20090108Vol V Boise.pdf

ORIGINAL.BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO 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
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Idaho Public Utilties Commission
Office of the SecretaryRECEIVED
NO. IPC-E-08-10
JAN -8 2009
Boise, Idao
BEFORE
COMMISSIONER MARSHA H. SMITH (Presiding)
COMMISSIONER MACK A. REDFORD
COMMISSIONER JIM D. KEMPTON.
PLACE:Commission Hearing Room
472 West Washington Street
Boise, Idaho
DATE:December 16, 2008
VOLUME V - Pages 656 - 715
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CSB REPORTING
Constance S. Bucy, CSR No. 187
23876 Applewood Way * Wilder, Idaho 83676
[phone] * [phone]
Email csb(Weritagewifi.com
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1 APPEARANCES
2 For the Staff:
3
4
5 For Idaho Power Company:
6
7
8
For Industrial Customers
of Idaho Power:
(Of Record)
9
For Idaho Irrigation
Pumpers Association:
For The United States
Department of Energy:
(Of Record)
For Micron Technology,
Inc. :
(Of Record)
For The Kroger Company:
(Of Record)
22 (Of Record)
23
24
Donald Howell, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83720-0074
Lisa D. Nordstrom, Esq.
Idaho Power Company
Post Office Box 70
Boise, Idaho 83707-0070
RICHARDSON & 0' LEARY
by Peter J. Richardson, Esq.
Post Office Box 7218
Boise, Idaho 83702
RACINE, OLSEN, NYE, BUDGE
& BAILEY
by Eric L. Olsen, Esq.
Post Office Box 1391
Pocatello, Idaho 83204-1391
Arthur Perry Bruder, Esq.
Assistant General Counsel
U. S. Department of Energy
1000 Independence Ave., SW
Washington, DC 20585
GIVENS PURSLEY LLP
by Conley E. Ward, Esq.
Post Office Box 2720
Boise, Idaho 83701-2720
BOEHM, KURTZ & LOWRY
by Kurt J. Boehm, Esq.
36 E. Seventh Street
Suite 1510
Cincinnati, Ohio 45202-and-
FISHER PUSCH & ALDERMAN LLPby John R. Hamond, Jr., Esq.
Post Office Box 1308
Boise, Idaho 83701
CSB REPORTING
[phone]
APPEARANCES
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11
12
13
14
15
16
17
18
19
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21
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1 A P PEA RAN C E S (Continued)
2
3 For the Community Action
Partnership of Idaho:
(Of Record)4
5 For Snake River Alliance:
6
7
8
9
25
Brad M. Purdy, Esq.
Attorney at Law
2019 North 17th Street
Boise, Idaho 83702
Mr. Ken Miller
5400 West Franklin
Boise, Idaho 83705
CSB REPORTING.
[phone]
APPEARANCES
1 I N D E X.2
3 WITNESS EXAMINATION BY PAGE
4 Retta Green Statement 658
( Public)Mr.Howell (Cross)660
5 Commissioner Smith 661
6 Kathryn McNary Statement 662
(Public)Mr.Howell (Cross)664
7 Commissioner Kempton 664
8 Bob VanArnem Statement 666
( Public)Commissioner Kempton 669
9
Teri Bath Statement 672
10 ( Public)
11 Tim Corder Statement 675
(Public)
12
John Weber Statement 680.13 ( Public)Commissioner Kempton 685
14 Dick Lagerstrom Statement 687
(Public)
15
Dave Bergh Statement 689
16 (Public)Mr.Howell (Cross)695
17 Ron Matthews Statement 696
( Public)
18
Sid Freeman Statement 701
19 (Public)
20 Gary Richardson Statement 705
(Public)
21
Bill Goodnight Statement 708
22 (Public)
23 Quey Johns Statement 711
(Public)
24.25
CSB REPORTING INDEX
(208 )890-5198
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1 BOISE, IDAHO, TUESDAY, DECEMBER 16, 2008, 7:00 P. M.
2
3
4 COMMISSIONER SMITH: Good evening, ladies
5 and gentlemen. This is the time and place set for a
6 hearing to take public comment in Idaho Public Utilities
7 Commission Case No. IPC-E-08-10, further identified as in
8 the matter of the application of Idaho Power Company for
9 authori ty to increase its rates and charges for electric
10 service to its customers in the State of Idaho. My name
11 is Marsha Smith. I'm one of the Commissioners and I will
12 Chair tonight's hearing. On my left is Mack Redford who
13 is the president of the Commission and on my right is Jim
14 Kempton. The three of us are the Public Utili ties
15 Commission and we are the people who will be making the
16 decision in this case.
