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Home My WebLink About20040329Public Hearing McCall.pdf, , : I ORIGINAL !iECEIVED BEFORE THE IDAHO PUBLIC UTILITIES COMM.FS$ION IT) 1:.1 2034 MAR 29 Ar1 to: i I'UHLiG UTILITIES COrJMISSION IPC-E-O3-13 IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS INTERIM AND BASE RATES AND CHARGES FOR ELECTRIC SERVICE. ) CASE NO. BEFORE COMMISSIONER MARSHA SMITH (Presiding)COMMISSIONER PAUL KJELLANDER COMMISSIONER DENNIS HANSEN PLACE:Best Western 415 North 3rd McCall, Idaho DATE:March 17 , 2004 . VOLUME IV - Pages 302 - 335 CSB. REpORTING Constance S. Bucy, CSR No. 187 17688 Allendale Road * Wilder, Idaho 83676 (208) 890-5198 *(208) 337-4807 Email csb~spro.net !iHimERfT+:)T:. . . .... -.......);",:'~:' ?r: ":::" :r::' ::':;' ::~;'::Jf~"~ii!Ri'JmF:;:W:" For the Staff:Lisa Nordstrom, Esq. Deputy Attorney General 472 West Washington Boise , Idaho 83720-0074 For Idaho Power Company:Monica B. Moen, Esq. Idaho Power Company Post Office Box 70 Boise, Idaho 83707-0070 CSB REPORTING Wilder , Idaho 83676 APPEARANCES WITNESS Gerald Schroder (Public) Morgan Gonzalez (Public) Rand E.Walker(Public) Judy Van Komen(Public) Charles Taber (Public) Stanley Dean (Public) Rand E.Walker (Publ ic) EXAMINATION BY PAGE Statement Commissioner Kj ellander 304 308 Statement 309 Statement Commissioner Kjellander Commissioner Hansen 312 315 316 Statement 317 Statement Commissioner Hansen Commissioner Smith 319 323 324 Statement 327 Statement (Continued)331 CSB REPORTING Wilder , Idaho INDEX83676 MCCALL , IDAHO, WEDNESDAY , MARCH 17 2004,6:30 P. M. COMMISSIONER SMITH:Good evening, ladies and gentlemen.Welcome to a hearing before the Idaho Public Utilities Commission in Case No. IPC-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. The Public Utilities Commission of Idaho is three people.Those three people are before you tonight.On my left is Commissioner Paul Kj ellander who is also President of the Commission , and on my right is Commissioner Dennis Hansen.My name is Marsha Smi th and I I m the Chair of tonight I s hearing. The Commission process includes many stages , one of which will be a two-week technical hearing in Boise , but an important part of our consideration is getting out and listening to the members of the public and that I s why we're in McCall tonight.Another reason why we're in McCall is we received a letter , I no longer recall who it came from , but someone sent a letter and said you guys haven't been to McCall for a long time it's unreasonable to expect us to go to Boise and so I CSB REPORTING Wilder , Idaho 302 COLLOQUY 83676 said , you know , they I re right and we're here tonight to hear from you on this matter. In our procedure, you will come forward, Commissioner Kj ellander will swear you in and then we have a place at a table with a microphone so that the audience can hear you and we can hear you.All of our decisions have to be based on the hearings that we hold and the record that is created and that's why we have a court reporter here tonight who will take down verbatim everything that is said so that we will have it part of our official record.That I S important because all of our decisions may be appealed directly to the Idaho Supreme Court and they have to have a record upon which they can judge whether the Commission acted the way it should and based its decision on substantial evidence. We have two of the parties here with us tonight.Do you want to introduce yourself , Lisa? MS. NORDSTROM:Sure.My name is Lisa Nordstrom and Il m a Deputy Attorney General with the State of Idaho and I'm representing the Commission Staff. COMMISSIONER SMITH:It has an on/off on , but I don't know.Okay, for Idaho Power? MS. MOEN:I I m Monica Moen.I 1 m an attorney at Idaho Power Company and with me at the table CSB REPORTING Wilder, Idaho 303 COLLOQUY83676 is Celeste Schwendiman , an analyst, if you have any questions. COMMISSIONER SMITH:With that, if I get the list, we will just go down the list of people who have signed up to testify.Our first one is Gerald Schroder. GERALD SCHRODER appearing as a public witness, having been duly sworn CSB REPORTING Wilder , Idaho was examined and testified as follows: COMMISSIONER SMITH:And next Ms. Nordstrom will ask you a couple of questions to get you identified. EXAMINATION BY MS. NORDSTROM: Good evening. Good evening. Please state your name and spell your last name for the record. Gerald Schroder, S-c-e-r. And what is your mailing address? It I s 15361 Griffin , G-r-n, Lane, 304 SCHRODER83676 Caldwell. Are