That I S appropriate.Thank
you.
COMMISSIONER SMITH:Are there questions
from the Commission?
CSB REPORTING
Wilder , Idaho WIGGERS (X)
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EXAMINATION
BY COMMISSIONER SMITH:
I guess I had one and you mentioned those
heating assistance programs and the main one seems to be
a federal program that we all know as LIHEAP and in some
states in addition to the federal funding, the state also
provides some funding to the program and I I m wondering if
that I S something AARP thought would be useful to pursue
getting state funding into LIHEAP in addition to the
federal funding that I s already provided.
In the general area of utilities of all
kinds , we do feel that both state and federal assistance
should be available.We're watching our fixed incomes go
down and down , gasoline prices are going up, health care
is going up, prescription drug medications and on and on
and on and as we see that, our fixed incomes go down and
down and down , and as we think of the things we dreamed
about all through our lives at retirement, visiting our
families, going on vacations, they just disappear in the
dust.
Well, I guess I would just suggest, then,
that if that I s something your organization feels is
worthwhile and would support that you ought to contact
your state legislators and start working on that
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Wilder , Idaho
WIGGERS (Com)
Public83676
actively, because I think unless it I S a grounds -up kind
of thing, it I S not going to happen.
We are.We have a group in Boise that
constantly is doing that lobbying and so forth , so we I re
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Wilder, Idaho
active in that area.Thank you.
COMMISSIONER SMITH:Thank you for your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Monty Funk.
MONTY FUNK
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
last.
Funk , F-
Good afternoon.
Good afternoon.
Please state your name and spell your
My name is Monty Funk.Last name spelling
And your mailing address?
2254 County Line Road , American Falls,
FUNK
Public83676
Idaho.
Are you here today representing yourself
or some other organization?
m here today representing my family
farm, myself and my neighbors.
Thank you.Please proceed.
Yes, thank you for your time.Thank you
for hearing our testimony here today.I would like to
just first point out that we I re large irrigator users in
the American Falls/Aberdeen area and I am adamantly
opposed to any sort of rate hike increase whatsoever with
Idaho Power.In the last less than 10 years, we I ve lost
a very large amount, percentage of our grower base.The
Idaho potato grower is becoming - - they re going to have
to put him on the endangered species list if this
continues, the trend continues , like it has.
I would also like to say that a lot of
these processing companies that were in our area
southeastern Idaho , meaning potato processing plants, are
moving out, are moving to Canada.I don't know the
specifics of the agreements that the government has made
with them , but it I s obviously a lot more attractive and
lucrati ve to go to Canada and therefore , rip the
heartland right out of southeastern Idaho and that I s what
ve observed in my 20 years of farming and we basically,
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FUNK
Public83676
you know , it's just a domino effect from plants like
FMC/Astaris , they shut down.We have - - you know, their
tax burden in Power County has got to be picked up from
somebody.You know , we've got a double whammy.We'
got that tax burden, plus we've got the other.
We also face just in the last years going
into the year 2004 , we've come off one of the worst
droughts we I ve ever had in history or we've been in about
a, I believe, three-year drought, two to three.I mean
our fuel prices, unless we're all blind and don I t see
them when we come into town , they I re astronomical.
Farmers get no break.Our fertilizer prices follow fuel.
There's some fertilizer companies won't even quote us
price on nitrogen fertilizer today.We don I t know what
re going to put on our crops this spring and summer.
Our labor , you know, I mean , everything is a cause and
effect type of thing and we have not had an increase in
our potato contract since 1995.It's been going down and
I would just like to simply say that it I S a very serious
situation.
IDACORP , and this I'm a little vague
and I looked and looked and looked and looked , but I read
in a Fortune , I believe it was a Forbes or Fortune , one
of the magazines, we I ve got IDACORP on this end that are
posting record , I don't know how many dollar percentage
CSB REPORTING
Wilder, Idaho FUNK
Publ ic83676
profits on this end , and whatever they're doing with
Idaho Power over here , I don t know, but I know that our
farm has been in existence for 96 years, might be the
last, I'm not posting any record profits, nor have had
for the last, you know , quite awhile, and I would just
urge the Commission to know that this is very serious and
we would like, you know , your full, obviously that you
will, in-depth look into this because my farming
operation with my family, we cannot absorb whatever , 15,
We're simply, we're probably, at best, going to22.
tread water and go behind again and that aIl really, I
have to say.
COMMISSIONER SMITH:Let I S see if there
are any questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
just have question here.
Yes,sir.
By the law the Company allowed a fair
rate return and once the Commisslon determines what
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FUNK (Com)
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that fair rate would be, do you have a problem with the
rate being set for irrigators at their true cost of
service, at what it costs?Once that's determined in
black and white, do you have a problem with your rates
being set at the true cost of the Company to serve you?
I guess I'm a little bit misled.That
kind of depends on my costs or their costs?I mean
we're talking about we ve got to make sure that we've got
to protect Idaho Power and keep them profitable right
that what you mean?
That's true, let me just explain.By the
law , the Company is allowed to make a profit.
Right.
And so once the amount is determined, then
it has to be allocated to the residential customers, the
business customers and the irrigation customers and my
question to you is, and I know , I understand the problem
that you face as an irrigator , but I'm just asking the
question once it I S determined what the fair cost is of
the Company to serve you as an irrigator , if that I s
determined and if it's determined that's correct , do you
have a problem with that rate being set for the
irrigation customer?
Well, Mr. Commissioner , I can't answer
that question directly and here's why:Because I don'
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FUNK (Com)
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know how much money is being sucked out of Idaho Power to
IDACORP to boost their record profits, so if I own , you
know , two different farms, A and B , if I have farm A over
here that I left it down and it was guaranteed a profit
and I continually poured money out of it to boost my nest
over here, I don I t know the in-depth of the way IDACORP
and Idaho Power work back and forth.I really can't
answer that question , because right now I don I t know - -
mean , I know that a few short years ago they both stood
record profits and in one of the Forbes or Fortune
magazine numbers it was a quote, I believe it was one of
the highest they had in the country, so I'm sorry, I
can't answer your question.
You are concerned more wi th the IDACORP
and the Idaho Power as far as their profit?
I I m concerned about feeding my three
children , but yes, you I re right.I don't know the
internal workings so, therefore, I can't give you an
accurate answer on how - - what is a fair rate of cost for
Idaho Power.I don't know , I'm sorry.
And that has to be determined and that'
what we're looking at.
Right.
COMMISSIONER HANSEN:Thank you.Tha tI
all I have.
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FUNK (Com)
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testimony.
COMMISSIONER SMITH:Thank you for your
(The witness left the stand.
COMMISSIONER SMITH:Chuck Buchta.
CHUCK BUCHTA,
appearing as a public witness , having been duly sworn,
CSB REPORTING
Wilder , Idaho
was examined and testified as follows:
EXAMINATION
Good afternoon.
Hi.
Please state your name and spell your last
My name is Charles Walden Buchta.My last
BY MS. NORDSTROM:
name is spelled B-u-
And what is your mailing address?
3122 West 2100 South , Aberdeen, Idaho.
Are you here today representing yourself
or some other organization?
I I m here to represent Knudsen Farms.
Please proceed with your testimony.
Good afternoon.
for the record.
BUCHTA
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COMMISSIONER SMITH:Good afternoon.
THE WITNESS:, like Monty, am an
irrigator.ve been aWe have farmed for 30 years.
part of the farm for 20.It isn't so much for me -- I
understand the business needs rate increases.I think
irrigation has been unfairly targeted for a 25 percent
increase.We are
- -
farming is being hit on all sides
wi th cost increases.There is no input cost this year
that will be less than what it was last year and then for
Idaho Power to hit us for another 25 percent, I'
estimated on our farm alone, and our farm is a modest
farm , that that will be $37 000, just an estimate, and we
are a mode s t f arm anymore.We only farm 2,500 acres.
Most of my wells are either shallow, short
poles or canal , so when you take the farms that are
further west that are pulling from deeper , from
3 or 400 foot depths, these increases could well put them
out of business , and when you look at Idaho overall,
Idaho is still an agricultural state.You start chipping
away at the bedrock of Idaho, which is agriculture,
because all of our help, all of our wages, they come to
town and they spend their money, all these people pay a
power bill, also , so if we take the farmer out of the
picture, eventually we will have a very negative effect
on Idaho s economy as a whole.
CSB REPORTING
Wilder , Idaho
BUCHTA
Public83676
We employ large amounts of people and they
all come to town and spend their money.My biggest point
is I just think that we have been unfairly targeted for
the 25 percent.No other category in the power is going
to take that kind of a hit and as I've sat down this year
and tried to budget out my farming, I'm appalled at
what - - of where it's going.As Monty said , we will
become less and less a factor or it will be huge
conglomerate farms that set their prices.I guess that'
about all I have to say.
COMMISSIONER SMITH:Let I S see if there
are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Any from the
Commission?Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
The question I have, if rates were set at
a lower rate on off peak times for the irrigation
customer because we do know that peak power , certain
times of the day when they have to buy power on the
market, it's fairly expensive, could you perform your
same irrigation procedures and get approximately the same
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Wilder, Idaho
BUCHTA (Com)
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yields from your crops if you were to shut your pumps off
four hours a day when the peak time might be and that way
you would get a lower rate , does something like that
appeal to you as an irrigator?
Yes, if we could have a lessor increase,
I I m sure that we would work with Idaho Power, because
like you said, there I s times, our pumps don I t irrigate 24
hours a day.There I s times that they I re off and we could
make those times hit their peak, I I m sure.We could
cooperate with them if they could cooperate with us.
COMMISSIONER HANSEN:Thank you.
COMMISSIONER SMITH:Thank you for your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Dale Michaelson.
DALE MI CHAELSON ,
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.
Hi.
CSB REPORTING
Wilder , Idaho
MI CHAELSON
Public83676
Please state your name and spell your
last.
Dale Michaelson , M-h-a-e-I-s-o-n.
And what is your mailing address?
3929 Rast Road, American Falls , Idaho.
Are you here today representing yourself
or an organization?
I I m mainly here representing our family
farm and some area farmers.
Thank you.Please proceed.
Thank you.Thank you, Commissioners, for
allowing us to take - - for taking testimony on this
proposed power increases, such as the 51 percent increase
demand charge for irrigation, 25 percent increase
kilowatt base rate for irrigation, 247 percent increase
for monthly service charge for irrigation, 19.03 percent
increase for base rate energy for residential and 400
percent increase for residential monthly service charge,
while a mere 8.23 average increase for special contracts,
Micron , J. R. Simp lot and Department of Energy to name a
few.
First , I would very much like to thank the
PUC Staff for the many hours of searching the testimony
given by Idaho Power for such a proposal and finding that
$42.9 million in expenses that Idaho Power was trying to
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Wilder , Idaho
MI CHAELSON
Public83676
pass on to the ratepayers, 357,000 Idaho Power was going
to charge ratepayers for legal fees and extensive
membership fees , 246 000 due to Edison Institute, a lobby
organization for power companies.This is all according
to the Idaho Statesman dated 3/02/04.Thank you.
In reading William Avera I s testimony, 88
pages, he seems intent on providing a scenario that Idaho
Power needs an average of nearly 11 percent return on
dollars spent to achieve a triple A stock rating in order
to attract investors.In this current economic growth
rate , 11 percent would seem to me as a phenomenal return
and would have huge advantage over other utilities.
Since the Enron Power fiasco and
California , I believe most all utility stocks have been
downrated.Idaho Power seems intent on letting their
ratepayers finance such a maneuver.In part of their
written testimony, they propose a $6 million expansion in
Mountain Home for another natural gas-fired plant.
this time the cost natural gas an all time high.
Such ventures from other companies have been wi thdrawn
such the one American Falls just short time ago.
Commissioner Estep alluded to that.