17 We want to welcome you tonight. We're
18 interested in hearing your opinions. The decisions of
19 the Commission must be made on a record and, therefore,
20 tonight we have a court reporter who will take down
21 verbatim all of your testimony so that it may be part of
22 our record and part of our decision making process. For
23 that reason, it is not appropriate for more than one
24 person to talk at a time or for anyone to callout from
25 the audience because that cannot be properly recorded.
CSB REPORTING
[phone]
656 COLLOQUY
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1 When I have a list of people who are
2 interested in testifying, we i II ask you to come forward.
3 Commissioner Redford will ask you to raise your right
4 hand and promise to tell the truth and then our Staff
5 attorney Don Howell will ask you a few questions which
6 will consist of your name and your mailing address to get
7 you on the record and get you started and then you can
8 make your statement, after which there are some people
9 here who will be able to ask you questions, which include
10 the Commissioners and the Company's attorney and the
11 Staff attorney, so before we get started, we i II take the
12 appearances of the parties beginning with Idaho Power.
13 MS. NORDSTROM: Thank you,
14 Madam Chairwoman. My name is Lisa Nordstrom and I 1m
15 representing Idaho Power Company.
16 COMMISSIONER SMITH: Okay, and Mr. Howell.
17 MR. HOWELL: And for the Commission Staff,
18 my name is Don Howell. I'm a Deputy Attorney General
19 representing the Commission Staff.
20 COMMISSIONER SMITH: And we have, I think,
21 about seven other parties to this proceeding, but I don't
22 see representatives of them in the room, so the record
23 will reflect that they are not appearing tonight. With
24 that, we III -- oh, there IS Mr. Miller who is representing
25 the Snake River Alliance; did I get that right?
CSB REPORTING
[phone]
657 COLLOQUY
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1
2
MR. MILLER: Yes, you did, ma' am.
COMMISSIONER SMITH: Thank you. We'll
3 begin with the first person who has signed up to testify
4 which would be Retta Green, and Ken, you're welcome to
5 si t here at the front table if you would like.
6
7
MR. MILLER: That's okay.
8 RETTA GREEN,
9 appearing as a public , witness, having been duly sworn,
10 was examined and testified as follows:
11
12
13
14 BY MR. HOWELL:
EXAMINATION
Good evening, ma' am. Could you state your
16 name and spell your last name for the record, please?
20
15 Q
17 A
18 Q
19 address?
A
21 83606.
22
23
24
25
Q
A
Q
your statement?
Retta Green, G-r-e-e-n.
And ma' am, can you give us a mailing
Post Office Box 572, Caldwell, Idaho,
And are you an Idaho Power customer?
Yes, I am.
And could you please give the Commission
CSB REPORTING
[phone]
658 GREEN
Public
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1 Yes. I am on a fixed income of $670 aA
2 month. This is my social security disability. My rent,
3 $550 a month. I have $120 left a month to pay my water
4 bill, which is $ 63.00. My power bill usually runs
5 approximately $58.00 through the summer and fall, but
6 much higher in the winter. My telephone runs about
7 $38.00 a month and my cell phone is 75 a month, so I've
8 gi ven a lot of thought on giving up lots of things. I
9 don't have money for gasoline for my car and there's no
10 money for car insurance. There's not even money for food
11 and I'm here to testify for the people on social
12 securi ty, SSI disability, Health and Welfare or whatever
13 their fixed income is because they do not have enough to
14 pay rent, utili ties and everything else that goes on just
15 in a normal life just to get by on. They don't have
16 anything for anything extra.
17 I don't feel that the increase that
18 they're asking for is necessarily needed. You look
19 around and look at all of the houses that's being put in,
20 there's a great cost to hook up for power and there's not
21 that much expense that the power is being put out to.
22 Also, the thing of it is, I support the three tier. I
23 think it's a good way to help the lower income by raising
24 the amount of the kilowatt usage, I support that, but
25 there is so many of us out there that are struggling,
CSB REPORTING
[phone]
659 GREEN
Public
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1 especially the people that are on social security, SSI
2 disabili ty and that that can't even pay their bills.