you here tonight representing yourself or an organization? I I m representing the AARP , Capital City Task Force , as a volunteer member of that group. Thank you.Please proceed with your testimony. Members of the Commission , my name is Gerald Schroder.I am a volunteer member of AARP' s Capi tal City Task Force. COMMISSIONER SMITH:Mr. Schroder , maybe you could take the mike and hold it up.That way, the people in the back could hear you. THE WITNESS:m sorry.The Capi tal Ci Task Force represents the interests of more than 153,000 Idaho residents age 50 and over.I thank and commend you for the opportunity to comment on Idaho Power' application to increase rates.AARP I S membership has a vested interest in ensuring that energy services are readily available for consumption and at prices that are just, reasonable and affordable.Considering the substantial impact that utility rates have on our daily lives, we feel that public participation in this proceeding is extremely important. Older Americans are particularly CSB REPORTING Wilder , Idaho 305 SCHRODER83676 susceptible to extremes in temperature.We 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 heal th concerns.Likewise , increases in energy rates can be especially devastating for those of us living on fixed and low incomes. Al though older Americans consume approximately the same amount of energy as do younger people , we devote a higher percentage of total spending to residential energy.This may be due to the fact that older Americans spend a greater proportion of income on home heating costs.Low income older families , in fact spend an average of 14 percent of their income on residential energy.Too often these families are forced to choose between risking their health and comfort by cutting back on energy expenditures and reducing spending for other basic necessities, such as health care or property taxes. For these reasons , we urge the Idaho Public Utilities Commission to be guided by specific principles that ensure that residential consumers pay only their fair share of energy costs.Two principles that AARP deems most critical for residential consumers are reliable, uninterrupted service and affordable rates. We urge you to take a thorough look at the Company CSB REPORTING Wilder , Idaho 306 SCHRODER 83676 filing. AARP also urges the Commission to ensure that adequate funding is available for bill paYment assistance programs for low income homeowners in Idaho. Similarly, the Commission must ensure that consumers are aware of the availability of assistance programs in order to maximize their participation.With the winter heating bills still upon us , the need for well- funded assistance programs is paramount.Without adequate funding and awareness , many residents who qualify for assistance will not receive the help they desperately need. We trust that this testimony has provided insight of pertinent value to the issues at hand.Thank you again for the opportunity of expression. COMMISSIONER SMITH:Thank you, Mr. Schroder.Let's see if there are any questions for you. MS. NORDSTROM:None from the Staff. MS. MOEN:No questions. COMMISSIONER SMITH:Commissioner Kj ellander. COMMISSIONER KJELLANDER:Just one. CSB REPORTING Wilder , Idaho 307 SCHRODER83676 EXAMINATION BY COMMISSIONER KJELLANDER: You said you were from Caldwell is that correct? Yes. Are you here specifically tonight in McCall to represent the McCall members of AARP or the surrounding area? , to represent the state office and the Capi tal City Task Force volunteer group which serves the Idaho AARP.I resideOur headquarters are in Meridian. in Caldwell.I am a member of the Caldwell chapter of AARP which is 518, but definitely speaking and here at the direction of the state office as a volunteer member of that Capital City Task Force. COMMISSIONER KJELLANDER:Thank you. COMMISSIONER SMITH:Thank you for your testimony, Mr. Schroder. THE WITNESS:Thank you.Should I leave my copy? COMMISSIONER SMITH:If you would leave that with the court reporter, she would very much appreciate it. (The witness left the stand. CSB REPORTING Wilder, Idaho 308 SCHRODER (Com) 83676 COMMISSIONER SMITH:Morgan Gonzalez. MORGAN GONZALEZ appearing as a public witness , having been duly sworn, was examined and testified as follows: EXAMINATION BY MS. NORDSTROM: Good evening. Hi. Please state your name and spell your last name. Morgan Gonzalez , G-o-n-z-a- And what is your mailing address? 