Many utilities such as sewer require a
hookup fee typically around a thousand dollars or more
depending on the jurisdiction.This money goes into a
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Wilder, Idaho
MI CHAELSON
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special account usually called an enterprise fund.
may only be spent for capacity expansion, such as
building a new treatment plant.At the same time , all
the money from the monthly sewer bills go into
maintenance and operations.None of it is commingled
with expansion funds.This way growers pay for its
this way growth pays for itself and existing customers
don't have to pay to fund all related expansions.
Doing it any other way would be grossly
unfair and potentially make it difficult to pay for
expansions.Yet , that is exactly what Idaho Power does.
Because they don I t have hookup fees, they must go to
existing ratepayers for new plants and distribution
lines.This is especially unfair because we are, in
effect, asking farmers in small towns to subsidize
expansion in urban areas.Irrigators have been paying
for their line conversions mostly from side rows to
pivots for several years now at the sum of $33 000 per
quarter mile, whether the line goes up or comes down.
Growth and expansion in urban areas is
good.It opens up new markets for farmers and we support
that.FarmersAll we I re asking is to be funded fairly.
have a good record of conservation as in efficiency
testing of wells and near to no increase in demand
because of the moratorium on additional well drilling for
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MI CHAELSON
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the past five to eight years.Farmers do not create the
need for new power plant capacity, but we are being asked
to help pay for it.
Idaho Power once had a conservation method
in their residential power rates.I do not see that in
my home power bill today.Idaho Power needs to adopt
fair practices that other utilities have.It should put
the burden of paying for growth where it belongs , on
those who are generating the demand for growth.
Using the proposed base rate and demand
charge increase would nearly add $40,000 to my operating
line that has already been approved for this year.The re
is no room , zero, in my margin for such an increase
zero.I maintain I will - - one of the conditions of my
loan is I maintain a zero margin to continue farming.
This will surely put me out of business , as it will my
neighbors who have spoken to me on this very subj ect .
This increase will have dramatic effects
on cities , schools , tax base revenue for Idaho and will
likely promote foreclosures and displace people like no
one has seen before.According to the Northwest and
Conservation Council dated , Idaho State Journal dated,
3/03/04, Judy Danielson states the Pacific Northwest
should have more than enough power for the foreseeable
future.The costs of it should remain stable.I do not
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MI CHAELSON
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understand Idaho Power I s proposal for this huge rate
increase with such a report the first part of March.
I I m an Idaho irrigation farmer.m in
protest of such a base rate increase in demand on
irrigation.We didn't cause the demand increase during
the summer usage.I I m also concerned about the method by
which any increase is distributed.Thank you.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.
CROSS -EXAMINATION
BY MS. NORDSTROM:
Yes , I just was curious what type of
irrigation you use, whether you pump from deep wells or
more shallow.
all deep well, yes.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:Any from the
Commissioners?Commissioner Kj ellander.
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MICHAELSON (X)
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EXAMINATION
BY COMMISSIONER KJELLANDER:
Sir, have you participated in any of the
deep well programs that I believe the power company has
been working on over the last year or so?
Yes, we ve been involved in a lot of their
proj ects.In fact, we're looking at some of their off
peak shut-offs for this coming year.We think that has
merit on non-row crops.It I S my understanding as it was
explained to me it would be only one day a week.Now,
when I first heard about it, it was five days of the
week , but last I've been reading, it I S one day a week, so
I don I t know where we re at there, but yes, we I re going
to participate in that on a non-row crop feature on the
pi vat scenario, because with our new technology of
rainbirds and non-impact rotators and stuff, we feel like
we can afford that kind of downtime.
But you participated in the ones in the
past is that correct?
Yes, we've done efficiency tests on our
wells and stuff.
This would be a similar question that
Commissioner Hansen asked earlier and I guess I'd like to
put that to you and that is, when you were engaged in
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MI CHAELSON (Com)
Public83676
those programs, did you see any kind of yield reductions
that you could tie to participation of the programs or
were yields pretty consistent?
I think before we would jump into a
program , we would weigh those factors very heavily as to
whether - - because one thing, our margins are so small
now that we cannot afford any degradation t a our crops,
so normally when we go into one we have already figured
out what c an so we do not have any that crop
degradation.
COMMISSIONER KJELLANDER:Thank you.
COMMISSIONER SMITH:Did you have a
question?Go ahead.
COMMISSIONER HANSEN:Just one quick
question.
EXAMINATION
BY COMMISSIONER HANSEN:
How would you rate the quality of service
you receive by Idaho Power?
How would I rate the service?Excellent.
The people that are in my area that I grew up with there
are starting to retire now , they knew our problems, they
knew our
- -
local people we knew we could call on.Now
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Wilder , Idaho
MICHAELSON (Com)
Public83676
most of our calls go into , I believe it's, Boise or
somewhere and they call two or three or four people down
the line.I I m not sure how or why that make s it better
for them.don'know it'recordkeeping or what
but I know we I re not to call our local people anymore and
get, you might say, instant service.I don t know if
it I s good or bad or different.I think we still get the
service , but it takes four or five phone calls now where
before it may only have taken one or two.
COMMISSIONER HANSEN:Thank you.
EXAMINATION
BY COMMISSIONER SMITH:
And I just want to thank you for your
comments about how to save up and pay for new supply and
to let you know that one of our constraints is decisions
by the Idaho Supreme Court , and in the past when a prior
Commission tried to assess another utility a charge of
$50.00 a kilowatt-hour when they hooked up to set aside
for new supply, the Court struck that down , so that's not
a tool that's currently available to us.
Could we apply for that again?
Well , we actually did in a water case and
we lost again , so I don I t think I I m going back to
CSB REPORTING
Wilder, Idaho MI CHAELSON (Com)
Public83676
It's strange , they 'd have --
They said it was discriminatory.
- -
I I m going to use the word
foresightedness to know that we're going to need future
CSB REPORTING
Wilder , Idaho
COMMISSIONER SMITH:They felt it was
expansion.
discriminatory, so thank you for your testimony.
THE WITNESS:Interesting.Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Gary Hansen.
GARY HANSEN
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.
My name is Gary Hansen , H-a-n-s-e-
address is 230 East 700 North , Rupert , Idaho.
Are you here today representing yourself
or an organization?
I represent myself and a family farming
HANSEN
Public83676
organi za t ion.
Thank you.Please proceed.
I didn't prepare a prepared text, but I
just did some numbers this morning on our own family
operation.We farm and live out north and east of Rupert
on what I s called the A & B Irrigation proj ect and our
water in most cases is lifted to the surface and from
that point we pressurize it.In many ways that's an
advantage because we don I t have to pay the costs on our
own farm directly of the lifting, the district pays those
costs , and I believe that their power source right now is
wheeled through Idaho Power, but not supplied by Idaho
Power therefore, we're somewhat insulated from this
price increase, but last year doing some work on our own
operation, finding that my power costs to pressurize our
land under the A & B area in the Idaho Power area our
costs went up 17.5 percent.
The crops that we raise are sugar
potatoes and grains, all of which are deemed being public
enemy number one by Dr. Atkins and we find some response
by the public in buying those commodities.I n our
operation we've lost money the last couple of years.
Cost containment seems to be our only solution.We are
not able to pass our costs on to consumers as other
businesses sometimes are able and in managing those
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Wilder , Idaho
HANSEN
Public83676
costs, we've done a lot of things in the last few years
in the irrigation side by spending capital to convert
from high pressure sprinkler situations to low pressure
sprinkler situations.
We have been aided and assisted by Idaho
Power.At least one event I remember particularly where
we changed the pump station and lowered our horsepower
required by various low pressure pivots in the irrigation
systems.Last year we changed another pump station and
these in effect have helped us lower our costs and our
demand charges , but our costs still went up 17.5 percent
last year.As to a future increase , I'm not sure where
to pass this cost on.As I said, we are losing money,
last year.'ll lose money again if we continue to have
cost increases with no way to recapture them.
Another observation is that the
installations of the Idaho Power system to service the
A & B wells were done in the ' 50s.Most of those
installations are still there, the same poles and the
same wires that service those same stations that we use
now to pump pressurized with, also and it just seems very
difficult to me to understand why those costs would rise
so dramatically.Also, any time we've had to add a new
station , we've been charged a substantial fee for the
design of the station and any other costs that were
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Wilder, Idaho
HANSENPublic83676
incurred to put that station in on an up- front basis and
so the costs we felt were already paid for on any new
demand or station that we would put in.
In summary, then, I would go on record as
being opposed to the cost increase.
are questions.
COMMISSIONER SMITH:Let's see if there
THE WITNESS:Okay.
MS. NORDSTROM:Not from the Staff.
EXAMINATION
BY COMMISSIONER SMITH:
I just had one and that's to help us, we
always struggle with where to have hearings and when to
CSB REPORTING
Wilder, Idaho
have hearings and how many to have and I noticed you
drove here from Rupert?
Yes.
And I would have thought Jerome would be
Yes, the timing was I couldn I t be there
this evening, so I came here.
COMMISSIONER SMITH:All right, thank you.
(The witness left the stand.
COMMISSIONER SMITH:Rick Poteet.
closer.
HANSEN (Com)
Public83676
RI CK POTEET
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
THE WITNESS:My name is Richard
Poteet , P-e-e-I reside at 788 East 800 North
Rupert , Idaho.
EXAMINATION
BY MS. NORDSTROM:
Are you here today representing yourself
or some
I m representing myself and my father.
Thank you.Please proceed.
It's a pleasure to be with you this
afternoon to be able to perhaps discuss a few of the
issues that pertain to us as production agriculturalists,
if you will.My main reason in chatting with you today
is not to present any perhaps new information , but rather
to concur with those things have already been mentioned.
, like Gary Hansen , live in the Minidoka area wherein
it's very difficult for us to try to work with some of
the proposed plans with Idaho Power of trying to turn off
water during a peak portion of the day.We're receiving
CSB REPORTING
Wilder , Idaho
POTEET
Public83676
water from one source and then trying to pressurize it
from another.
We're working with two different utilities
on the very same line and as such , that becomes an
impossibility for us to go ahead and then send that very
costly water, which you've probably read in the
newspaper, down the drain, if you will.We are faced
with a plethora of issues concerning production
agricul ture in southern Idaho and with this coming at
this time, it doesn't work well for us.
For many of us who came here wi th my
father some 30 some odd years ago, we signed contracts
when you went ahead and put in a new facility and if you
signed the contract and would use electricity for
years or more , those things were paid for.We now have
up- front costs any time we do anything new and yet
they're looking at expansion of our demand price, 51
percent.We personally have nearly 20 meters on our
small farm.We have some homes, weWe have 2 500 acres.
have several pumping facilities.25 meters , a $10.
charge seems like quite a bit since we purchased the
meter when we put in the facility and now we're being
charged $25.00 for the opportunity to use those.
Again , my main purpose is not to reiterate
or to be redundant concerning the things, but to place my
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Wilder, Idaho
POTEET
Public83676
name as one of those who is in adamant opposition to a
proposed price hike.
COMMISSIONER SMITH:Any questions?
MS. NORDSTROM:None the Staff.
COMMISSIONER SMITH:Commissioner
Kj ellander.
EXAMINATION
BY COMMISSIONER KJELLANDER:
The crops that you grow , are the crops at
all impacted by some of the irrigation programs or is
purely just the inability to control the usage based on
the water district?
A little of both, a little of both.On a
given year , for example, on a cool year , 1999, a person
would have been able to turn off easily.The 2003 year
we were 10 degrees higher in the months of June, July and
Those are variables that we cannot control.August.You
talked about making sure that Idaho Power has a good
margin , I would like to see someone try to help our
endangered species , that of the American farmer, that we
were able to go ahead and have a margin on our investment
as well.
Just quickly if you could tell me which
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Wilder , Idaho
POTEET (Com)
Public83676
crops you grow today.
Southern Idaho is basically sugar beets
potatoes and small grains, small grains being two or
three different types of barley as well as winter and
spring wheats.
And of those three, which ones are more
drought resistant?Are they the grains?
Actually, none of them are drought
resistant , sir.
But more drought resistant than the
others?
Sugar beets.
Sugar beets, thank you.
