20080211Vol III Boise.pdf

OR\G\NAL.BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF I DAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE
STATE OF IDAHO
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) CASE NO. IPC-E-07-08
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BEFORE
COMMISSIONER MACK REDFORD (Presiding)
COMMISSIONER JIM KEMPTON
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PLACE: Commission Hearing Room
472 West Washington
Boise, Idaho
DATE: February 7, 2008
VOLUME III - Pages 49 - 66
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CSB REPORTING
Constance S. Bucy, CSR No. 187
23876 Applewod Way * Wilder, Idaho 83676
[phone] * [phone]
Email csb(Ðheritagewifi.com
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1 APPEARANCES
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3 For the Staff:Weldon Stutzman, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83720-0074
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For Idaho Power
Company:
Barton L. Kline, Esq.
Idaho Power Company
Post Office Box 70
Boise, Idaho 83707-00707
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APPEARANCES
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1 BOISE, IDAHO, THURSDAY, FEBRUARY 7, 2008, 7:00 P. M.
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4 COMMISSIONER REDFORD:Well, folks, we
5 can start this hearing. Welcome this evening. My name
6 is Mack Redford and I'm a member of the Public Utili ties
7 Commission. Seated at my left is Jim Kempton, another
8 member of the Public Utili ties Commission and tonight is
9 a hearing, a public hearing, for the public to give
10 comments on the case known as in the matter of the
11 application of Idaho Power Company for authority to
12 increase its rates and charges for electric service to
13 electric customers in the State of Idaho. This case
14 number for the Public Utilities Commission is IPC-E-07-8.
15 Let me explain to you a little bit how
16 this works. The purpose tonight is to take public
17 testimony and we will ask you, for those people who want
18 to testify, to please come up and take a seat in the
19 witness chair. I know that's a little daunting
20 sometimes, but at any rate, it's a comfortable chair and
21 we will ask that you be sworn as this is a public hearing
22 and one that's a matter of record, and you will be
23 offered the opportunity to give your thoughts and your
24 feelings about this Public Utilities rate case.
25 Mr. Weldon --
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49 COLLOQUY
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1 MR. STUTZMAN: Stutzman.
2 COMMISSIONER REDFORD: Weldon Stutzman,
3 excuse me, I work with him every day, Mr. Stutzman mayor
4 may not ask you some questions and, of course, Mr. Bart
5 Kline of Idaho Power Company is here and he may as well
6 ask you some questions. Don't be frightful of their
7 asking you questions because they're generally gentle in
8 nature if they ask any questions at all, so having said
9 those things and before you testify, if you have any
10 questions, please feel free once you take the witness
11 stand to ask those questions and I'LL try to answer them
12 best I can.
13 Again, the hearing is not for the purpose
14 of gaining information from Mr. Kline or from the Public
15 Utilities Staff. It is simply for the purpose of your
16 giving your testimony as to these proposed rate changes,
17 so the first witness I will call is Mr. John Weber or
18 Weber. Thank you, Mr. Weber, if you would please take a
19 seat.
MR. STUTZMAN: Mr. Chairman.
COMMISSIONER REDFORD: Have I missed
22 something?
23 MR. STUTZMAN: Perhaps we should turn the
24 speaker down first of all, start with the appearances of
25 the parties.
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1 COMMISSIONER REDFORD: Oh, of course, I'm
2 sorry, please excuse us for a minute. Take a seat and
3 we'll take the appearances of the parties, and I don't
4 think I'm on the speaker at all, but at any rate, if
5 you'll speak up, our court reporter will be able to hear
6 you. Mr. Kline.
7 MR. KLINE: Thank you. My name is Bart
8 Kline. I'm an attorney.
9 (Pause in proceedings.)
10 MR. KLINE: I'll say it again. My name is
11 Bart Kline. I'm an attorney with the Idaho Power Company
12 and I'm here representing Idaho Power.