317 East Lake, Suite A , McCall. Are you here tonight representing yourself or another organization? My business and myself. Thank you.Please proceed. I I d 1 i ke thank the Commission for coming here to McCall and responding to the letters that I had sent.Indeed -- COMMISSIONER SMITH:Could you hold it closer?People are indicating they can I t hear. CSB REPORTING Wilder , Idaho 309 GONZALEZ83676 THE WITNESS:I I m sorry.Indeed , every company should be able to increase rates to manage expenses.I personally think there is something ethically wrong with teaching a customer how to save money only to charge them more once they have practiced wha t you I ve preached.I know that if I was to raise the rates in my restaurant by 17 percent after I have informed my customers that they could save money by eating less and then serving them a smaller portion for more money, I'd lose customers.The big difference is that my customers have an option to eat somewhere else. I have no options , nor does my business. I understand the financial difficulties that a company may encounter with the need to upgrade but I find it hard to understand why a company that makes a profit would need to raise rates to afford new equipment , services and higher salaries.When you buy energy, you do not buy it to lose money.All Idaho citizens are within your market.There is no competition.Do us all a favor and supply us with energy, efficient lighting and appliances.Don I t make me pay for the increased use in metro areas. Here I S a scenario, you come into my restaurant, I inform you of the special of the day, then gi ve you a menu that has higher prices than that of the CSB REPORTING Wilder, Idaho 310 GONZALEZ83676 special.You choose the special , save money, glad of your choices ,you eat and prepare to leave , your ticket comes and the special price is on it and a charge for the chair and the table usage and cleaning and wait staff fees.The special amount has gone from $7.00 to $8. before taxes, how would that make you feel? I want to provide my employees with a bet ter 1 i ving, but it I s going to be a hard thing to do if 17 percent of the 20 percent I was going to give them has to go to you.How is that fair?How fair would it be if I charged you more so I could upgrade my phone system or hire a staff to sell my business?I know that if I want to make more money, I must streamline.Have you cut the corners , pinched the pennies , has anyone taken the salary cuts needed to save money? Rate increase , I'm for it, not 17 percent, but whatever would be necessary after some serious cost cutting first , wages in the upper echelon.I 1 m okay if the raise is - - if the rate raise is in relation to inflation , but show me that you I ve done all that you can do to save money first.Just like you have asked me to do wi th my power, conserve firs t . I have in the past year taken the lighting in my store and gone to all this cost or energy saving concepts that Idaho Power has given me in my monthly bill CSB REPORTING Wilder , Idaho 311 GONZALEZ83676 and I have saved money, but the amount of money that I' saved in the past year is equal to what the rates are about to be raised.I thank you for this time. COMMISSIONER SMITH:Thank you, Mr. Gonzalez.Let I S see if there are questions. MS. NORDSTROM:None from Staff. COMMISSIONER SMITH:Commission?Thank you very much. (The witness left the stand. COMMISSIONER SMITH:Rand E. Walker. RAND E. WALKER, appearing as a public witness , having been duly sworn was examined and testified as follows: THE WITNESS:Rand E. Walker , P.O. Box 632 , McCall , Idaho, 905 Davis Street. EXAMINATION BY MS. NORDSTROM: Is that here in McCall? Yes, it is. Are you here tonight representing yourself or an organization? CSB REPORTING Wilder , Idaho 312 WALKER83676 Just mysel f . Thank you.Please proceed. Reading through this COMMISSIONER KJELLANDER:Mr. Walker, could you hold that? THE WITNESS:Reading through this a little bit, I notice that this hearing is entirely separate from the PCA.First, Illl take just a second and commend you folks for your efforts and also I I d like to commend you for your website.I I ve used it and submitted letters and stuff , comments on various proj ects.It I S excellently run and I always got a response.It I S an excellent, excellent idea to go with that. I noticed that this is entirely separate from the PCA which is an annual affair.What bothers me is the cute little ad on TV that said no power increase since 1996, nicely done , but this is 2004.I would rather have a two percent increase per year for eight years, and that would be 16 percent, than have a 17 percent increase once every eight years.It