3 I have to take and, as I call it, stair
4 step my bills. One month I'll pay a power bill, the next
5 month pay on to the phone bill and every month I have to
6 pay the water bill or it's shut off. They don't care,
7 but as far as everything else, people don't understand
8 that I don't have the money to pay them all.
9 COMMISSIONER SMITH: Does that conclude
10 your statement?
11 THE WITNESS: Oh, I get $14.00 a month
12 food stamps.
13 COMMISSIONER SMITH: Is that it?
14 THE WITNESS: Thank you.
15 COMMISSIONER SMITH: Let's see if there
16 are any questions. From the Company?
17 MS. NORDSTROM: None from the Company.
18 COMMISSIONER SMITH: Staff?
19
20 CROSS-EXAMINATION
21
22 BY MR. HOWELL:
23 Mrs. Green, you know about the low incomeQ
24 energy assistance program. Have you applied for
25 assistance this year already?
CSB REPORTING
[phone]
660 GREEN (X)
Public
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1 A No, I haven't. My plans are to do that
2 Friday and it was put out on the news tonight that LIHEAP
3 is out of money and so is CAPAI. There is no more money
4 for people that are getting energy assistance.
5 MR. HOWELL: Thank you for your statement.
6 THE WITNESS: Thank you.
7 COMMISSIONER SMITH: Questions? Do you
8 have questions?
9 COMMISSIONER REDFORD:No.
10
11 EXAMINATION
12
13 BY COMMISSIONER SMITH:
14 I just had one. You stated your electricQ
15 usage in the winter is higher than in the summer?
16 A Yes, because it's electric heat.
17 And yet, you support the tiered proposal,Q
18 so I'm just curious if you are fearful that because you
19 have electric- heat that might push you over into the
20 higher blocks in the winter.
21
22
A Yes.
COMMISSIONER SMITH: Thank you very much
23 for coming tonight. We appreciate your testimony.
24 THE WITNESS: Thank you.
25 (The witness left the stand.)
CSB REPORTING
[phone]
661 GREEN (Com)
Public
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1 COMMISSIONER SMITH: Kathryn McNary.
2
3 KATHRYN NcNARY,
4 appearing as a public witness, having been duly sworn,
5 was examined and testified as follows:
6
7 EXAMINATION
8
9 BY MR. HOWELL:
10 Q Good evening. Could you state your name
11 and spell your last for the record, please?
12 A My name is Kathryn McNary, M-c-N-a-r-y.
13 Q And Kathryn, can you give us a mailing
14 address, please?
15 A 1511 Missoula Way, Caldwell, Idaho.
16 Q And you're an Idaho Power customer?
17 A Yes, I am.
18 Q Please give the Commission your statement.
19 A Okay, my statement is that if this rate
20 increase goes through, I may not be able to pay my power
21 bill. The rate increase went through the last time and
22 it increased my bill $20.00. I live on a fixed income.
23 I raise three kids on that income, and I'm on disability
24 social security and that $20.00 was really hurtful to my
25 living expenses. We had to cut out some necessary
CSB REPORTING
[phone]
662 McNARY
Public
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1 things, like food and gas for the vehicles and going to
2 the doctor and things like that.
3 If this rate increase goes through, I'm
4 afraid I won't be able to even come up with another
5 $20.00. Now, I do support the three-tiered rating,
6 al though we would like to see the lowest income be higher
7 than what is being stated by Idaho Power because of the
8 fact that I actually at this point go into the highest
9 tier because of the house I' m living in and all the power
10 that is necessary to run that household. We have a
11 four-bedroom house and we don't have a great living
12 space, but it does take a lot of power to run that power,
13 that house.
14 Also, weatherization and LIHEAP fundings,
15 I do qualify for energy assistance. I have gotten my
16 energy assistance, although that goes directly to my gas
17 bill because I have Intermountain Gas, but everything
18 else comes off of power and that if it was to increase,
19 then that would put me back into a lower tier and maybe
20 enable me to help pay my power bill as needed, as
21 necessary.
22 COMMISSIONER SMITH: Does that conclude
23 your statement?
24 THE WITNESS: Yes, it is.
25 COMMISSIONER SMITH: Are there any
CSB REPORTING
[phone]
663 McNARY
Public
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1 questions?