But there are critical times in each of
their growth stages that were they to receive drought
stress, you have quality issues as well as yield issues.
Mother Nature has implanted in those crops a certain time
period, a window if you will , wherein if they are
stressed, you have quality issues as well as yield.
COMMI S S IONER KJELLANDER:Thank you.
THE WITNESS:Thank you.
COMM IS S IONER SMITH:Thank you for your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:Matt Mickelsen.
CSB REPORTING
Wilder , Idaho
POTEET (Com)
Publ ic83676
MATT MI CKELSEN ,
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
THE WITNESS:Matt Mickelsen,
M- i -l- s -e-
EXAMINATION
BY MS. NORDSTROM:
And your mailing address?
I reside at 601A North Highway 24, Rupert
Idaho.
Are you here today representing yourself
or an organization?
My family farm.
Thank you.Please proceed.
Thank you.Thank you for this opportunity
of being here today and visiting with you about these
concerns which we have as farmers.There's a group of 11
of us.You were asking Rick about Rupert and we got all
together and thought it was important enough that we
should all come up and so we stand here together , and I
don I t mean to be redundant, as Rick has said , about the
points that have been made, I agree completely with all
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Wilder, Idaho
MICKELSON
Public83676
the things the gentlemen have said about the numbers that
we I re looking at and the margins are tight.
It seems like right now it's open season
on farmers, that we re kind of the man on the bottom of
the totem pole , and as Gary said, our costs can't be
passed on to the consumer.We just take what we can get
and on our operation alone , this increase would affect us
by a little over $20,000 and with the margins as tight as
they are, it just don t work , and we ve sat in meetings
with bankers and all the different commodities markets
which we have trying to figure out ways to make our
margins pencil out and they just don't, they just don
anymore, and you re seeing the demise of the farmer here
in southern Idaho.re seeing that and it's a real
thing that we re facing and the reason that we I re here is
to do all that we can to appeal to you to consider the
real facts that we face and the possible demise of the
family farm, and I guess basically, that's all I have to
say.
COMMISSIONER SMITH:Let's see if there
are questions.
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Wilder, Idaho
MI CKELSON
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CROSS-EXAMINATION
BY MS. NORDSTROM:
Yes, I think you folks from Rupert are
pretty organized in coming here today and I guess my
question is there I s an organization that represents
irrigation pumpers that has intervened in the Idaho Power
rate case and I was wondering if you had spoke with them
and how they prepared their testimony.
Well , we sat with them on the ground water
district's meetings and I wasn't involved in exactly the
things that they discussed , but I know that they are
opposed to it.As well as this power rate increase
we're also facing a fight of water rights from down by
the Hazel ton area and what they I re making us do there is
again come up wi th money.They re assessing it through
the taxes and so on one side, Idaho Power is wanting to
charge us more to get the water out of the ground and the
other guys are wanting us to pay them for water that they
feel that we're taking, but it's coming from two sides.
Like Gary said earlier , I have the same
operation , I have part deep well and I'm part A & B , so
it makes it very difficult to let that water that you'
paying for flow down a hole, you have to use it , and the
deep wells, again , are being threatened to be shut down
CSB REPORTING
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MICKELSEN (X)
Public83676
because of the water right issue that we're facing.
MS. NORDSTROM:Thank you.
COMMI S S IONER SMI TH :Commissioner
Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Quick question, how long have you been
operating your farm in this area?
We moved there from Idaho Falls in '55 , so
we've been in Idaho for a long time.I think we came to
Idaho in the 20's and we've always been farmers and we'
been there since , like I say,55.The root s are deep.
I don't want to lose the farm that my grandfather
started.
Have you developed new ground?I know as
you kind of go out to a desert, more desert environment,
have you cultivated ground and put it under irrigation
out into a more arid environment?
We haven't.The farm that we re at, our
operation was all broke out in the ' 50s.As you get
farther north, then you come into those issues of farms
that were broke out in the ' 70s,, 80s and even some as
late as the ' 90s , but our family farm has been where it'
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Wilder , Idaho
MI CKELSEN (Com)Public83676
been since the mid ' 50s.
COMMISSIONER HANSEN:Thank you.
MR . POTEET:Mr. Hansen , as a point of
clarification, there's been a moratorium on new wells
since the late 1970s.Now , there have been water rights
that have been moved around a little bit, but there
actually been a moratorium on new systems since the late
1970s, so just a point of clarification for you, sir.
COMMISSIONER SMITH:Thank you, Mr.
That was Mr. Poteet.Because the court reporterPoteet.
has to know who I s speaking, we'd just ask that you don I
speak from the audience because it makes it more
difficult for her.
EXAMINATION
BY COMMISSIONER SMITH:
Thank you, Mr. Mickelsen.I was curious
when you met with your bankers, what are they assuming
about this rate case?Are they putting any figures
About the what case?
This rate case, the power rates, are they
making any assumptions about your power rates?
They're not happy with what our margins
look like.They don't want to stand there and slit your
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MICKELSEN (Com)Public83676
throat either.
they factor in any increase in power?
But when you calculate your budget, do
Do they?
Uh-huh.
Well , yeah , but you try to - - well , we
didn't because we just thought it would make it look even
worse.
assuming.
I was just curious what they were
They let me squeak by there and hopefully,
that won't be as big a hit as we're possibly facing.
CSB REPORTING
Wilder , Idaho
All right , and I just assure you as an
irrigator who takes from an irrigation district who has
to order water 24 hours at a time, I understand not
letting a drop go down the ditch.
That I S right , it's very precious.
COMMISSIONER SMITH:Thank you.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Michael Mickelsen.
MICKELSEN (Com)Public83676
MICHAEL MICKELSEN
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.Please state your name
and spell your last.
CSB REPORTING
Wilder, Idaho
Michael Mickelsen , M-k-e-s-e-n.
Your mailing address?
1277 North 600 East, Rupert , Idaho.
yourself --
Are you here today representing
Yes.
- -
or an organization?
Myself.
Thank you.Please proceed.
Thank you, appreciate this opportunity.
agree with what the other irrigators have said.m an
I am a somewhat smaller acreage owner
than a lot of people.I only own 340 acres that I can
farm.Margins are extremely slim and that's a true
It I s tough and especially when you get less
acres because you I ve got to have a certain amount of
irrigator, also.
statement.
MI CKELSEN
Public83676
equi pmen t to f arm and we I ve done thi s for 27 years and
we I re still in there , but we can I t afford to buy many new
pieces of equipment.
We have the same problems as the other
irrigators , except on my farms we lift and then we
pressurize the water we I re lifting from about 280 feet
down and then we have to pressurize costs
get and then to push out,it'expensive that
way.have bill forgot to write down the date but
I think it was July of last year , it's a 250 horsepower
pump, the cost on it with the demand charge and
everything was $6 150.48.That was for 26 days of 30 of
the month.The proposed increase would increase that
well to $7 133., so that's almost $1,000 per month and
that well is probably going to run four months solid
through this coming summer , and I budgeted $25,000 on my
budget to cover my power and I think I'm going to be at
least $5 000 short and 11 m going to have to take it from
somewhere else , I think.
Now , there are these programs out there.
I called the Power Company, oh, last week sometime and
this peak , and I can't remember peak something, program
that they allow you to shut off for four hours , he told
me that in my area there I s a possibility of 300 wells
that could go on this , but they I re only going to allow
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Wilder , Idaho MI CKELSEN
Public83676
wells to go on it and they're going to do the picking, so
I don't know.I don I t know if I can
- -
I want to get one
, I'd like to get them both on , but I don't know
because that really changes the demand charge.Anyway,
waul d in favor of zero percent increase,but don'
know but that'all need say,think.
COMMISSIONER SMITH:Thank you.Let I S see
if there are questions.Ms. Nordstrom?
CROSS - EXAMINATION
BY MS. NORDSTROM:
Yes , I was curious how you heard about
this peak pumping program.
I think , I cannot remember , but I think
they mailed something out , but it said
- -
I was under the
assumption , as one of the other irrigators said, that it
was five days a week you had to shut off for four hours a
day and then they've come back and maybe it was the right
way at first, but it's just four hours for one day a
week , but they choose the day and it's from 4: 00 to
8:00 p., I believe.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:Questions from the
Commission.Commissioner Hansen.
CSB REPORTING
Wilder, Idaho MICKELSEN (X)
Public83676
EXAMINATION
BY COMMISSIONER HANSEN:
Are you aware , does Idaho Power hold a
public meeting or meetings in your area to talk over
different proposals that they might be looking at that
could benefit you pumpers?I mean , I guess I'm kind of
curious because you saying we 11 you thought or you
heard was five days a week or you heard this or that,
do you have communication with Idaho Power?
Well , when they sent that out when it said
five days a week is what I understood and I cannot shut
off four hours a day for five days a week , I just can't
do that because of the heat in the middle of the summer
it just won't work.I could get by wi th one day a week
for four hours , but not the five days a week and when
that came out and I read that and I read five days a
week , I just pushed it aside because it doesn t fit my
program.
I see so that's where you got the five
days?
Yes.
COMM IS S IONER HANSEN:Thank you.
COMM IS S IONER SMITH:Thank you for your
testimony.
CSB REPORTING
Wilder , Idaho
MICKELSEN (Com)
Public83676
(The witness left the stand.
COMMISSIONER SMITH:Kent Stallings.
Mr. Stallings is indicating by the wave of his hand that
he agrees with what the others before him have testified
to and he , therefore, doesn't need to come forward.
Thank you, Mr. Stallings.
Tim Eames.
TIM EAMES
appearing as a public witness, having been duly sworn,
was examined and testified as follows:
THE WITNESS:Tim Eames, E-, 717
North 200 East , Rupert.
EXAMINATION
BY MS. NORDSTROM:
Are you here representing yourself or an
organization?
My farm and myself.
Thank you.
Thanks for your time.I won't replow, as
the handout says , but I did shuttle most of these people
up from Rupert , so I wanted to have my say.It'
CSB REPORTING
Wilder , Idaho EAMESPublic83676
sufficient to say that I know that Idaho Power probably
needs some type of an increase.I understand business.
At the same time , I'm concerned that residential is
looking at 2.5, as I understand it , small commercial 4.
large commercial 1.2, industry nothing, and irrigation
15.That concerns me greatly.
I run a farm, the same as the other folks
who have talked , sugar beets , potatoes and grain.I al so
had the privilege of being involved with some of the
potato negotiations lately from ' 96 on trying to increase
our income.That has not happened.We have not been
able to do that because of the atmosphere that we now
face in our society.The Atkins diet which has been
mentioned prior , we have been unable to increase what we
are being paid for our product.That is distressing,
terribly distressing, for that many years.That's all I
have to say.
COMMISSIONER SMITH:Thank you , Mr. Eames.
Let's see if there are questions.
CSB REPORTING
Wilder , Idaho
EAMES
Public83676
CROSS - EXAMINATION
BY MS. NORDSTROM:
Yes , you mentioned a 15 percent increase
for irrigators, do you understand that that's what Staff
is recommending, but the Company is actually recommending
a 25 percent increase?
Correct.Thank you for clarifying that.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:Are there questions?
Some of us still eat a lot of bread.
COMMISSIONER KJELLANDER:m going to
start up,lost all the weight need.
(The witness left the stand.
COMM I S S IONER SMITH:Dale Butler.
MR . BUTLER:I agree with what these
others have said.
COMMISSIONER SMITH:Thank you,
Mr. Butler.
Jeremy Smith.
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Wilder , Idaho
EAMES (X)
Publ ic83676
JEREMY SMITH,
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.
Jeremy Scott Smith.Smith , S-
And what is your mailing address?
735 North 1050 East, Rupert.
Are you here today representing yourself
or an organization?
My family farm.
Thank you.
Thank you for this opportunity.I farm
down in Blaine County and we have a small family farm
that wouldn't be as large as some of these.I just had a
few numbers thrown together , but I've done my budgeting
early in the year , end of December , and passed our budget
through and this here is going to smack us hard on our
family farm.On my small operation I have three pumps
and several pivots.It's like an average of 890
horsepower is what I'm running.With the demand charges
CSB REPORTING
Wilder , Idaho
SMITH
Publ ic83676
and use rate charges , it will affect my operation around
13,600 and some odd dollars.