would be easier.I have been AARP' We all get AARP' d when we turn 50 and I'm a member of that organization, which is fine, but I I m not representing anybody but myself.Why can I t - - perhaps I could address this to the Idaho Power CSB REPORTING Wilder , Idaho 313 WALKER83676 people, why do we have to wait eight years with no general rate increase and then do it all at once? could be smaller , less offensive, easier to schedule. Nobody is bl ind .We all know what I s happening at the gas pump right now.Costs are going up. The cost of your service vehicles is going Expenses are higher.up.People understand that, but it would seem to me that it would be much easier if we could do this in smaller bites rather than have to wait eight years and then do a large one which would generate tension and heat against the Commission even , I would imagine, when you deal with different groups, irrigators, large businesses.It I S hard to schedule in a large increase like that.Why can't it be done in smaller ones?Is there a reason?Can it only be done once a year with the PCA and does that preclude a small general increase just to handle things?I don't know , why all at once? COMMISSIONER SMITH:Does that conclude your statement? THE WITNESS:Yes. COMMISSIONER SMITH:Let's see if there are questions. MS. NORDSTROM:None from the Staff. MS. MOEN:No questions. CSB REPORTING Wilder , Idaho 314 WALKER83676 COMMISSIONER SMITH:Questions from the Commission.Commissioner Kj ellander. EXAMINATION BY COMMISSIONER KJELLANDER: Mr. Walker , in your residence, is it all electric? Yeah. That's helpful , and that's typically the way it is in the McCall area; is that correct? A lot of people here have all electric and then they back it up wi th wood.They'll have wood stoves or fireplaces and stuff and if they use that , then the electrici ty won't kick in.We have very limited gas. Gas here is not underground , so power is basically the way to go for heating.External tanks mounted above ground outside your cabin are not really too good when you have ice fall from your roofs and stuff like that, so most people are power , electricity. So fuel source switching really wouldn I t be an option in this area? It's not a whole lot of fun , it wouldn' be.m not complaining at the price I'm paying now. question is why does it have to be 17 percent once every CSB REPORTING Wilder, Idaho 315 WALKER ( Com)83676 eight years rather than two percent a year or one-and-a-half or something that people could schedule in their budget? COMMISSIONER SMITH:Commissioner Hansen has a question. COMMI S S IONER HANSEN:I just have one quest ion. EXAMINATION BY COMMISSIONER HANSEN: Are you satisfied with the quality of service that you receive from Idaho Power? Absol utely, and I am greatly in favor of a regulated market.I have no trouble with Idaho Power being a monopoly as long as there's an independent commission that is keeping an eye on things and stuff, you know, this is genius, I mean it works.Idaho Power is proof that it works.Okay, my comment is basically why an eight-year gap in a rate increase when there's an annual PCA hearing anyway, right?I don I t know the particulars of everything that's covered during those PCA increases , but a general rate increase it would seem would be easier on the consumers and customers if it would just happen once a year. CSB REPORTING Wilder, Idaho 316 WALKER ( Com)83676 Thank you. COMMISSIONER SMITH:Thank you, Mr. Walker. (The witness left the stand. COMMISSIONER SMITH:Judy Van Komen. JUDY VAN KOMEN appearing as a public witness , having been duly sworn was examined and testified as follows: EXAMINATION BY MS. NORDSTROM: Good evening. Good evening.My name is Judy Van Komen n K-o-m-I reside at 614 Syringa Drive in McCall , Idaho. Are you here tonight representing yourself or an organization? Representing myself. Thank you.Please proceed. I actually did not come here for testimony.I came here really for education; however since the only way I could say anything was to put my name down , I have come totally unprepared, but I do want CSB REPORTING Wilder , Idaho 317 VAN KOMEN83676 to applaud Mr. Gonzalez.I thought his analogy was very close to what mine would have been, also.I find it almost repulsive to see advertisements by Idaho Power on prime time TV telling me how many lines they have provided us.When they I re asking for substantial raises I think that I s probably not cost effective.They could do the same thing in a mailing through our bill and not pay the high prices that they pay on television. I also find