CROSS-EXAMINATION
Ma' am, can you tell us how much your
7 LIHEAP support was this year?
2
3
4
5 BY MR. HOWELL:
6 Q
It was $195 which pays for part of one
9 month of power, of gas.
10
8 A
And it goes to the gas company because you
11 have a gas heater?
Q
12 A Yes, that's right.
MR. HOWELL: Thank you. No further
COMMISSIONER SMITH: Questions?
16 Commissioner Kempton.
13
14 questions.
EXAMINATION
20 BY COMMISSIONER KEMPTON:
15
17
18
19
21 Q You say that your house right now is past
22 the Idaho Power lower tier rate which I think is about
23 $300; is that right?
24 A That's correct. My power bill a month is
25 about 12,000 kilowatts an hour or kilowatts a pay period,
CSB REPORTING
[phone]
664 McNARY (Com)
Public
.1 sorry.
2 Per pay period, about 12,000?Q
3 A Yes.
4 COMMISSIONER KEMPTON: Actually, you
5 anticipated my question. Thank you.
6 COMMISSIONER SMITH: Do you have
7 questions?
8 COMMISSIONER REDFORD: No.
9 COMMISSIONER SMITH: Nor I. Thank you,
10 Ms. McNary. We appreciate your attendance.
11
12.13
. 25
THE WITNESS: Thank you.
(The witness left the stand.)
COMMISSIONER SMITH: And the record can
14 reflect that Mr. Eric Olsen on behalf of the Idaho
15 Irrigation Pumpers Association is here.
16 The next person on our list is Bob
1 7 VarArnem.
18 MR. VANARNEM: You learned reading by the
19 phonics method I can tell. Most folks have trouble
20 pronouncing that name.
21 COMMISSIONER SMITH: However I learned,
22 I'm grateful.
23
24
CSB REPORTING.
[phone]
665 McNARY (Com)Public
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1 BOB VANARNEM,
2 appearing as a public witness, having been duly sworn,
3 was examined and testified as follows:
4
5 EXAMINATION
6
7 BY MR. HOWELL:
8 Sir, could you state your name and spellQ
9 your last for the record, please?
10 My last name for the record?A
11 Yes, sir.Q
12 A It's Bob VanArnem. It i S V-a-n-A-r-n-e-m.
13 I live at 3049 South Whitepost Way in Eagle.
14 Q And could you give the Commission your
15 statement?
16 As of June 1st, 2008, we paid 15.2 percentA
17 more for electric power than we did for the same period
18 in 2007. Only the power adjustment cost and two summer
19 energy charges for comparison purposes were included in
20 the calculation with the kilowatt usage the same for both
21 periods. This, of course, does not include the
22 annualized increase in the cost of goods and services to
23 a household as a result of an increase in electric power
24 rates. The percent increase in cost of living related to
25 electric power usage, therefore, is greater than this
CSB REPORTING
[phone]
666 VANARNEMPublic
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1 15.2 percent and any proposed rate increase the Power
2 Company may suggest.
3 This year we have incurred two rate
4 increases, the first March 1st and the second June 1st.
5 March 1st was five percent, June 1st was 12 percent,
6 approximately.IDACORP i S rate of return for the 12
7 months ended September 30th is eight percent. Its
8 allowed rate of return is 10.2 with an imputed rate of
9 10.6, whatever that term means. Who among us would not
10 be thrilled with that kind of rate of return for the same
11 12-month period? IDACORP' s third quarter earnings
12 conference, which was a conference call held on November
13 6th, included the following information: Net income was
14 $ 91 million, an increase of 26.3 percent compared with
15 $72 million net income for the same period of 2007.
16 The president and CEO stated that "we are
17 focused on the dual goals of obtaining a fair return for
18 investors and providing reliably, reasonably priced
19 energy in the current demanding environment." Perhaps it
20 is telling that customers did not come first in his
21 statement of goals. He also said that "our service area
22 experienced near normal temperatures and better water
23 conditions this year," which would be conducive to
24 holding power rates steady.