COMMISSIONER SMITH:That's the increase?
THE WITNESS:That's the increase.If it
was exactly like last year s, all my demand hours and
kilowatt-hours were the same, the increase would increase
me by $ 13 , 6 0 0 .
COMMISSIONER SMITH:Is that at the Staff
proposed 15 percent or the Company I s proposed 25?
THE WITNESS:Well , the demand rate of
51 percent and then the 15 percent.
COMMISSIONER SMITH:15?
THE WITNESS:Yeah , but -- and I'm just
here to say that the small family farm just cannot keep
taking and absorbing these costs.I have a son that
would like to take over the farm , but with something like
this, I don't even know if I'll be in business next year.
Thank you.
COMMISSIONER SMITH:Let's see if there
are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Commissioner
Kj ellander.
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Wilder , Idaho
SMITHPublic83676
EXAMINATION
BY COMMISSIONER KJELLANDER:
I guess something you said caught my ear
and I just wanted to make sure that I heard it correctly.
What you were saying is if your rates that you paid last
summer remained flat on a going forward basis that that
is something you could still live with , then , on a going
forward basis?
Yes.
COMMISSIONER KJELLANDER:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Paul Mickelsen.
PAUL MI CKELSEN ,
appearing as a public witness , having been duly sworn,
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Please state your full name and spell your
last.
Paul Mickelsen , M-k-e-
Your mailing address?
CSB REPORTING
Wilder , Idaho
MI CKELSEN
Public83676
687 North 800 East, Rupert.
Are you here today representing yourself
or an organization?
Myself and my family farm.
Thank you.Please proceed.
I really don t have anything new to add
other than the hard figures that I came in with with the
rate increase.Using the same kilowatt-hours as I used
last year and then with the rate increase for this year
for my farm , small, would be about $9 700 at 20.2 percent
increase and that is just really very hard to handle.
others have testified , the margins are just not there,
but I just
- -
part of me , I guess , says that I cannot
deny a rate increase for Idaho Power if it is truly
needed, but it would be much easier for us to keep going
if the rate increase was as small as it possibly could
be.
COMMISSIONER SMITH:Okay.
THE WITNESS:Thank you.
COMMISSIONER SMITH:Let's see if there
are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:Thank you very much
for your testimony.
THE WITNESS:Thank you.
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Wilder , Idaho
MI CKELSEN
Public83676
(The witness left the stand.
COMMISSIONER SMITH:Kevin Michaelson.
KEVIN MI CHAELSON ,
appearing as a public witness , having been duly sworn
was examined and testified as follows:
THE WITNESS:Kevin Michaelson, K-
l-s-, at 2590 Quigley Road , American
Falls.
EXAMINATION
BY MS. NORDSTROM:
Are you here today representing yourself
or an organization?
Myself and my brothers, a family farm.
Thank you.Please proceed.
Yes , thank you for listening to us today.
I feel the Idaho Power Company's increase in costs are
not balanced fairly.It should be adj usted evenly or
even so justification towards the most newest customers,
the residential or small and large commercial , not
irrigation.There's been no to little increase in
irrigation accounts for the last five to eight years.
CSB REPORTING
Wilder , Idaho
MI CHAELSON
Public83676
wi th small well, we've had no increases since 1994 on
our farm.We have had no base increases with Idaho Power
since 1994, which is what they're saying, but we do have
a PCA figure now that we did not have years before.
I feel they're misleading us with no base
increases since ' 94 because we have the PCA figure, which
this last year was 46 percent of the base.I f Idaho
Power gets what it's asking for , then my farm's demand
charge will go up $22 655 and my energy costs will go up
$24 319.86 based on last year s energy use.That will be
a combined increase of 26 percent for my farm of 2 000
acres.That means $23.49 an acre combined increase in
one year.With my budget, that won t work with this
increase at all.We will have a negative income with
thi s one expense.
We've had two years of larger energy
consumption than in 2003.That was 1996 and in 2000, we
had more energy use.Our five-year average of '96 to
2000 of energy consumption is 3,006,948 kilowatt-hours
which is higher than 2003's consumption of 2 861 160
kilowat t -hours.In the Aberdeen/American falls ground
water district of 180,000 acres, there is 10 percent of
the wells that are over 400 feet deep.60 percent of
these acres of the district are 150 to 400 feet deep
we II s All of my land falls into these two categories
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Wilder, Idaho
MI CHAELSON
Public83676
which adds up to 60 percent of the ground water district,
so I am a good average well depth owner , so an average
farmer in the Aberdeen/American Falls ground water is in
trouble from the newest increases in power , so I figure
m just average.
Also, this customer charge of going from
$10.07 to $25.00 when they tell their meter readers
which I have a relative, that their days are numbered
because they re going to the new meters that they can
read at the office to save costs in the irrigation class.
We will need more conservation measures that encourage
everyone to conserve power.The new test pilot program
the irrigation peak clipping, can work for some of us.
I f you're in the sand , I hear it cannot.Those farmers
just cannot go there, but in the heavier dirt on non-row
crop crops it possibly can work and when the program
comes out, yes , I will sign up, and also if you can save
some horsepower and energy, they 'll glve you about , Idaho
Power will give you about, $5 000.If there's a way to
increase that to conserve horsepower or to cut back on
horsepower with the new energy saving nozzles and
sprinkler packages, I think they would get a better bite
from that wing.
There's possibilities of them in the
Rupert area, Rupert to Hagerman area, of 111,000 acres
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Wilder , Idaho
MI CHAELSON
Public83676
possibly being curtailed because of the water problems
from the Hagerman area.It could be a good year being
power , I guess , because they're going to get that if they
are curtailed without having to pay for it or anything
like that.I'll be very sorry for the farmers if this
does go throughr but we are working on securing water and
mitigating to those people at the present timer but it
will be an additional cost.
Southwest Irrigation has 100,000 acres
that they could and possibly will move because of the
cost of power out of the Idaho Power area.They are
talking about it now because of the costs.The cost of
service needs to be fairly assessed for all months, not
just weighted in the summer months.We would 1 ike to see
that more balanced.An option to bring the costs on in
September of next year to fit into our budgets may ease
the pain somewhat.Thank you for your attention.
COMMISSIONER SMITH:Let's see if there
are questions.
CROSS -EXAMINATION
BY MS. NORDSTROM:
Yes , you mentioned a potential water
shortage in the Hagerman area
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Wilder , Idaho
100 MICHAELSON (X)
Public83676
Above , yes because of the sprinklers
yes.
- - and how does that look for your
particular irrigation district?
It may come my direction with future use
because those guys probably will file protests and move
up to our area is one way to do that.
MS. NORDSTROM:Thank you.
Just one moment sir.
COMMISSIONER SMITH:Commissioner
Kj ellander.
EXAMINATION
BY COMMISSIONER KJELLANDER:
m sorry for bringing you back.
appreciate your testimony.I just had one question.
you factor the increases that you might be looking at as
you begin to budget , what are you placing the PCA amount
at?Are you leaving the PCA in the same or are you
zeroing it out?
m having to leave it as what it is today
because I don't know what the new one is or anything
else, so based on Idaho Power's figures , that's what I
have today, that's what I had to base everything on.
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101 MI CHAELSON (Com)
Public83676
COMMISSIONER KJELLANDER:Okay, thank
you.
COMMISSIONER SMITH:Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
You know , as I listen to all the testimony
from the irrigation customers , it seems to me that the
proposed increase would be a tremendous rate shock to all
of you and I guess knowing that you all probably prefer
no increase at all
Or fair.I'll go for fair.
- - but if it is determined that Idaho
Power does deserve some increase m just kind of
curious as an irrigator , what amount of an increase
percentage-wise do you think that you could handle that
wouldn't necessarily be a rate shock or throw you into
bankruptcy or whatever?m just kind of curiousr 10
percent?12 percent?I know it's kind of a ball park
and I'm putting you on the spotr but what number could
you --
m dreaming for three to four percent.
m thinking if everybody would take three to four
percent , all classes , that maybe we can get through this
CSB REPORTING
Wilder , Idaho
102 MI CHAELSON (Com)
Public83676
thing.
COMMISSIONER HANSEN:Okay, I was just
kind of curious.Thank you very much.
THE WITNESS:You're welcome.
COMMISSIONER SMITH:And my question was
just regarding the water dispute in the Hagerman arear
that well water or ground water?
THE WITNESS:The fish users - - wellr
Hagerman spring users are claiming on the ground water
pumpers that they re affecting their springs, so it'
against the pumpers , not the surface water users, but
against the pumpers.
COMMISSIONER SMITH:Thank you very much
for that.
(The witness left the stand.
COMMISSIONER SMITH:We have Cecil
Weisenburger.
CECIL WEISENBURGER
appearing as a public witness , having been duly sworn
was examined and testified as follows:
THE WITNESS:Cecil Weisenburger
e- i - s -
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103 WE I SENBURGER
Public83676
EXAMINATION
BY MS. NORDSTROM:
Andr sir, what is your mailing address?
525 Taylor Streetr American Falls, Idaho.
Are you here today representing yourself
or an organization?
m representing myself the farmers of
American Falls, Idaho - - the City of American Falls
Idaho.It says right here tell what you know I I m going
to tell you what I know.
Thank you.Please go ahead.
That's very little.We had a fella here
that started with the AARP.m a member of that r and
m also 71 years old and I get social security my wife
gets social security and her social security and my
social security will eat up - - a medical bill will eat up
those two social securities.If I would not have had a
form of income for myself besides social security, I'd be
on welfare, I guess.I don't know what these people do,
so in that frame of mind or that thought I'd like to
leave that with you because I don't know how those people
on social security can stand any rate increase, and as
far as American Falls goes when Idaho Power raises our
rates, we have to raise the rates to the city.Now
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104 WEISENBURGER
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you're affecting the old people again.Where are they
going to get the money?
Idaho Power wants a guaranteed income.
farmed for 45 years.I would have 1 iked to have had a
guaranteed income for those 45 years.Some years I lost
money some years I made money and none of my kids
wanted to farm because it's too much work for the amount
of money that we received, so I pray for these farmers
that are here now for the amount of money and the hard
work they do to make the money they do for Idaho Power to
say we want a guaranteed income.
As far as the City of American Fallsr I
don't know what they want for an increase.m the mayor
of American Falls and I've got a figure here for all of
our services for one month would raise
- -
at a 20 percent
rater and I didn't know which one to figure, that's the
easiest to figure but a year's rate on that average of
our regular light bill would be an increase of $16,500,
and also to add to that a 20 percent on our wells, you
would have to add another, let's see, 20 percent would
add another $10 000 for just pumping water , so we would
have an increase of $25,000 for the city, and in the
ci ty we can raise - - get a raise from taxes , but the
most we can raise is three percent.That I S all the law
will give us is three percent, and in the old days and
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105 WEISENBURGER
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don t know how it is now because I don't pay much
attentionr but when you talk about the Idaho Power , the
old days you 'd see five guys standing therer one guy on
the pole working and the other four people watching him.
I f we 'd done that on the farmr we would have been out of
business the first or second year.
I think that's probably all I have to
say.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.Ms Nordstrom?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:From the Commission.
None from us.Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Let's take about a
ten-minute break and come back and begin at 2: 35.
(Recess. )
COMMISSIONER SMITH:Mr. Keith Esplin.
KEITH ESPLIN
appearing as a public witness, having been duly sworn
was examined and testified as follows:
THE WITNESS:Keith Esplin r E-
and I'm representing the Potato Growers of Idaho
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106 ESPLIN
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Association as well as myself as a user of Idaho Power
and a farmer.
EXAMINATION
BY MS. NORDSTROM:
What your mailing address?
580 West South,Blackfoot.
Thank you.Please proceed.