it strange or hard to understand why the small business gets the biggest rate hike.I kind of feel that small businesses are really, really struggling right now just to stay alive in the big corporate world.I just think we should be aware of how Idaho Power does spend their money.Are they really taking as many cuts necessary as Mr. Gonzalez stated? we really -- have we really looked at CEO wages, raises? Also, it came to my attention that Idaho Power was now buying land to put their poles on instead of using road right of ways.m wondering how cost effective that is and if that land is being bought , is it then taken of f our tax roll s so then we are asked to make that up, also , as a hidden cost? And let's see , I forgot what else.I just don I t know how cost effective any of that would be, so like I said, I wasn I t really prepared to come up here and CSB REPORTING Wilder , Idaho 318 VAN KOMEN83676 speak , but I did want you to know my concerns as well since you took the time to come here.Thank you. COMMISSIONER SMITH:Thank you for your comments and whenever I find myself in that situation , I just realize that my entire life is preparation for that moment and I'm prepared. THE WITNESS:I guess so.Thank you. COMMISSIONER SMITH:Any questions? MS. NORDSTROM:None from Staff. MS. MOEN:No questions. COMMISSIONER SMITH:Thank you for your testimony. (The witness left the stand. COMMISSIONER SMITH:Charles Taber. CHARLES TABER appearing as a public witness , having been duly sworn was examined and testified as follows: EXAMINATION BY MS. NORDSTROM: Please state your name and spell your last name. Yes, my name is Charles Taber , T-a-e-r. CSB REPORTING Wilder , Idaho 319 TABER83676 Your mailing address? Pardon? Your mailing address? My mailing address is Post Office Box 2195, McCall, Idaho. Are you here tonight representing yourself or an organization? Myself. Thank you.Please proceed. Thank you.Thanks for giving the opportunity to speak to you in person by coming to McCall.I sincerely appreciate that.I learned of this by reading an article in the local newspaper , the Star News, and so that I s my basic background information. was astounded at the rate hike that Idaho Power is asking for.17.7 percent seems like a big whopping increase in rates.I did have a little problem with that didnlt seem real palatable to me as a consumer. I have no complaints about the service recei ve from Idaho Power , commendable service, no doubt. I really appreciate that kind of dedication by especially a monopoly.They do a good job of not taking advantage of us.They do have us in a little bit of a bind that way, so it seems like a big rate hike.I would like to recommend that the Commission turn them down for the time CSB REPORTING Wilder , Idaho 320 TABER 83676 being on that request for a 17.7 percent hike and ask them to go back to the drawing board and do a little more work on figuring out if they need that much just how they're going to get it. I would like to recommend that they take a look at changing the approach that they have for their , I guess you would call it, their schedules for rates. looks to me like at this point the people who use the least amount of power pay the highest rate and the people who use the most amount of power , they pay the lowest rate.I'd like to suggest that we're not talking about the same kind of product here that you might expect to find in the supermarket with power , with the actual resources being strained on a national level and I think it might be wise to take a little different look at this now and go ahead and at least charge a fair rate clear across the board and let me make the decision as a consumer if those items that these large power users are providing, let me decide if I want to pay more for that product. Let them pass that cost on to the consumer rather than forcing the small power user to subsidize that.It doesn I t seem to make sense to me.I think we should promote some kind of a conservation effort instead of rewarding people who use more power.The more power CSB REPORTING Wilder , Idaho 321 TABER83676 you use, the less it's going to cost you , that doesnl make sense to me.I'll pay more for the produce that you know , the farmer has to pay more for the power to pump that water to grow that produce , let me make my own decision of whether I want to pay for that as a consumer rather than forcing me as an individual ratepayer to subsidize. I understand that rate increases are going to happen.Everything is costing more.That I S not hard for me to rationalize , but I don I t agree that the smallest user should subsidize the biggest user. doesn't seem to promote conservation , so please, deny them this monstrous overburdening rate hike.Make them go back to the drawing board, figure out a more equitable way to do this. COMMISSIONER SMITH:Let's see if there are any questions. MS. NORDSTROM:None from Staff. MS. MOEN:No questions. COMMISSIONER SMITH:From the Commission? COMMISSIONER HANSEN:I have one. COMMISSIONER SMITH:Commissioner Hansen. CSB REPORTING Wilder , Idaho 322 TABER83676 EXAMINATION BY COMMISSIONER HANSEN: Just kind of following through your testimony there, let me ask you , do you think a customer should pay for the cost of service to provide them power no matter - - I know you talked about charging evidently different rates for people that use more power , you referred to that , but how do you feel about allocating the cost to the customers based on the cost of serving them? I don't understand the question. sorry, could you be more specific or break it down a little bit for me? Well , let me just put it this way:Let' say it costs so much to provide power for an irrigator do you feel , then , that that irrigation customer should pay for that cost to provide their power , a business customer should pay the cost that it costs to provide them the service, a residential customer should pay the cost of the Company to provide their electrical service; is that what you mean? Okay, I think are you - - it sounds like a subsidizing process to me.Are you saying that - - you' asking me whether I think that the consumer at large CSB REPORTING Wilder , Idaho 323 TABER (Com)83676 should pay for initial start-up costs of supplying that power to a business? , I'm just talking about the cost of service.I probably confused you. I thought maybe I wasn I t clear. I'll just leave it at that.I didn I t mean to confuse you. I don't feel like there should be a discount for power.I think that a discount for power works against the ideal that we should be striving for this point in time. COMMI S S IONER HANSEN:Okay, thank you. think I understand where you I re coming from. EXAMINATION BY COMMISSIONER SMITH: I guess I need some clarification and I'll try Commissioner Hansen I s question in a different way. The Company has considered a pool of costs that it I s incurred to provide service, and there are different theories and different methods of taking those costs and allocating them to various customer classes so you can compute what I s known for us as a cost of service.You compute a cost of service that applies to residential CSB REPORTING Wilder , Idaho 324 TABER (Com)83676 customers, irrigation customers , small commercial , large commercial and I guess his question was, I guess depending on the allocation method that you use, do you believe that once you get to a point where you've got a cost allocation and a cost of service , should each customer class as a whole recover its own cost of service? Yeah, I think I agree with that.We have a lot of that in McCall.It I S growing, the community is growing, and I personally feel that the developer should pay for the cost , the costs incurred by their development.YouThey're going to profit from that. know , I do feel that that cost should not be borne by the establ ished population.It I s just overbearing. So in other words, irrigation rates should not be kept artificially low , in other words, their class doesn't recover their cost of service and other people make that up? That I s the way it works in the rest of the world , so I really don't see why Idaho Power should be singled out, especially not the Power Company, because it's a resource we I re talking about, a basic resource of water and air and we need to be working towards conserving this stuff and finding out better ways to produce it. CSB REPORTING Wilder , Idaho 325 TABER (Com)83676 I need a clarification on your testimony about people who use more should pay more and people who use less should not subsidize people who use more , did I misunderstand your point? Yes, I was recommending an equal scale. A uniform percentage increase? Pardon? A uniform percent increase?I don't know what you mean by equal scale. According to the article that I read in the Star News, it gave three scales , three graduated scales, with residential users paying the most for the amount of power that they used and then there was another scale in between and then the largest consumers, say, I suppose it would be, like, maybe industrial Simplot , Micron? - - right , they get