25 The chief financial officer in the same
CSB REPORTING
[phone]
667 VANARNEM
Public
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1 conference call stated the following:"During the
2 quarter, general business revenues increased $34.8
3 million, half an increase in the power cost adj ustment
4 rates. " He also commented about the increase in earnings
5 being attributed to "the benefits of increases in
6 customer prices." In addition, he stated that "Idaho
7 Power Company has collected approximately $44 million
8 more due to the PCA in 2008 than in 2007," and he
9 commented "cash used for investing acti vi ties decreased
10 by $13 million in 2008 and Idaho Power's expenditures for
11 utility plant were $27 million less than year to date
12 September 2007." Quoting again and emphasizing, "the
13 decline in spending reflects the continued reduction in
14 new customer connections and the deferral of certain
15 capital expenditures," so I'd like Idaho Power to explain
16 the inconsistency between this statement and a statement
17 by the Idaho Power vice president for regulatory affairs
18 quoted on Idaho Statesman. com, an article by Rocky Barber
19 dated today, December 16th, 2008, to quote the vice
20 president, "Two forces are driving this increase; i.e.,
21 the 9.9 percent proposed increase, growth in the number
22 of customers and a growing demand for electricity."
23 For the 12 months ending November 2008,
24 the Consumer Price Index for energy is down 13.3 percent,
25 yet our rates for electric power have gone up and if the
CSB REPORTING
[phone]
668 VANARNEM
Public
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1 proposed rate increase is approved will go up again. I
2 do not believe that Idaho Power's proposed rate increase
3 is justified at this time. If approved, our rates could
4 increase in 2009 as much as 21.5 percent over 2007.
5 Depending on the facts, either demand/growth is lower
6 and, therefore, the rates ought to go down or,
7 conversely, demand/growth is up and Idaho Power benefits
8 from increased revenue; i.e., sales, offsetting the need
9 to raise rates. Many of us have had to tighten our belts
10 and I believe that Idaho Power must do the same at this
11 time.
12 COMMISSIONER SMITH: Thank you. Let i s see
13 if there are any questions.
14 MS. NORDSTROM: Nothing from the
15 Company.
16 MR. HOWELL: No questions.
17 COMMISSIONER SMITH: I keep forgetting to
18 look at you guys. Do you have any questions?
19 COMMISSIONER KEMPTON: A quick question.
20 COMMISSIONER SMITH: Commissioner Kempton.
21
22 EXAMINATION
23
24 BY COMMISSIONER KEMPTON:
25 Q . Mr. VanArnem, in your presentation, one
CSB REPORTING
[phone]
669 VANARNEM (Com)
Public
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1 thing is quite obvious and that is your attention to
2 detail.I mean, you have kept good records. You have a
3 sense of the economy. You have a sense of what Idaho
4 Power is talking about and I'm kind of saying this to
5 everybody here as well as to you, but have you accessed
6 the Commission's website to look into some of the
7 questions that you have that you i re presenting to us
8 tonight?
9 A No, I haven't.
10 Q Well --
11 A May I ask you a question?
12 Q Yes, absolutely.
13 A How would that enlighten me because my
14 time is somewhat limited and the hours spent on this
15 alone was expensive, so how would that be helpful?
16 Q Education is always something that helps
17 everybody and in your case, if you were to look at some
18 of these, you would understand what they meant when they
19 were talking about the PCA, the power cost adjustment,
20 for example, and that's where they run the rate case and
21 then on top of that they have to spend more money even
22 than the rate case indicated because maybe the water year
23 is lower or something like that and because they have to
24 buy power from exterior sources, from outside sources,
25 market power, those extra costs are added on to what they
CSB REPORTING
[phone]
670 VANARNEM (Com)Public
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1 typically have had in their previous rate case and I
2 don't want to go into any more than that because that's
3 not the purpose of the hearing.
4
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All right, and the bottom line -- oh,A
5 excuse me.
6 Q The bottom line, Mr. VanArnem, is that we
7 are hear to listen to your concerns. We take those very
8 seriously. We don't ask that you go back and try and
9 learn about some of these issues, but it helps you in
10 trying when you make a presentation to show that you've
11 identified the significant factors versus factors that
12 are almost irrelevant in terms of whether we have a
13 choice or not to go forward in approving those items, and
14 you can find those, like I said, everybody's time is
15 limi ted, but this is a very serious area for everybody
16 that has power rates and I only suggest that perhaps you
17 go look at those.