Thank you.want try to touch on a
few issues I don't think have been brought up, maybe
lightly review a few others.I certainly want to
appreciate all of you for being here and taking your
time.I think this shows the importance you see in this.
One issue that I would like to discuss for a second is
the demand charge.I think to raise the demand charge to
the 51 percent as has been proposed is a very
anti-conservation measure.The demand charge if you run
an irrigation pump for , I believe it only takes , 10 , 15
minutes and you have that charge for the whole month and
so, in essence, after once you paid your demand charge,
the more you can run your pump, the lower your rate is
for that month and so really, I think it's a very
anti-conservation measure.
There's a lot of times particularly with
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Wilder , Idaho
107 ESPLIN
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wheat , alfalfa, where you only need to water a few days
in a month and potatoes as well when you're starting up
in the spring and the grower already has to decide okay,
am I going to water three or four days this week or wait
until the next billing cycler but if you have to make
those kinds of decisions you re not doing what's best
for your crop and not likely to have the best crop
possible , so I think it's a very anti -conservation
measure.
The PCA charger I believe it I S called , is
something that obviously the growers have had a large
amount to pay the last few years.We've been paying for
the high costs associated with the power shortage a few
years ago and we understand that that number may be
coming down.The risk that we run , though , is if we have
a large rate increase , base rate increase, then the next
time we have a power shortage and we have to raise the
PCA, we're going to be in astronomical levels as far as
what growers are used to paying so I think that I s one
the concerns that I would have , too.
It's already been stated that irrigators
pay for line charges.I know myself , I certainly had to
do that when we made changes.Irrigation was developed
throughout Idaho when there was surplus power in the
summer , as I understand it r and it was something Idaho
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108 ESPLIN
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Power wanted irrigators to do to use that power supply
up.
Alsor I don't believe that the current low
interest rates support a high rate of return guarantee
for a company either.I do want to comment briefly on
the customer charge.When I was farming full time, I had
a lot of small farms, I think, on about 1,000 acres.
had 25 , 26 different meters , so obviously, some of those
fields were smallr 10 acres.To raise a $10.00 demand
charge for four months is raising the cost on 10 acres
$40.00 which is about a 20 percent rate increase in
itself , so I think that is something that should be
considered as well.That's more of a personal note.
On the time of day issue , as you can see
by the irrigators that have spokenr there certainly are
some that can use that.I guess if I had to make a
venture , I would say that probably the total systems out
in the field , I would venture to guess that 80 to
percent probably can't participate, but certainly, if
those that can can make it work for them , I think that
should be advisable however, if you had to raise the
rate for the 80 or 90 percent an extra two or three
percent to help do a conservation program , I'm not sure
that would be worth it overall for everyone.
My family operates under , farms under,
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109 ESPLIN
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Utah Power and I'm very familiar with some of the
conservation programs they ve hadr as I know you are, and
some of them, I think, have worked , but some of them have
been very difficult.This past summer was such a high
drought - - hot , dry summer that many of the irrigation
systems couldn't keep up running full time.Over the
last 10 or 20 yearsr there s been a lot of improvements
in irrigation systems to conserve energy lowering
pressure, smaller nozzles and different systems, but many
growers tell me that in a summer like last year , they
literally couldn't keep up and maybe overdid the
conservation , so I know there would be limits on what can
be done in that area.
Just finally, I'd like to comment that the
potato economy in the State of Idaho was built around low
cost and high quality.As we've seen the last few years
from a national standpoint, low cost has become more
important to many buyers than high quality and that'
part of the reason we've lost part of our industry in
closing of the Heyburn french fry plant.If we continue
to raise costs then we continue to put more parts of our
industry at risk , so I would just encourage you to take
that into consideration.
In the early ' 90s there was a study done
by the Uni versi ty of Idaho that pegged the impact of the
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110 ESPLIN
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potato industry on Idaho as about 10, 11 percent of the
economy.As other parts have grown , I think it's a
little bit less now , but it certainly is a key component
in the economy and anything we do to raise those costs to
make us not competitive certainly hurts the economy, and
it isn't just that we have to be competitive in the
United States anymore.We'We're a global economy.
competing with Canada and other producers around the
world and we're located in an area that on a map we're a
long ways from population centers and so we have to deal
wi th issues such as transportation.There's nothing we
can do about it in a sense , but we've got to keep our
other costs down as much as we can to stay competitive.
This is especially true for the high lift
pump areas and many of these high lift pump areas were
buil t to supply the french fry plants and the things that
built our state up and many of these growers have just
been holding on to get through the current high PCA and
hoping that they get lower costs and so we're hoping that
still happens.
I f you have any questions , I'd be glad to
answer them.
COMMISSIONER SMITH:Okay, do we have
questions?
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CROSS - EXAMINATION
BY MS. NORDSTROM:
Yes , you mentioned that you estimated that
80 to 90 percent of irrigators in this area cannot
participate in time of use programs why do you think
that is?
Well r it may be wrong to say 80 to 90
percent of irrigators.I would probably say 80 or
percent of systems.There's probably a lot of irrigators
that may have one or two pumps that they could
participate in and the reason is that they need
- -
either
they're a pivot that needs to be able to run all the time
in order to get enough water down or they re on a ditch
system where the water has to be ordered off or they
pumping, double pumping, like the gentlemen from Rupert
are doing.Some of them just won't want to take the
risk.If they commit up front , then we have a year like
last year , it's so hot it isn't worth it.ve had some
growers tell me their savings would only be 500
$2 000 and they didn't feel like it was worth the risk
for their crop to potentially turn it off , but on the
other hand , I know there's some that could do it as well.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:Thank you for your
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112 ESPLIN (X)Public83676
testimony.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Troy Murray.
Okay, Debra Hemmert.
DEBRA HEMMERT
appearing as a public witness, having been duly sworn
was examined and testified as follows:
THE WITNESS:My name is Debra Hemmert,
e-r-641 North 8th , Pocatello is the address.
m the executive director of Southeastern Idaho
Communi ty Action Agency, commonly referred to as SICA.
EXAMINATION
BY MS. NORDSTROM:
Thank you.Please proceed.
I'd like to thank you for the opportunity
of being here today.Just in summary so that - - I'm sure
you folks know , but the folks in the audience may need to
know that we administer the LIHEAP program for
southeastern Idaho as well as the weatherization
program.
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Last year we provided the LIHEAP program
through a federal pass-through grant through the State of
Idaho for 3,894 households in southeastern Idaho.That
equates to 10 752 individuals and of those 10 000 plus
individuals , 3 047 were classified as elderly,
handicapped or having households with children zero to
five years old in them.Of that population , 1 015 of
those folks were elderly.
I'd just like to pass a scenario past this
group or past you.I did a quick little study this
morning on some files and visited with some staff that
work on a regular basis with these folks and if you take
a person , a single person , living on a $500 social
securi ty income and they have a $100 electric bill r and
that is quite feasible , especially if they're on oxygen
or they have special needs in their homes and because of
the nature of a lot of our elderly folks have conditions
such as arthritis , those types of things or intolerance
even to heat , they need to use air conditioners in the
summer , so I'm saying a $100 electric bill on the
average , if you increase that by 19 percent , which is
what Idaho Power I understand is asking for , they
going to be paying about 19 percent of that $500 for just
utilities.That doesn't leave a lot of money for
medications for property taxes, for all the other needs
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that they may have.The AARP representative Mr. Wiggers
had alluded to thatr also, and I want to reiterate again
what he said , I believe that's very true.
The other thing also in the vein of the
elderly folks that we work withr SICA owns 88 units of
affordable safe housing for our elderly population here
in Pocatello.In that the agency itself pays for their
utility costs.The only way we can recoup those costs
because we receive federal funding in subsidy we have
everything that we do at the agency for these elderly
folks is through their rent.If - - one of two things
happens:Because they're not in a situation where they
would be considered residential because we pay their
power bill , but under the definition herer if I'm reading
this right the agency would be considered a large
commercial agency or commercial business which would put
us at a 15 percent increase , have I understood that
correctly, that that's what the Idaho Power folks are
asking for?If not, please tell me.
That's going to raise our costs for the
agency to provide safe, affordable housing for these
elderly folks that live in our units $5,000 a year.Now
what happens with our elderly housing is we have to
submi t a budget every year to HUD.If HUD does not
approve that and we have to have a basis for everything
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we do, if they don't approve that, that comes back into
our operating cost which is our capital fund we use to
fund our agency which means in turnr I don't think you
have to be highly intelligent to understand what's going
to happen , if there's $5,000 that Idaho Power is
receiving in lieu of us being able to get a rate increase
is what we're going to have to ask for for these elderly
folks if that's denied by HUD , we're going to have to
pay that somewhere somehow.We're going to have to
ei ther raise their rents or we're going to have to cut
into our capital corporate account which in turn we'
not going to have as much money to provide services for
these 3,894 households.
BasicallYr I would just at this time like
to tell you that I am very concerned.Our agency as a
whole is very concerned about these programs.We also
administer the weatherization program , which I'm sure
you re very aware of , and would like you to take a real
close look at if - - I'm sure they probably will need an
increase , we're also a business , so I understand the
business side of things but I know that our employees
we have 60 plus employees and I'm certainly not able to
give them a 16 or 15 percent increase to cover their
costsr so I would just like to ask you to use prudence
concerning this.
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COMMISSIONER SMITH:Let's see if there
are any questions.Ms. Nordstrom.
CROSS-EXAMINATION
BY MS. NORDSTROM:
Yesr there was a Community Action
Partnership Association of Idaho that had filed and
intervened formally in this case, did you work with them
to prepare their testimony?
Yes, I'm a part of that.m on the board
of directors.
They had recommended that the Commission
increase funding for low income weatherization assistance
substantially.
Yes.
In your experience have there been more
people requesting weatherization assistance that haven't
been able to be served by current funding?
Yesr yes.I know that there are
- -
actually have my notes right here on that.I know that
there's approximately, the assistance - - if you don
mind me reading this because I do want to make sure
have it accurater assistance benefit in the current year
of 2002 to 2003 for electrically-heated homes 592 less
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l07 homes previously weatherized with Idaho Power
leaves 5,485 still eligible to be weatherized.Tha t 's a
huge amount of homes that could still use weatherization
measures.
At this time we do receive a small
contract from the Idaho Power Company.What the CAPAI
group is proposing is that they provide additional
funding for the administration , I believer if I'
understanding what you're asking me.It has been $75.
per home for the administration side since I believe
1994.It takes a lot more money than that to properly
administer those funds at this point.We're also asking
for additional dollars to be put into the weatherization
program.
Of those more than 5,000 people that are
on the waiting list to receive weatherization assistance,
how many, for example , were accommodated last year?
I know that we - - you know , I have my
weatherization expert with me , may I address someone in
the audience?Would that be okay?
COMMISSIONER SMITH:We'll be at ease for
a moment.
(Pause in proceedings.
COMMISSIONER SMITH:Okay we'll go back
on the record and you can give the answer.
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THE WITNESS:Okay, we weatherized here in
the SICA territory 165 homes last year so I don't think
I answered your question as completely as you would have
liked me to.
MS. NORDSTROM:You did just fine.Thank
you.No further questions.
COMMISSIONER SMITH:Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
I just had a couple of questions.How
easy is it for people you represent to get the financial
help with their utility bills?
We do an advertising campaign each fall to
make sure.I know that the state requires us to put out
flyers and those kinds of things in senior citizens'
centers.There s stuffers in the envelopes , I believe
Intermountain Gas puts them out, I believe Idaho Power
puts them out , explaining where they can call to get
service.The one thing with our elderly population, what
we really strive to let them know is that we will come to
them if they are homebound and they can't come to us.
It's fairly easy.They need to verify their income
monthly with a copy of a bank statement or something like
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that and their identification and their social security
number.
So if they financially qualify then do
they automatically, will they receive financial help
Yes.
- - throughout the year then?
No just one time.The energy assistance
program is set up to only give a one-time benefit per
heating season and I believe the last I checked on my
research , it was just over or just under $200.I believe
it was $198 a year they receive, not on an ongoing
basis.