the best rate. I III get the article and then I I m sure I'll understand. I don't think that's fair.I'll pay more for the computer when it comes on the market and I can make that choice if I want to pay that much for that and I don't want to subsidize it. COMMISSIONER SMITH:Thank you very much for your testimony.We appreciate it. CSB REPORTING Wilder , Idaho 326 TABER (Com)83676 (The witness left the stand. COMMISSIONER SMITH:m now to the end of the list of people who have signed up to testify, but if CSB REPORTING Wilder , Idaho there are others in the audience who wish to come forward at this time , we'd be happy to hear from you. STANLEY DEAN appearing as a public witness, having been duly sworn was examined and testified as follows: EXAMINATION BY MS. NORDSTROM: Good evening. name. Hi. Please state your name and spell your last Stanley Dean , D-e-a- Your mailing address. O. Box 2352 , McCall , Idaho. Are you here tonight representing yourself or an organization? Myself and my business, Idaho Senior Insurance Services Financial. Thank you.Please proceed. 327 DEAN83676 As the lady that testified earlier , I came here completely unprepared because I didn I t have the information that I've got in front of me now.I think there's been some points well taken with regard to some of the things that I was concerned about, which is not having a uniform rate.For instance , you show irrigation proposed average base rate of 4.65 percent residential at - - 4.65 cents, residential rate of 6. and small commercial at 7.66.I concur wi th Mr. Taber that I don I t think that it I S fair to expect a small business nor a residence to subsidize the use of a large corporation. I mean , use is use no matter how you cut it, but part of the reason I decided to testify is that was looking here under Terri Carlock's accounting - - the accounting section administrator in which it says Carlock recommends a return on common equity in the range of 9. to 10.5 with a point estimate of 10 percent and recommended overall weighted cost of capital in the range of 7.42 to 7.88 with a point estimate of 7.65 percent. The question I have regarding that, is this the rate of return to the Company on that , on the common equity? COMMISSIONER SMITH:Mr. Dean , the format for tonight, unfortunately, doesn't allow questions and answers.After we conclude the hearing, we can see if CSB REPORTING Wilder , Idaho 328 DEAN83676 there's somebody here who can address that individually, but the setup for a public hearing is we hear your comments and we get to ask you questions, but you don' get to ask us questions. THE WITNESS:I understand , but the point is that the return is a factor , the return on equity is a factor -- COMMISSIONER SMITH:Yes. THE WITNESS: - - in the pricing estimate. COMMISSIONER SMITH:It is. THE WITNESS:And unless you know whether that's - - whether I have an answer to that question as to whether or not I should question further or whether should concur with the situation or question it further but anyway COMMISSIONER SMITH:You can pose a hypothetical and give us your thoughts. THE WITNESS:Well , the reason it came to a head as far as I was concerned is the fact that I am a registered representative, I sell stocks and bonds and don I t know anywhere that's paying 9.5 to 10.5 percent right now on common equity as an ongoing legislative type of a return , so obviously, that's a question that I have in my mind as to whether or not it's fair to use an CSB REPORTING Wilder , Idaho 329 DEAN83676 underlying return assumption that is going to be essentially locked in , because the ratemaking process is not something that's - - in my experience , I I m almost 70 years old and I don't ever see them going down , they always go up, so it was a question I had and basically, I do appreciate the opportunity to sit here and discuss my concerns, because as a senior citizen , Il m concerned with -- I'm dealing with senior citizens.A lot of people are on fixed incomes that can't afford to buy insurance because of the cost of living and to impose a 17.7 percent increase on a very basic commodity, which is energy, it makes it even less - - have them even less extra income to make decisions that affect their health and their welfare , so I do appreciate the opportunity to bring those forward to you , okay? COMMISSIONER SMITH:And we appreciate you doing that.Are there questions? MS. NORDSTROM:None from Staff. MS. MOEN:No questions. COMMISSIONER SMITH:Thank you very much for your testimony. THE WITNESS:Thank you. (The witness left the