18 A May I comment?
19 Q Sure.
20 A Okay, well, coming from a business
21 background and raising prices, I could not raise prices
22 20 percent to compensate for my cost of doing business in
23 a competitive environment without running the risk of
24 losing business, and I realize we're all captive to a
25 utility company, but I just felt looking back at the rate
CSB REPORTING
[phone]
VANARNEM (Com)
Public
671
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1 increase history over the past 12 months when the economy
2 has slowed, it just seemed to me inappropriate to ask at
3 this time for a 9.9 percent increase, and the
4 complexities you're talking about, I'm a citizen,
5 difficult to understand. I looked at it from a pretty
6 straightforward point of view and that's how I came up
7 with what I came up with.
8 COMMISSIONER KEMPTON: And that's what
9 we're here to listen to.
10 THE WITNESS: Okay.
11 COMMISSIONER SMITH: Thank you very much
12 for your testimony.
13 THE WITNESS: Thank you.
14 (The witness left the stand.)
15 COMMISSIONER SMITH: Teri Bath.
16
17 TERI BATH,
18 appearing as a public witness, having been duly sworn,
19 was examined and testified as follows:
20
21 EXAMINATION
22
23 BY MR. HOWELL:
24 Q Good evening. Could you state your name
25 and spell your last name for the record, please?
CSB REPORTING
[phone]
672 BATH
Public
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1 Teri Bath, B-a-t-h.A
2 Ms. Bath, could you give us your mailingQ
3 address, please?
4 597 East State Street, Eagle, Idaho,A
5 83616.
6 And please give the Commission yourQ
7 statement.
8 A I'm here because I belong to several
9 organizations. I am with the Chamber of Commerce in
10 Eagle, Idaho. I belong to the Idaho Economic Development
11 Association and I belong to Boise Valley Economic
12 Partnership and in those organizations, we've had several
13 discussions about infrastructure and in my opinion,
14 infrastructure applies to power as well as
15 transportation, as well as gas, water, all of these
16 amenities that we need to function as a community and as
17 a country, and I think since the great depression we have
18 not made a great investment in our infrastructure needs
19 for a very long time and if we want to produce jobs in
20 the future, we've got to start investing in our
21 infrastructure.
22 We've had businesses come to the State of
23 Idaho and especially to the Treasure Valley to look at
24 relocating in our community and because we don't have
25 enough power to serve some of these companies, they don't
CSB REPORTING
[phone]
673 BATH
Public
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1 come here and they can produce some quality jobs if we
2 can provide them the power, the fiber, all the
3 infrastructure we need. We have huge transportation
4 issues, but that's what we're not here to talk about, but
5 power is a transportation facility and so for economic
6 development purposes for the state, I think it's
7 important that we invest in our infrastructure and if we
8 don't invest in it and we have to buy more power, the
9 concerns of the people that are sitting in the audience
10 are going to be there because we have to buy more power
11 from other sources.
12 I'd like to encourage al ternati ve power
13 investigation, of course, for the future, but I really
14 feel like for an economic development issue, we need to
15 invest in our infrastructure and for our future needs,
16 that is going to be more of the technology industry, they
17 have huge power needs and that's what is going to produce
18 our jobs for our citizens.
19 COMMISSIONER SMITH: Thank you. Are there
20 any questions?
21 MR. HOWELL: No questions.
22 MS. NORDSTROM: No.
23 COMMISSIONER SMITH: All right, thank you
24 very much for your time.
25 THE WITNESS: Thank you.
CSB REPORTING
[phone]
674 BATH
Public
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1 COMMISSIONER REDFORD:Thank you.
2 (The witness left the stand.)
3 COMMISSIONER SMITH: Tim Corder.
4
5 TIM CORDER,
6 appearing as a public witness, having been duly sworn,
7 was examined and testified as follows:
8
9 EXAMINATION
10
11 BY MR. HOWELL~
12 Q Could you state your full name and state
13 your last name for the record?
14 A Certainly. I'm Tim Corder, C-o-r-d-e-r.
15 And Mr. Corder, could we have a mailingQ
16 address, please?
17 A 357 S.E. Corder Drive in Mountain Home,
18 Idaho.
19 Q Not many people can say they're named
20 after their own street. Please give the Commission your
21 statement.