Just the one time?
Just the one time.
COMMISSIONER HANSEN:Thank you.That'
all I have.
EXAMINATION
BY COMMISSIONER SMITH:
You were here , I think , earlier when
asked my question about LIHEAP and maybe getting some
state funding is that something your organization would
support?
Absolutely.
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Is that something you have worked
At this time we haven'
- -
to my
knowledger and I've been with this particular program
ve been in a different capacity in the agency, but I'
been with the agency for 21 years to my knowledge , the
only thing that we receive is federal pass-through
funding, the LIHEAP funding and the DOE dollars.The
state does not match it in any way.
COMMISSIONER SMITH:Well , it's something
you could put on your to-do list.
THE WITNESS:We will.Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Bob Dye.
BOB DYE
appearing as a public witness, having been duly swornr
was examined and testified as follows:
EXAMINATION
BY MS.NORDSTROM:
Please
for the record.
state your name and spell your last
My name is Robert Dyer y-e.
And what is your mailing address?
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121 DYE
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845 Barton Road No. 84 , Pocatello.
Are you here today representing yourself
or an organization?
m here representing the Idaho Community
Action Network.
Thank you.Please proceed.
Thank you.I'd like to begin by thanking
the Commission for the opportunity to address this issue
before you today.I have several pages of signatures
peti tions
COMMISSIONER SMITH:Thank you.
THE WITNESS:These petitions were
circulated not only among our members but out through
the community as well.Our staff organizers have come up
wi th kind of a unique argument against the increase.
Idaho Power is asking for a 19 percent increase so our
organi zers came up wi th 19 reasons why to deny the
increase.
In my circumstances my wife and I are on
both disabilitYr we live on a very tight budget every
month , and just the base rate increase from $2.50 to
$10., it's a $7.50 a month increase , just that could
buy one meal for my family.The other choice I'm forced
to make personally is whether I buy food, pay the
electric billr on the other side , do I buy my
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medications.Wi thout the medications the disease that
racks my body goes into check and the general economy
right now is to the point where I buy medications about
every 90 days and I take one month's worth of medications
and string it out over three months.This goes to kind
of illustrate how some of the families in Idaho are
struggling and the life and death situations or decisions
that they have to face.
Idaho Power is asking the ratepayers to
pay over $1 000 000 for a cloud seeding experiment.
understand that they ve already conducted this experiment
and have offered no data , whether it was successful
whether it was unsuccessfulr whether the savings could be
passed on to the ratepayers or what the exact
circumstances there are.This is unacceptable from my
organization's standpoint and from my personal
standpoint.These are experiments and the ratepayers
should not have to pay or foot the bill for
experimentation.I can see where it would help if they
could create some more water and the hydroelectric plants
would definitely benefit therei however , they haven'
offered any data to support their claims.
The other thing that I wanted to mention
to the Commission in looking at some of the state laws
that govern utilities in Idaho , I run across a section of
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the Idaho Code that dealt with delivering disconnect
notices to families and electric customers.For electric
customers who live in apartment buildings or mobile home
parks, those disconnect notices can be hung in a public
area where you may or may not see it.You come home
your power is shut off you're wondering why, they hung
it in a common area that you may not have tripped across.
I personally had my power shut off in the
wintertime and faced the reconnection fees and all the
hardships that come from that and these are just issues
that our organization is addressing and they're also
issues I hope that you would consider when you'
allowing for this rate hike.Idaho Power if they can
just walk into a foyer someplace and tag a disconnect
notice , that's cutting their cost , it's not costing as
much to actually find the home or the apartment to post
that notice.
That's all I have.Thank you.
COMMI S S IONER SMI TH :Let's see if there
are questions.
MS. NORDSTROM:None from the Staff.
COMMISSIONER SMITH:I guess are you also
aware that the Commission has a moratorium period during
the winter where you cannot be shut off if you have small
children or a medical condition?
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THE WITNESS:Yes , I am.The specific
incident that I related to you was apparently in a gray
area, it was real close to the line for that thing and
kind of made for an interesting weekend.
COMMISSIONER SMITH:Thank you very much
for your testimony.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Denni s Hobbs.
DENNI S HOBBS,
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.
Dennis R. Hobbs , H-o-b- s.I live at
4959 Joy Street in Chubbuck , Idahor 83202.
Are you here today representing yourself
or some other organization?
m here representing ICAN organization
for the retired and myself.
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Publ ic83676
Thank you.Please proceed.
I am firsthand probably more aware than
most people and maybe even more than you guys why Idaho
Power wants this pay increase and I worked with FMC
Corporation for 26 years and experienced working with
them for that 26 years in the furnace building and what
have gathered is they want this pay increase to offset
what , actually what FMC, they're losing from FMC, because
as of last year , April 1st, they had bought power from
FMC and sold it under the California prices or wherever
and we closed the plant and the power rates for FMC the
end of June and July August and September were increased
so dramatically that - - at least that's when we did our
rebuilds and repairs on our furnaces.
Idaho Power asked for a four percent
increase in November to pay for their power rates on an
emergency basis.That is the time when FMCr we had to
close some of the things down at work because they always
had an increase.We had a guaranteed rate of a furnace
and a half, cheap power, and everything had to be bought
after that over the open market and that and sometimes in
excess of 30 mills and it got to outrage us in the last
years of the FMC/Astaris plant.We had to let them know
an hour ahead of time to shut a furnace down or we'd be
paying the higher price for the power and so this is what
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they're trying to do is the things they were doing for
FMC, they re trying to make the public through JulYr
August and it goes into September but they started in
November this last year to get these increases in r and if
I have my family power shut off, I'm on a C-path machine,
I could possibly die during the night , and Idaho Power
doesn't even look out for their stockholders anymore
because they cut their dividend last September from eight
percent to about three to four percent and they said they
were losing money, but in September they made a profit.
Idaho Power has really never lost anything, any money if
you put all their different units and everything
together.
I am medically retired and I'm on a fixed
income.I moved from Idaho Power to natural gas about
years ago because my heat bill was $450 a month , plus
burning wood , and when I moved to gas , it was under 100
and the poor people cannot handle this , especially the
retired ones or the ones that are on low incomes.Low
paying jobs can't handle this either.Idaho Power is
asking ratepayers to come up with 85 million extra
dollars a year , but the PUC Staff says it's asking about
70 million too much.Low income families have so much
trouble paying the bills and it is that Idaho Power shut
off almost thousands of families last spring.
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127 HOBBS
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Idaho Power shouldn't put families at risk
for things they don't need.One of the other reasons is
Idaho Power included $10 million for pensions even though
they didn't pay anything into the pension fund.In fact
it hasn't paid anything into the pension fund since 1995
and that's because the pension fund has more or less paid
for itself and Idaho Power has collected 19 million more
from ratepayers for pensions than it has paid into the
fund.We don'When will we get a refund of that money?
get to see no refunds and I think Idaho Power is just,
they're passing everything off to the public and we
cannot handle it anymore.It's just too much.I get my
check on the third Wednesday of the month r it's gone
Wednesday night and I'm stuck without any money possibly
for the next 30 days.Thank you.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Thank you very much
for your testimony.
(The witness left the stand.
COMMISSIONER SMITH:Mary McCollum.
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MARY McCOLLUM
appearing as a public witness , having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.Please state your name
and spell your last name.
Mary McCollum , M-u-m.Mailing
address P. 0 Box 1055, pocatello , Idaho.
Are you here today representing yourself
or an organization?
with ICAN.
Thank you.Please proceed.
Okay.Good afternoon.I'd like share
with you something that happened with me here last
November.I was about to have my power shut off.
bill was approximately $141.I am on social security
I only receive one check a month.I called Idaho Power
tried to make arrangements to pay my bill.I told them
could pay approximately half of the bill.That was not
acceptable to them.They told me I only had a few days
before my power was shut off.I had to go to the
Sal vation Army and they paid my bill for me so that my
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129 McCOLLUM
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lights would not be shut off.
I think that they should be able to work
more with the people , especially the ones that are on a
fixed income.Idaho Power wants to raise the fees that
they charge to reconnect people's power once it's shut
off even if it's shut off because they can't pay their
bills.They also want to charge families more if someone
goes to the house to disconnect power because of an
unpaid bill, but they don't disconnect because the family
pays the bill.These fees are unfair.
People don't have their power shut off
because they want to.It happens because they just don'
have the money.Charging poor people fees for being poor
is unfair.Alsor the PUC should make sure that Idaho
Power provides bills and notices , like shut -off notices,
in Spanish and other languages that are common in Idaho.
Idaho Power should have messages on their phone system in
Spanish and have printed notices posted at their offices
explaining customer rights in Spanish and other common
anguage s .Right now this is a problem that keeps many
consumers in the dark.It prevents community members
from knowing their rights and participating in public
hearings like this one and this needs to be fixed.
Thank you.
COMMISSIONER SMITH:Questions?
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MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:I just
- -
just one.
If the Company ever refuses a payment plan option to you
again please call the Commission.
THE WITNESS:Thank you.
COMMISSIONER SMITH:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Susan Merrill.
SUSAN MERRI LL
appearing as a public witnessr having been duly swornr
CSB REPORTING
Wilder Idaho
was examined and testified as follows:
THE WITNESS:My name is Susan Merrill
EXAMINATION
BY MS. NORDSTROM:
And what is your mailing address?
1000 Shale Driver Pocatello.
Is that Pocatello?
Uh-huh.
And are you here today representing
yourself or an organization?
131 MERRILL
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I I m here with Idaho Community Action
Network and for myself and my family.
Thank you.Please proceed.
Thank you very much for letting me speak
today.Like I said, I'm here with Idaho Community Action
Network.We I re a nonprofit organization to help feed low
income families.Most of our families need to have
relief because they have to choose every day between
power , food, their medical , their prescriptions.As Bob
Dye said, some people stretch their medicines out.
here to state No. 10 of the 19 reasons to deny Idaho
Power s rate hike request.
I take care of three disabled people.
husband is multiply disabled.Idaho Power is asking us
to pay $7 200 for executives to belong to the Arid Club,
an exclusive club.One of these executives was Jan
Packwood who made almost $800 000 in 2002.We can barely
pay our bills.I can't pay $50.00 -- well, it's very
hard for me to pay $50.00 for my husband to go over to
the recreation center to do exercises he needs because
Medicaid will not pay for aquatic therapy for him and
they're asking us to pay for this.
Also , I know a lot of families who lost
their power because they could not pay the bill.How can
the PUC let Idaho Power raise our bills and leave more
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families out in the cold so that Packwood can have free
membership to an executive clubr and I just say this,
social security keeps staying the samer maybe have a one
percent raise, when all of our food , cost of living,
everything keeps going up, rising considerably.Nobody
can pay thi s It's just terrible that the elderly and
the disabled can't live and that's all I have to say.
COMMISSIONER SMITH:Thank you.Let's see
if there are questions.
CROSS - EXAMINATION
BY MS. NORDSTROM:
Yes , you understand that the Commission
Staff has recommended that the Commission disallow those
management membership expenses as part of this rate
case?
, I wasn't told that.
So that', in essence that I S, one thing
Staff has recommended that Arid Club memberships be
denied.
Yeah , I was going to say fringe benefits
should be looked at before taking hike raises for the
disabled and the elderly and the people that don't have
the money.
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133 MERRILL (X)
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testimony.
MS. NORDSTROM:Thank you.
COMMI S S IONER SMI TH :Thank you for your
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Vickie MaIm.
VICKIE MALMr
appearing as a public witness , having been duly sworn
CSB REPORTING
Wilder Idaho
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.
Hi.
Please state your name and spell your last
name.
Vickie Ann Malmr M-a-I-m.The residence
is 752 North 10th , Pocatello.
Are you here today representing yourself
or an organization?
m representing ICAN and also myself.
Thank you.Please proceed.