13 COMMISSIONER REDFORD: Thank you.
14 MR. STUTZMAN: Thank you, Mr. Chairman,
15 Weldon Stutzman. I'm a Deputy Attorney General
16 representing the Commission Staff.
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CSB REPORTING
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51 COLLOQUY
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1 JOHN WEBER,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
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5 COMMISSIONER REDFORD: Thank you, Mr.
6 Weber. Unless you have some questions, go right ahead
7 and offer your testimony to be taken down by the court
8 reporter and made a part of the record.
9 THE WITNESS: Okay, I'd like to thank the
10 Commissioners and the Staff and Idaho Power for holding
11 this public hearing. I attended the workshops on this
12 rate case in September and I was not opposed to the
13 original Idaho Power proposal and I'm not opposed to the
14 agreement as it stands now. There's one other thing that
15 I think would be beneficial to add in future rate
16 increases if it's not an option for this one and I
17 believe the PUC and the utili ties should conform to the
18 Idaho State Energy Plan, the current one was 2007, and I
19 just wanted to read one small portion of this that I
20 think will keep rates down in the future and would be a
21 real good case study for new rate designs for new
22 increases, and this is on page 52 of the 2007 Idaho
23 Energy Plan.
24 E-6 states: "The Idaho PUC and Idaho
25 utilities should consider adopting rate designs that
CSB REPORTING
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52 WEBER
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1 encourage more efficient use of energy.Idaho's
2 generally low electricity rates provide customers with a
3 limi ted incentive to reduce their electricity use.
4 However, the current cost of new resources is
5 substantially higher than the cost of existing resources
6 on which these low rates are based. This mismatch
7 between the rates that consumers pay for electricity and
8 the cost to utili ties investing in new resources presents
9 a barrier to increased investment in cost-effective
10 energy efficiency . Innovative electric utility rate
11 designs can help overcome this barrier by better aligning
12 the incentives of ratepayers with the costs faced by
13 utilities. Examples of innovative designs include tiered
14 rates" -- I believe Idaho Power currently has a
15 two-tiered system in the summertime. I would propose a
16 three-tiered system would be better. Back to quoting the
17 Idaho Energy Plan "which charges a higher rate for
18 larger quanti ties of electricity used in a given month or
19 time of use rates that change by the season and perhaps
20 by the time of day."
21 I would also would suggest to the
22 Commissioners and Idaho Power that we have peak and off
23 peak time-based metering for all residential, commercial
24 and industrial, and now back to finishing a couple more
25 sentences and I'll be done. "The committee encourages
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53 WEBERPublic
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1 Idaho utili ties consider rate designs that provide
2 customers with more financial incentives to conserve
3 energy and reduce the need for expensive new resources.
4 The committee is mindful, however, that many Idaho
5 ratepayers continue to rely on electricity for space
6 heating and urge utilities to consider impacts on these
7 customers in their rate design decisions," and that's all
8 I have, so I'm open to any questions.
9 COMMISSIONER REDFORD: Any questions from
10 counsel?
11 MR. KLINE: No.
12 MR. STUTZMAN: Just one, Mr. Chairman.
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14 EXAMINATION
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16 BY MR. STUTZMAN:
17 Q Thank you, Mr. Weber, I appreciate your
18 comments. Are you representing an organization this
19 evening?
20 I'm just representing myself. I alsoA
21 manage the largest chain of body shops in the State of
22 Idaho, but I just believe that through time-based
23 metering and seasonal metering and tiered metering that
24 we will reduce the peak load. Idaho Power's maj or
25 deficiency is in June, July and August during the peak
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1 time of day and we won't need much new generation if we
2 get the peak demand under control, and right now the AC
3 cool credits seem to be helpful, but I think we need
4 time-based metering so there's actually some financial
5 incenti ve to use electricity during the off peak times.
6 MR. STUTZMAN: Thank you. That's all I
7 had.
8 COMMISSIONER REDFORD: Before you step
9 down, Mr. -- is it Weber or Weber?