22 Thank you. Thank you, Commissioners, forA
23 taking this time to hear all of these concerns. I'm here
24 as a consumer of Idaho Power's product both in the
25 residential area and in the commercial, but also as a
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1 representati ve of District 22, which is Elmore and Boise
2 counties in the Senate, and in addition to that, I
3 represent now under a new capacity, I'm as chair of the
4 Senate agricultural committee, I feel compelled to
5 represent all of agriculture in this concern and in this
6 issue, and I have no technical data. I haven't gone to
7 your website. I haven't reviewed the tiers.
8 What I look at are the things that are
9 obvious and if it were our committee reviewing this,
10 these were the things that stuck out at me that said
11 there's something really wrong in the methodology of how
12 this is taking place and before I say any more about
13
14
that, let me also say that none of us should ever
apologize for a business being profitable, none of us
15 should ever do that, because that's what keeps Idaho
16 viable, that's what keeps us strong, that's what keeps
17 our heart whole and that includes agriculture, that
18 includes all the commercial businesses and even includes
19 Idaho Power.
20 We don't want to apologize. We want them
21 to be heal thy. We want them to be able to survive and
22 grow and continue to hire Idahoans and keep our rural
23 areas as well as our urban areas viable, but the seeming
24 inconsistencies are these, that we have a difference, I'm
25 referring now to the page, the handout that was given to
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1 us as we came in, the third paragraph from the bottom
2 where it speaks of the difference between residential
3 customer is at 6.3 percent and I heard very clearly those
4 on fixed income address that concern, but industrial and
5 irrigation customers are going up 15 percent and all of
6 this as a result of increased usage or at least increased
7 demand for construction in the last few years.
8 Well, when I read that, I was thinking of
9 the 26,000 acres that was idled at Sailor Creek in Bell
10 Rapids just two years ago. I was thinking of the
11 thousands of acres that have been put in the program in
12 the East Snake River Plain and I was thinking of the
13 hundreds, if not thousands, of acres that have been idled
14 in Elmore County and Ada County and Owyhee County in just
15 the last couple of years that were agriculture acres, so
16 if agriculture is not growing and it certainly is not
17 because there are no more acres going under cul ti vation,
18 if it's not growing, then it would seem to me to be
19 consistent that the cause of growth, the cause of that
20 increase in construction certainly wasn't for
21 agricul ture. It must have been borne by the other two
22 enti ties, residential and commercial, and then to address
23 a 15 percent increase for the industrial and irrigation
24 side and I understand, there's an average in here, but as
25 your sheet indicates, that's what they're asking for,
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1 that would seem, well, I should not say use the word
2 arbi trary because, as I said, I haven't researched it
3 enough, but it just seems out of place.
4 Why not address the change if there is to
5 be an increase, put the change where the cost has been.
6 Why not allocate it directly to those areas and if
7 residential has been the cause, then I understand that
8 will be difficult for many people, but it will also be
9 difficult for agriculture, it will be difficult for the
10 commercial side. It's going to hurt everyone, so there
11 may be some validity to the idea that eight percent is
12 enough as the gentleman -- if that's accurate. Whatever
13 Idaho Power posted as its profits for the year, maybe
14 that is enough. I don't know, but I don't think that's
15 our job here to say eight percent is enough profit. If
16 it was, I suspect most here that are in agriculture would
17 be delighted if we were to set and say that you get to
18 make eight percent every year no matter what. They'd be
19 delighted and I suspect many of our commercial customers
20 would as well.
21 I don't, I certainly don't, envy you your
22 task. There are a lot of difficult decisions here to be
23 made, but I would just say that I urge you to consider
24 the equity, that I urge you to consider how these costs,
25 where these costs come from and allocate them accordingly
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1 and wherever that falls and then if there must be an
2 average, then we will have to find another way to deal
3 wi th that. Thank you very much.
4 COMMISSIONER REDFORD: Thank you.
5 COMMISSIONER SMITH: Thank you, Senator
6 Corder, let's see if there are questions.
7 MR. HOWELL: No questions.
8 MS. NORDSTROM: No questions.
9 COMMISSIONER SMITH: Commissioner
10 Kempton.
11 COMMISSIONER KEMPTON: Madam Chairman, I'd
12 just like to thank the Senator for his service and let
13 him know that he's representing an area where I used to
14 ride many miles when I was growing up.
15 THE WITNESS: Thank you.
16 COMMISSIONER KEMPTON: So thank you for
17 representing agriculture.