stand. COMMISSIONER SMITH:Is there anyone else who wishes to testify?If not, then -- yes, sir. CSB REPORTING Wilder , Idaho 330 DEAN83676 , 13 MR.WALKER:Could just ask a question? COMMI S S IONER SMITH:Mr.Walker. MR.WALKER:Yeah. COMMISSIONER SMITH:Not now.In a minute. THE WITNESS:I I d like to make a comment again. COMMISSIONER SMITH:Okay.Mr. Walker please remember that you're still under oath. RAND E. WALKER, appearing as a public witness , having been previously duly sworn , resumed the stand and was further examined and testified as follows: THE WITNESS:Okay, looking at the way this information is presented and broken down into categories, residential , small commercial , large commercial , industrial and irrigation , five categories, would like to ponder why it's presented in this form. Small - - residential is the highest cost, obviously. You I ve got 10,000 users and you have to send out 10,000 bills, collect 10,000 paYments , you have to have service to 10 000 houses , and Micron uses 10,000 times the power, but it's only one bill and okay, so there I s a difference CSB REPORTING Wilder , Idaho 331 WALKER83676 in scale, so it seems to me logical that the residential be the most expensive to provide because you I ve got to maintain lines to all the individual houses, but why can't residential costs be shown? It just shows a 17 percent rate increase. There's nothing -- it doesn't say, you know , gee whiz we've got 30 000 new customers , but the cost of that power line itself , the cable , the fuel in the trucks to run it , all of this isnl t part of a PCA or it shouldn' be, it's a fixed expense.We can I t help the price of fuel going up, so it seems to me it would be more user friendly if we could show why residences are the most expensive because of all the individual service and why irrigators - - irrigators use a lot of power, it's true but you III send a guy with 4 000 acres that I s pumping uphill out of the Snake River , he gets one bill.He'll use as much power as 5 000 houses, but itl s still one power line instead of 10,000 little ones, so I understand that.I just don't understand why information has to be presented in such a way that it looks like residential costs more than everything else when it does and it could be shown more effectively. COMMISSIONER SMITH:I would just comment that the filing in this case is in many four-inch three-ring binders that might span most of the length of CSB REPORTING Wilder, Idaho 332 WALKER83676 this table and so if you really have a deep interest, there is probably more information about cost of service for the different customer classes available than reasonable people can digest in the two weeks that we' going to try and hear it in, so the information is there, but it can't all fit on those pieces of paper that you have. THE WITNESS:Okay, thank you. COMMISSIONER SMITH:Commissioner Kj ellander. COMMISSIONER KJELLANDER:Isn't the testimony on the website? MS. NORDSTROM:It is. COMMISSIONER SMITH:It is; so on our excellent websi te you can THE WITNESS:All those binders is right there on the -- COMMISSIONER SMITH:All those binders are somewhere in the digital world.Thank you , sir. THE WITNESS:Thank you. COMMISSIONER SMITH:Is there anyone else who wishes to make a statement or provide testimony tonight?If not , the Commission will thank you very much for your thoughtful comments and your attendance tonight. We do appreciate your efforts in coming out and we will CSB REPORTING Wilder, Idaho 333 WALKER83676 carefully consider your comments. We have a series of hearings.Tomorrow we will be in Payette, then we start our two weeks of technical hearings and we will have a public hearing, also , in Boise; so with that , we are adjourned until 2: 30 p. m. tomorrow in Payette.Thank you. (The Hearing recessed at 7:20 p. CSB REPORTING Wilder , Idaho 334 COLLOQUY83676 T I C T I This is to certify that the foregoing proceedings held in the matter of the application of Idaho Power Company for authority to increase its interim and base rates and charges for electric service commencing at 6:30 p.m., on Wednesday, March 17 , 2004, at the Best Western , 415 North 3rd , McCall, Idaho, is a true and correct transcript of said proceedings and the original thereof for the file of the Commission. CONSTANCE S. BUCY Certified Shorthand 1\1111111'" \\' \ C S. II" ":.. . ".,,'" " "'" .::- ~ ,". ,.:: ~ "' . If' '~"-- -:;.~~ ,..~::. = 0 CJ~ (Ji \. A'.ft' -:. ~ " Vg~ . ~ ~- ~-:., _""""" 't" V1'.II f" , ... I" '111111\11\ CSB REPORTING Wilder , Idaho 335 AUTHENTICATION83676