10 THE WITNESS: It's Weber.
11 COMMISSIONER REDFORD: Just let me confirm
12 that your address is 9535 West Cory in Boise, Idaho.
13 THE WITNESS: Yes, sir.
14 COMMISSIONER REDFORD: Thank you very
15 much. You may step down.
16 THE WITNESS: Thank you.
17 (The witness left the stand.)
18 COMMISSIONER REDFORD: The next witness is
19 Kathryn McNary.
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1 KATHRYN McNARY,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
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5 COMMISSIONER REDFORD: Would you please
6 state your full name and give us your address?
7 THE WITNESS: My full name is Kathryn
8 Michele McNary. My address is 1511 Missoula Way,
9 Caldwell, Idaho, 83605.
10 COMMISSIONER REDFORD: Thank you. You may
11 go ahead.
12 THE WITNESS: Thank you, Chair. To start
13 off, Idaho Power wants an increase and we're not totally
14 opposed to that. I belong to an organization called
15 ICAN, Idaho Community Action Network, but the increases
16 are way above what has been recommended by the Staff.
17 For example, the resident services are recommended by the
18 Staff as 1.37 percent, but Idaho Power wants 4.7 percent.
19 Big businesses have come together and have
20 talked with Idaho Power and asked that they reduce their
21 rates, the rate that they want in half, kind of in half
22 of what they want, and then increase the residents. Now,
23 I particularly know that that is hard on people to raise
24 it up 4. 7 percent. I had trouble last year paying my
25 electric bill. I had my electric turned off for a couple
CSB REPORTING
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1 of days because I could not come up with the money that
2 they're as king for and that was after the increase they
3 got last year.
4 Now they're asking for 4. 7 percent and I
5 know I could not pay for that, and I know a lot of
6 people, especially in our organization and out of our
7 organization, that have hard times paying their electric
8 bill during the summer because of the fact that they've
9 got air conditioning and things like that.
10 Now, I can' t live without air conditioning
11 personally because of the fact of my disabilities. If I
12 get too hot, I may just pass out, so that's what I had to
13 say.
14 COMMISSIONER REDFORD: Well, thank you
15 very much. Is there any questions from any of the
16 attorneys?
17 MR. STUTZMAN: No questions.
18 COMMISSIONER REDFORD: Thank you very much
19 for your time.
20 THE WITNESS: Thank you.
21 (The witness left the stand.)
22 COMMISSIONER REDFORD: The next witness is
23 Ron Matthews.
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CSB REPORTING
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1 RON MATTHEWS,
2 appearing as a public witness, having been duly sworn,
3 was examined and testified as follows:
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5 COMMISSIONER REDFORD: Please be seated,
6 sir, and you may offer your comments.
7 THE WITNESS: May I stand, please?
8 COMMISSIONER REDFORD: Yes, you may.
9 THE WITNESS: Thank you. My name is
10 Ronald Matthews. I live at 15926 Sunburst Drive,
11 Caldwell, Idaho. That's north of Caldwell and it's been
12 mentioned that people on limited incomes, sir, are
13 already having difficulty paying their power bills and
14 it's going to get a lot worse. Some people have noticed
15 we're in a recession. I've been tracking the
16 recessionary power for a couple of years, so it was no
17 surprise to me. There's enough to even cause a
18 depression if the government is not careful and as it is,
19 WICAP, an organization serving poor people in Canyon
20 County, Payette County, they expect about somewheres in
21 the neighborhood of 100 to 150 shut-offs of power by
22 March the 3rd, because that's the day that Idaho Power
23 will go around and shut off power and that's going to
24 impact a lot of people, people on limited incomes.
25 My position is basically, and I hope I
CSB REPORTING
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1 have enough time to show it, is that Idaho Power should
2 not have any rate increase at all and the reason that I
3 position that is that Idaho Power, for instance, in their
4 2004 planning, they planned on cogeneration and looking
5 into installing more coal plants. The ugly process of
6 democracy rose its head and stopped, for instance, the
7 cogeneration plant that was scheduled for the Middleton
8 area and also some rulings were passed that would pretty
9 much prevent coal from being used.