Thank you.Thank you for letting me take
134 MALMPublic83676
the time to visit a little bit with you today, too.
medical , which I I m not asking anybody to say
- -
this is
not a poor pity me trip, this is a fact I make
approximately $9,300 a year for myself and one other
person that's living in my home.I have anywhere from
2 to $300 per month that comes out of my own pocket that
Medicare does not pay me.Because of my health problems
I have to have power running 24 hours a day other than
when I take my little friend here.
My power bill runs approximately $225 a
month because of that.I have been to SICA.They di d
pay one month $127 and I thoroughly appreciated that.
m also on their weatherization program.I hate to see
what is going to happen if these increases come in.
a living example.What am I supposed to do?I go down
to the ICAN.My first time I didn t even know that they
existed.A lot of this information is not made available
to the general public.I got some groceries that really,
really helped come in handy.
I have a son who hasn't been able to find
employment because of Pocatello' s financial problems
right now.I occasionally say, you know can I have a
gallon of milk , can I buy a loaf of bread that these
farmers aren I t going to be able to raise or a few spuds
that won't be herer we'll be importing them from Canada
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Russia.I f the things keep going up to where the farmers
and ranchers can't produce, they're going to go away.
Social security is going to give us a
great big two percent increase.Fine, I appreciate the
two percent.m sure that I can buy, you know
something a little bit more.Maybe I can pick up one of
the two prescriptions that I can't afford to buy.
think it's real, real sad that Idaho Power deems it'
necessary for 20 to 25 percent.The people that I see
here in front of me, I'm glad that you all have wonderful
paying jobs.I did too at one time , I made big money.
None of us are guaranteed perfect health and I'm not
belly aching, that's not the point here at all.Just be
aware that there are those of us, I have no medical
insurance , you get sick, you can't afford it.I f your
company isn't one that carries it onr if you've got $700
extra a monthr sure, kick it out.Wha t do you do wi
the 200 , pay the power bill?Something has got to give
somewhere.
We have to have the farmers being able to
produce their produce so that we can have bread , milk
from the dairy people spuds.m an Idaho g i r 1 .Most
the people in this room like an Idaho spud and a good
loaf of homemade bread , but they're going to go away.
Idaho Power employees get paid better than the average
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Wilder Idaho 136 MALMPublic83676
employee in Idaho.That's lots of money.I know what
made , you guys know what you make.It's good that Idaho
Power brings good jobs to Idaho.m glad somebody is
making good money.It's great when you've got it.
Idaho asked the ratepayers to pay for
5 million incentive program rewards to employees
including high-priced executives when the stock prices
were high and that's one thing.High stock is a benefit
to the shareholders but not to ratepayers and these
bonuses should come from the shareholders' pockets and
not ours.We have as a publ ic concern here we don'
need thi s For a rate what do I suggest?Two percent.
Why not?That's what those of us that live on social
securi ty get.That's what I would suggest and thank you
for your time.
COMMISSIONER SMITH:Thank you.Let's see
if there are any questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Commissioner
Hansen.
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EXAMINATION
BY COMMISSIONER HANSEN:
Maybe I missed it , what do you pay a month
for your electricity?
CSB REPORTING
Wilder , Idaho
Right now 23 or $230 a month.
Is that in the wintertime or just
That's pretty much year round because of
all of the medical equipment that I have to have in order
to survive.
And do you heat your home with
electrici ty?
I heat with both electricity and gas.
home is an older home and that I s why I I m going with the
weatherization , but the biggest problem is because of the
medical equipment that I require.
COMMISSIONER HANSEN:Thank you.
much.
COMMISSIONER SMITH:Thank you very
Lamar Isaak.
THE WITNESS:You re welcome.
(The witness left the stand.
COMMISSIONER SMITH:I think that says
138 MALM (Com)
Public83676
LAMAR ISSAK,
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.
Lamar Isaak , I-s-, 3298 Isaak Loop,
American Fallsr Idaho, 83221.
Are you here today representing yourself
or an organization?
I I m here representing the Upper Snake
Ri ver Sugar Beet Growers Association as president and the
Am Co-Op as a board member and myself as an irrigator.
Very good , thank you.
First, I want to thank you guys for taking
the time to listen to the testimonies.I didn't realize
there was this many problems out here.There I S all kinds
of them , all issues.I I II do the one with the Upper
Snake River Sugar Beet Association.We as an association
are opposed to the rate increase for the fear of losing
beet growers.We as an association cannot afford to lose
any growers.If we take
- -
if we go throughout the
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growing area to keep Amalgamated in business because
is a co-op, any lost acres would be detrimental to the
company.I don t see how deep well sugar growers can
maintain a 25 percent increase and be in businessr our
margins are so tiny.
With thatr I'll go to my part as an
irrigator.I I d like to run you through a little exercise
that happened to me last year.I have a farm in Rockland
that is a 160-acre hay farm and I lift 510 feet, it cost
me $90.00 an acre in 2002.A drought coming on , low
moisture in the groundr looked like it was going to cost
me around 110 to pump because I I d have to put another
week of water into the crop.The price of hay being at
$50.00 a ton on the stump, I realized I could only get
four ton up there at best give me $200.110 for power
$40.00 for expenses , and that I s on the lean side , left me
50 bucks.If I dry farmed it, 50 bucks.That's the kind
exercise that all of us are going to have to run as
irrigators.
I guess with that statement, I'm saying
that as we move forwardr it's forcing us to examine where
we're going to be.If we lose our high lift areas , there
will be more increases for the shallow guys, and with
that , I want to also say that , you know I could not have
made that decision on that , you know , whether to irrigate
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or whether not to irrigate if I had had land payments.
I I m fortunate to be a fourth generation farmer , meaning
that most of my land is paid for and I'm thankful for
that.
I would like to pass it on to my kids , you
know , someday somehow.m not a small farmer , so I just
want to let you know what we do farm and I I m not large
probably in the middle of the road.We're a hard working
family.The Isaak side I I m proud to say are known for
that.We have six deep wells ranging from 235 feet to
510.We have 11 short coupled with centrifugal pumps
ranging from 110 to 145.We I ve implemented when Idaho
Power started pushing variable speed panels, we'
implemented seven of our system with the panels and they
have worked very well.
I would be one of those who would try to
help by cutting my pumps off , but due to the fact I 1
mostly wheat or hay and I do have some sugar beetsr but
I I d put them on systems where I could maintain that.
I I ve read your resumes.I know you guys care and
appreciate that.
The other part I I d like to do is as a
board member for the Am Co-Op in the American Falls and
Aberdeen area.We are already realizing that the inputs
are on the way up and our patrons are facing problems
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financially to survive , so this would only place another
burden on our patrons, so if we lose market share or
growers can't pay their bills then surely we also will
be out of business as a co-op.In Blackfoot and American
Falls, we're a $34 million co-op with 32 full-time
employees.You know the farmers are under attack as
well as everybody else, so I appreciate you considering
all these testimonies and I want to thank you again for
your time.
COMMISSIONER SMITH:Let I S see if there
are any questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Okay, thank you very
much for your testimony.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Nick Behrend.
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NI CK BEHREND
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.
Nicholas Behrend, B-d, 2976 West
2000 South , Aberdeen.
Are you here today representing yourself
or an organization?
I I m here representing our family farm,
BBK Farms.
Thank you.Please proceed.
First of all , I also would like to thank
the Commissioners for coming down and hearing us , letting
us voice our opinions on being opposed to Idaho Power I
rate increase.As I stated, I I m here representing our
family farm.We farm west of Aberdeen.We grow 500
acres of cropsr 500 acres of which is potatoes.Most
of that is grown on
- -
we pump our water from the ground
from 150 feet up to 400 feet lift on our wells.
This rate increase if it were to go
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through , if we put that back on our power consumption
over last year , to our farm it means an increase of over
$22 000.Like most of our other neighbors that are here
we operate mostly on borrowed money.Our budgets are set
back in December and at that time we assumed that our
rates would be same as they were in the past , so this
$22 OOO is supposed to just be dissolved somehow into
budgets that are already tight.We operate basically on
break-even margins and we're facing increases , just like
everyone else isr in fuel and fertilizer and now on
power.
Unfortunately, power is not something,
water is not something that we can afford to short
oursel ves onr especially in drought conditions like we'
been in in the last few years.Water is the most
important thing that we can put on our crops so we'
faced with decisions , like in labor.We haven I t had an
increase to our employees for the past four or five
years, no cost of living increases.These are good
people who work hard.They're trying to make a living
with their families in our communities and unfortunatelYr
due to increases in other areas of our business which we
have no control over we I re forced to make tough
decisions like that.
We grow - - all of our potatoes are grown
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for processors.We found out again this year that
there's no increase there.We don't have an opportunity
to pass these costs on to the consumers that buy our
products , unfortunately.
I'd like to speak for just a minute, too,
on the demand charge.I feel that by increasing the
demand charge as Mr. Esplin mentioned earlier you'
discouraging conservation.In fact we try very hard to
keep a very close eye on when our meters are read so on
our small grains crops when that date is coming up,
maybe we need to water for another week or 10 days to
finish the crop out , but our demand charges are already
so high that we I re forced to go out and shut those pumps
off before they read them the next read date so as not to
trip the demand charge for the next month r and when we'
under drought stressed conditions like we have been the
past few yearsr those crops tend to suffer a little bit;
whereas , if we trip the demand charge, then we're faced
with needing to actually use more water than probably we
really need so to bring the cost per hour per acre down
to where it's more efficient.
You know we I ve heard everybody come up
and mention how tight things are and we're in an area up
on these higher lift wells where if this increase goes
through , very likely we could be put out of business.
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think we all assume that in the past that as farmers go
out of business that you know , somebody will step up and
maybe it I S because they weren't good farmers they
weren't good businessmen and so someone will step up and
take over that ground and everything will just continue
on and be okay, but I think we're to the point now where
we I re faced with losing - - these are good farmers,
they're hard working individuals , they're smart
businessmen and some of this ground , when it goes out of
production , it quite possibly could stay out of
production , because the margins are so small , our costs
of production are so high that it just may not be worth
someone else going out and picking that ground UPr
then you start losing employees , they don't have the
workr the dollars stop trickling down into our local
economies and you're going to have local parts guys start
going out of business.You know , it's just going to roll
on and on and so I really encourage you to take all this
into account when you make your decision.Again
appreciate you hearing our concerns and that would be
all.
COMMISSIONER SMITH:We appreciate your
testimony.Are there any questions?
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:Nor I.Thank you
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very much.
(The witness left the stand.
COMMISSIONER SMITH:Jackie Williams.
How about Ritchey Toevs?
RITCHEY TOEVS
appearing as a public witness, having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
last.
Please state your name and spell your
Ri tchey Toevs , T-v-s.
And what is your mailing address?
2841 West 1800 South r Aberdeenr 83210.
Are you here today representing yourself
or an organization?
Mysel f .
Thank you.Please proceed.
Thank you for taking the opportunity to
let us speak to you.First off let me thank those who
have showed up to testify, those who aren't able and we
all , of us here are the more fortunate in this society
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and I think we need to take that into account with
whatever you decide and we need to make sure that without
the opportunity provided to us have some relief.
When I first heard the rate increase
tried to think back to where does that culture start in
Idaho.Let me start here.Agricul ture based in Idaho
was developed with around a two-cent power rate.With
that two-cent power rater which was primarily provided
for hydro we poured cement, industries were built jobs
were created and our tax base ensued.Land previously
using gravity reel irrigation was converted to sprinkler
irrigation.That increased the consumptive efficiency of
water and that probably offset that whole power cost
because more water was left in the river to generate
power.
Then in the '60s we had wells drilled in
the 250-foot lift range , perhaps at about one horsepower
an acre was where efficiencies allowed us to produce
crops and sell them.Then later we had the high lift
proj ects Those were the river pumps or deep desert
ground that was 400 to 500 foot lift r perhaps a 700-foot
lift and then pressurized.It's the third development
that I feel is at risk.All those proj ects are probably
using one-half to two horsepower an acre.
The water is used on excellent soils.