10 In both of these cases a product has to be
11 purchased and then a product that is used to produce the
12 power. That means that that power is more costly in the
13 long run. There's also the little fact that in both
14 cases there are pollution problems to consider and the
15 pollution as far as air pollution, things like that on
16 the cogeneration plant that was scheduled for Middleton
17 wasn't all that great, but the noise was the maj or noise
18 pollution item there, and there's several hundred housing
19 units that are scheduled to go in right next to it.
20 Now, the problem is that Idaho Power put
21 in their transmission lines from a few miles away. They
22 put in their towers and their transmission lines and now
23 they can't do a thing with that plot of ground, so that's
24 an expense that they need to pay for. It was also a
25 maj or management decision that was a very bad decision
CSB REPORTING
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59 MATTHEWSPublic
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1 and now they want the people to pay for that bad
2 management decision. I don't think that's fair.
3 Now, back in 1980, the Department of
4 Energy along with a few other departments put in a test
5 geothermal plant at Raft River in Idaho and afterwards in
6 1984 they produced a report that said that this was
7 extremely feasible throughout southern Idaho, all along
8 the Snake River Plain. They only dug their well, they
9 only put the wells in approximately one kilometer. It
10 wasn't quite hot enough for real good production, but it
11 was good enough for them to make their report.
12 Idaho Power got that report, done nothing.
13 20 years later, 2004, is when they wanted to go into the
14 coal and the cogeneration. Well, that's not geothermal.
15 2006 Idaho Power has a report that they wanted to by 2008
16 have 100 kilowatts of geothermal power on line. Well,
17 it's 2008. I don't see it. However, they are, they did
18 go into a contract to pay for 20 kilowatt-hours of power
19 from the Raft River proj ect which is slightly less than
20 it makes. They went into that contract with the Raft
21 Ri ver Electrical Company and so they are purchasing power
22 that they're not creating which means that we will have
23 to pay for that, and another thing about that Raft River,
24 it's U. S. Geological U. S. Geothermal Company. They're
25 the ones that headed up the proj ect to make ita private
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60 MATTHEWSPublic
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1 enterprise to go into the Raft River. They sunk the
2 wells down just a few more hundred feet, so they're a
3 li ttle past that one kilometer distance and they are
4 producing 20 kilowatt-hours, a little over 20, about 25
5 kilowatt-hours, extremely non-polluting.
6 There's only one moving part in their
7 binary plant and that's the generator itself. The
8 generator is the type that's made where there's a few
9 clasps, few bolts, pop it out, put a new one in if they
10 have to or just service it occasionally, very low
11 maintenance.
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Now, I was talking to Ormat which is a
company in Reno and they're a private company that
spearheads a lot of the drill heads and putting in the
15 plants. They did the final work at the Raft River, and I
16 got ahold of an engineer there, his name was Rick, nice
17 guy. I told him what do you think of the idea of having
18 geothermal in Idaho? He was laughing. After a little
19 while he stopped laughing and I asked him what's up? He
20 says Idaho has the third, is the third best state for
21 geothermal power after Hawaii and Alaska.
22 Idaho could have non-polluting, low
23 maintenance power plants spread throughout and it
24 wouldn't even bother the deer walking by them. They
25 wouldn't even have to have people around them most of the
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61 MATTHEWS
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1 time because they're tied by computer for monitoring, and
2 he says that they could probably produce more power than
3 the dams up there in Washington.
4 What would that do to our rates? I think
5 it would come down for the first time, so I'm saying that
6 because we are now scheduled for paying for mistakes, you
7 know, putting in the transmission lines, the towers and
8 everything, to these proj ects that suddenly Idaho Power
9 could not build on, I don't think that's right. I don't
10 think management should be rewarded for making bad
11 decisions, but more than that, Idaho Power Company could
12 take these same locations and discover that they'd only
13 have to go down a kilometer to two kilometers at the most
14 and put in a non-polluting geothermal location because of
15 their locations.