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It I s by good agriculture.It's not a wasteful economy
that way but our current base rate along with perhaps a
failed power buy-back program has put many of these users
at serious financial jeopardy.These will be the acres
affected by not only the demand charge increase, but the
base rate increase.We will have systems converted from
every-year demand to a system only used on highest value
crops in rotation.That may be one out of four years or
perhaps not at all.Acres that are currently in corn or
sugar beets requiring four months of demand in energy use
will actually go to two-month demand in energy use such
as barley or wheat crop.
All of us in agriculture are selling into
a competitive marketplace and because I don't produce
crops on that higher value , the more expensive ground
doesn I t mean that the price for the commodity will go up.
We are not like an Idaho Power where there is no
guarantee of return.We cannot pass along increases in
costs of production to our customers.These increases,
proposed increases , will lead to rather than more revenue
generatedr I believe lower revenue generated.We cannot
generate more revenue long term certainly with increased
rate base.
We are much like Astaris in that as the
price goes up, the revenue generated may go down and in
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some cases way down.What can we do for Idaho as
agricul ture?I believe we can in agriculture be your
peaking plant facility.We will be the place you can
turn to to lower demand in times of use.We will support
and fund construction of coal-fired plants in eastern
Idaho to guarantee us an affordable consistent source of
energy.We can I t handle the swings, we can't find out
what marketplace it is going to drive us to, but we can
stand a three-and-half cent, perhaps, rate long term
and we will strive to become as most efficient as we can
in both production and energy use and we will encourage
conservation wherever possible.
I think these are times you need to make
the choices.Do we want to provide for jobs in
agricul ture and related business for the ci ti zens of
Idaho or do we want to keep residential rates low so the
unemployment check stretches the farthest?I mean it I S
a difficult position we're all inr but I know with the
facts presented , there will be an opportunity for you to
affect our future.Thank you.
COMMISSIONER SMITH:Thank you.Let I S see
if there are any questions.
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CROSS-EXAMINATION
BY MS. NORDSTROM:
In your experience , do you think most
farmers have the ability to shift their usage to off peak
times?
I think, given time , we definitely could
buildr design systems that way.It's not something
could walk out tomorrow and redo a farm plan around, but
definitely over time.I think I could convert most of my
high lift proj ects to peak use overnight just because
can t afford -- the benefit is going to be large enough.
The small ones where we're relying on canals that may
require 24-hour water use, it would be more difficult.
MS. NORDSTROM:Thank you.
COMMISSIONER SMITH:Wellr thank you very
much for your testimony.
THE WITNESS:Could I
- -
there was one
other item.
COMMISSIONER SMITH:Okay.
THE WITNESS:The high lift proj ects , if
you look at, I think the ground water users can provide
you with numbers of acres , but if we look at in- the
ground water use areas serviced by Idaho Power , we have
about 137 000 acres that's over a 400-foot lift.That
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perhaps may be up to a two horsepower an acre service, so
that'274r OOO horsepower right there.My power rates
are about $85 per horsepower.That is a net revenue
generated to Idaho Power of $27 million , approximately.
That is the kind of revenue you put at risk when you
increase rates , rather decrease.
COMMISSIONER SMITH:Thank you, sir.
(The witness left the stand.
COMMISSIONER SMITH:Okay m going to
back up and try again , Jackie Williams.
Okay, Neal Powell.
NEAL POWELL
appearing as a public witness , having been duly sworn
was examined and testified as follows:
EXAMINATION
BY MS. NORDSTROM:
Good afternoon.Please state your name
and spell your last.
My name Nealr Powell,
address 252 East 100 Northr
Blackfoot 83221.
Are you here today representing yourself
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or an organization?
I am representing myself and I am a
director of the Bingham Ground Water District.
Thank you.Please proceed.
Thank you very muchr Commissioners for
coming to east Idaho and affording us the opportunity to
address this rate case.I know it's the first rate case
in about 10 yearsr but we've seen the power cost
adjustments.One of the inconsistencies that has been
pretty prevalent is that social security says that the
cost of living has gone up 1.2 percent per year.They I re
not buying the same power, the same gasol ine , the same
food , the same heating oil that I am because all of those
have increased significantly more; however , I have no
control over social security.I have no control over
what I receive from the products of my farm.
Commissioner Hansen wanted to know if we
would be willing to pay the true cost of service.
experience of about 20 years ago dealing with the
Commission and several consultants was that it's very
difficul t to get to a true cost of service.It takes a
lot of talentr ability and number crunching to come up
wi th a true cost of service.m the first to say that
want to pay the cost the true cost , for what I'm getting
and that leads me to the next point I want to make.
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When I put in electric power pumping
converting from diesel pumping I had to go
- -
I had to
pay for a power line a quarter of a mile or a half miler
somewhere in that region , in other words , the growth I
had to pay for.m not sure but I don't think the
000 miles of additional transmission line that Idaho
Power has built has been built on this side of the state.
I have a son and some other relatives that live in the
state of Ada and I've seen a lot of growth over there.
Has anybody looked at saying okay, that growth needs to
be paid for by those people that are growing, not just
the irrigators?
I understand the irrigators were given a
break some rate case a long time ago and this may be a
makeup, so I really don I t know what to say about that
until I have some money to hire a consultant going into
it, but I do know that growth should be paid for by the
people that caused the growth.I had to pay for it why
don't they?Why do I have to pay for their growth?
And the other thing that's been mentioned
isr I'll deem itr the concept of efficiency.When I
flood irrigated my farm , it took a lot of water , it took
a lot of labor.When I converted to sprinkler
irrigation r labor went down.When I put electric power
in and put pivots it went down further , so I paid for
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an increased efficient use of water, which has been
mentioned by Kevin Michaelson who is a director on the
Aberdeen/American Falls Ground Water District also.
Between his district and miner there's almost OOO
farmers, 5,000 wells that you're dealing with , and you
heard on the costs per well from some of the people
already speaking here.You're talking about a big factor
in the Idaho economy.
The water issue is not yet resolved.
think the power issue will probably get resolved before
the water issuer but I know it's going to be a long time.
I know that I've been looking at going back to diesel
power if the cost of electric power goes up.The price
of diesel is going up.The price of potatoesr alfalfa,
grains seems to stay constant , the price of beef.People
tell me the prices are higher , higher higher and I said
compared to what , 10 years ago?No, it's about the same.
When we get back to the subj ect of growth
and who should pay for it, I know that in this area we
lost FMC/Astaris.I know that the INEEL is reducing
their power needs , and I say that because I managed the
electrical power system back 20 years ago , and I know
what they were doing then and at that time we developed a
cost apportionate figure that apportioned costs for the
power for the INEEL to the various programs based upon
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Wilder Idaho 155 POWELL
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their participation at the time of the peak power.
I don't know that anything like that could
be done for the broader spectrum of agricultural , but I
do know that it's time for creati vi ty and general
management attention to these types of things and that I s
all I have to say.Thank you.
COMMISSIONER SMITH:Thank you.Let's see
if there are questions.
MS. NORDSTROM:None from Staff.
COMMISSIONER SMITH:I'd just say that for
agricul ture I don I t think you want to use allocating
cost of use at the peak because Idaho Power is still a
summer peaker , but we don I t have time to debate it right
now.
(The witness left the stand.
COMMISSIONER SMITH:There's one name
called that no one answered to is Troy Murray.
All right, that brings us to the end of
the people who have signed up to testify today.
understand we're on a tight schedule because there I s
another meeting in this room at 4: 00, but if there is
anyone in the audience who feels that they have a comment
they 'd like to make , some topic maybe that wasn I t
covered , we I d be happy to have you come forward at this
time.
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Yes , ma'am.
RENEE PERSCHON
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.
My name is Renee perschon
e-r- s-c -h-o-
And what is your mailing address?
158 North 1200 Westr Blackfoot, Idaho
83221.I just have a couple of things.ve been
sitting here listening.I didn't plan to say anything
but I think there are a few points that haven't been
covered and I just wanted to briefly cover these things.
We came to Idaho 38 years ago from Utah
and the reason we came is because there was lots of land
and cheap power rates , and you have to have cheap power
rates in Idaho.It's the essence of farming in Idaho,
because we have a short growing seasonr especially where
we are , and , you know , we don't have that deep of soi 1 .
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It I S not like it's a productive banana belt or anything
like that.This is the essence of Idaho.
I can remember going to a meeting, I used
to be a librarian in Blackfoot , down to Twin Falls at the
Blue Lakes Country Club and Perry Swisher who was in on
the Public Utilities Commission gave a talk and he was
saying that - - and this is obvious - - the Public
Utili ties Commission is, that the whole idea of
electrici ty in the utili ties is that it's not like
anybody can have a power company.The people are bound
to whoever has the power company, as does the power
company, that when Idaho Power came here they are
entwined with Idaho, they are Idaho, and so it I S not like
they should - - you know , they should expect whatever
comes with the territory, and Idaho has to have cheap
power rates to survive.
Now when we came here , it used to be that
they were farming farther out on the desert where the
water was deeper and in the years that we have been here,
we have seen that those farms are being abandoned and the
reason is because you cannot make this economically
possible anymore and this is the thing that I s going to
happen that is going to creep and creep into our economy
further and further until the economy is going to be less
and less and it I s going to be hard to pay - - you know
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158 PERSCHON
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won t have a tax base like we do now , so I think this is
the thing we've got to look at is that Idaho Power , they
came here, that's what their responsibility is.Maybe
they're not going to get 11 percent but maybe the
farmers aren t going to get 11 percent either.
We're dairy farmers.We I ve been farming
and we know how to work hard and as you can see, the
farmers that are left are efficient, they re good
businessmen.I was very impressed with how these people
had their members together.These farmers are good.
They have tried every angle to make this thing work and
think that Idaho Power needs to work with them.You
know years ago the Idaho Power they would make
contracts with us and we would go out there and break out
the sagebrush,you know we broke out a lot sagebrush
picked a lot of rocks and we were hand in hand.They had
to have us and we had to have them.Now , I hope it'
still going to be that way.I hope that they don't want
to sell this power somewhere else and put us out of
business , because can that happen or are they going to be
our utility and work with us in Idahor and that's all I
wanted to say.Thank you.
COMMISSIONER SMITH:Thank you.Let's see
if there are questions.
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159 PERSCHON
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CROSS -EXAMINATION
BY MS. NORDSTROM:
Do you have any idea of how this type of
increase would affect your dairy farm?
Well , dairy farmers have been losing money
for quite a few years and it's not easy and, you know
the thing, the difference whether you make money in
dairying is how much do you have to pay for the feed.
The feed is about half of the price of your production
and so alfalfa is what you feed mainly cows.Alfalfa is
a high water you know , you have to have a lot of water
to produce that and that's one of the big things that'
produced out here now is alfalfa and it costs a lot and
now we I ve had drought , we've had these water problems.
They want the water down the whatever.It's a struggle.
I think that Idaho Power has to realize this is what
we're here for.You knowr they chose to be in Idaho , we
chose to be in Idaho we I ve got to work together.
COMMISSIONER SMITH:Thank you f or your
testimony.
(The witness left the stand.
COMMISSIONER SMITH:It appears that we
have come to the close of our hearing this day.
appreciate the attendance and attentiveness of the
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160 PERSCHON (X)
Publ ic83676
audience.Your testimony was excellent and it gave us a
lot to think about.We haveWe are on the road again.
hearings in Jerome tonight , McCall Wednesday, Payette
Thursday, and then we have our two weeks of technical
hearings and a public hearing in Boiser so we thank you
for your attendance and your attention and the hearing is
adjourned until 6:30 p.m. tonight in Jerome.
(The Hearing recessed at 3: 50 p. m.
CSB REPORTING
Wilder , Idaho
161 COLLOQUY83676
T H E N T I C T I O
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 1:00 p.m., on Monday, March 15, 2004, at
City Hall , 911 North 7thr pocatellor Idaho, is a true and
correct transcript of said proceedings and the original
thereof for the file of the Commission.
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CSB REPORTING
Wilder Idaho 83676
CONSTANCE S. BUCY
Certified Shorthand
162 AUTHENTICATION