16 Now, that original report in 1984 from
17 Raft River, Idaho Power did nothing with it. California
18 did. They have over 40 plants on line right now and
19 another 60 planned for the next couple of years, but we
20 didn't. That's all I have right now. Oh, no, no, I do
21 have one more item.
22 COMMISSIONER REDFORD: Good.
23 THE WITNESS: Yes, one more. U. S.
24 Geothermal when they went to put in that plant and they
25 hired Ormat to do it and all that kind of stuff, a lot of
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62 MATTHEWS
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1 money went into it, however, they originally planned 10
2 megawatts, they're getting 25 out of it. In U.S. section
3 396000, U. S. Department of Energy, a geothermal resource
4 exploration proj ect has definition grants and now that
5 they are on line with their power, they get reimbursed 80
6 percent of the total cost of putting that plant in. The
7 federal government really wants to say they're doing
8 great things with energy. They have a terrible record,
9 but this money has been available for quite a long time
10 and it's still available and will continue to be
11 available and it's also totally in line with the PURPA
12 regulations here in Idaho, P-U-R-P-A, PURPA regulations,
13 and there's absolutely no reason that shareholders
14 couldn't put into these plants and get most of their
15 money reimbursed, 80 percent back for making the kind of
16 power we absolutely need. That's all I have
17 COMMISSIONER REDFORD: Thank you, sir.
18 THE WITNESS: Oh, by the way, wait a
19 minute, I almost forgot.
20 COMMISSIONER REDFORD: That's okay.
21 THE WITNESS: Here's a map of Idaho, only
22 it's in color. Anyone can go to the USGS site and look
23 up the aeromagnetic map of Idaho. Where the colors are
24 purple on this map means that the crust is extremely
25 thin. Instead of drilling down three to five kilometers
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63 MATTHEWS
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1 like they have to do in California, most of our wells
2 would only be one and two at the most in order to get the
3 binary plants up and running full capacity and everywhere
4 there's a purple spot on this map, which you'll find a
5 whole lot of them in southern Idaho, that is a location
6 where a plant can go in successfully and, compared to
7 most plants, cheaper.
8 COMMISSIONER REDFORD: Thank you, sir.
9 THE WITNESS: That's all I have.
10 COMMISSIONER REDFORD: Thank you for your
11 testimony.
12 THE WITNESS: Thank you.
13 COMMISSIONER REDFORD: You may step down.
14 May we keep that?
15 THE WITNESS: You may.
16 COMMISSIONER REDFORD: Oh, thank you.
17 (The witness left the stand.)
18 COMMISSIONER REDFORD: Are there any other
19 persons that would like to testify? It's not too late.
20 Well, hearing none, I have one other thing I'd like to
21 bring up and that is I'd like to read in the record that
22 notice of this public hearing was given on January 4,
23 2008, and so I'LL take notice that the required notice
24 was given.
25 I want to thank everyone for appearing and
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64 MATTHEWS
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1 your testimony will be considered by the Commission in
2 making any further determinations in this matter and so
3 that is all we need to do right now and this hearing will
4 stand adj ourned.
5 (The Hearing adjourned at 7: 25 p.m.)
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1 AUTHENTICATION
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4 This is to certify that the foregoing
5 proceedings held in the matter of the application of
6 Idaho Power Company for authority to increase its rates
7 and charges for electric service to electric customers in
8 the State of Idaho, commencing at 7:00 p.m., on Thursday,
9 February 7, 2008, at the Commission Hearing Room, 472
10 West Washington Street, Boise, Idaho, is a true and
11 correct transcript of said proceedings and the original
12 thereof for the file of the Commission.
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CONSTANCE S. BUCY
Certified Shorthand Reporter
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CSB REPORTING
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66 COLLOQUY