18 THE WITNESS: Come ride with us again.
19 (The witness left the stand.)
COMMISSIONER SMITH: John Weber or
21 Weber.
22
23
24
25
MR. WEBER: John Weber.
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1 JOHN WEBER,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. HOWELL:
8 Q Sir, could you state your full name and
9 spell your last name for the record, please?
10 A John Weber, W-e-b-e-r.
11 Q And Mr. Weber, do you have a mailing
12 address?
13 A 9535 West Cory Lane, Boise, Idaho 83704.
14 Q Thank you, and do you have a statement
15 you'd like to give the Commission?
16 A Yes, I do. First off, I'd like to say
17 that I don't have any financial interest in Idaho Power.
18 I'm not a stockholder. My interest is in Idaho and
19 what's best for Idaho long term. I do have an interest
20 as being a residential customer of Idaho Power and a
21 commercial customer. I manage the largest chain of body
22 shops in the State of Idaho. I'm in favor of a seven to
23 ten percent annual base rate increase, and by consistent
24 and gradual increases, businesses and residential
25 customers may. be able to better plan for their future
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1 electrici ty budget. It really helps out a business if we
2 know we're going to have consistent annual rate increases
3 rather than, like, a 30 percent one year and then a
4 decrease the next year.
5 I think Idaho Power is doing a lot of good
6 things currently to becoming more efficient which will
7 keep future rates among the lowest in the country. One
8 of those things is installing advanced metering devices,
9 and I believe that we should -- once the advanced
10 metering devices are installed, if approved, that we
11 should start time-based metering as soon as possible, and
12 one of the reasons I think that is because right now I
13 don't think Idaho Power is operating very efficiently
14 from a capital standpoint, and my reasoning is in my
15 business, I try to keep all my people busy all day long.
16 I don't want them standing around and if I'm paying them,
17 I want to keep them busy.
18 Well, for instance, sometimes I have a lot
19 of demand to write estimates and I've got customers and
20 it wouldn't make much business sense to me to hire
21 another estimator for the entire year to write estimates
22 those 15 or 30 days that I need somebody to write
23 estimates and that's very similar to Idaho Power.
24 They've got these peaking plants, these natural gas
25 peaking plants. They have got all this capital invested
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1 in these plants and they typically only use them 15 to 30
2 days a year and they sit idle the rest of the year, so I
3 believe that we must give Idaho Power the tools it needs
4 to be able to be more efficient as a business, and one of
5 those tools is demand side management. Instead of having
6 this capital resource sit there all the time just in case
7 we need to fire it up for a winter peak that they can do
8 what they're doing with AC credits for residential, I
9 think they could expand that for commercial and
10 industrial and other kinds of ways to use the grid
11 smarter, so instead of having these big capital resources
12 which cost all the ratepayers money, they could use
13 demand side management.
14 They could besides AC cool credits maybe
15 go into, like, hot water heating, be able to cycle
16 everybody's hot water heaters during peak times in the
17 summer. It's the same thing, to shave that peak off so
18 we don't have no build more infrastructure and I do
19 believe we can have increasing rates and lower power
20 bills and one of the things is by using the advanced
21 meters and the other thing is the tiered rates. In
22 reading the PUC Staff comments about affordabili ty that
23 is on the PUC. website, I agree wholeheartedly with the
24 Staff's recommendation for tier rates.
25 Currently Idaho Power's summer tiers start
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1 at 300. I believe they should add the second tier, which
2 would actually be the third tier, at 1,000 kilowatt-hours
3 and keep the rates low for the lower tiers, but in that
4 upper last tier to kind of crank the rates up a little
5 bi t more to encourage conservation. The last time that I
6 testified in front of this committee, and I think
7 Ms. Smith probably remembers, she said I was the first
8 person to say it would be good to have a rate increase,
9 and this was three years ago, and one of the
10 Commissioners asked what my electric bill was in the
11 winter and it was $84.00. I use electricity to heat my
12 house and this winter I believe my top electric bill will
13 be less than $40.00 because I'm becoming more efficient
14 wi th the way I use power.
15 I used the keep the heat at 70 degrees.
16 Now I keep it' at 59 degrees, so there's a lot of things I
17 think we can do and the more the PUC and Idaho Power can
18 help us be more efficient and I think the tiers are
19 wonderful. The time-based metering would be really a
20 great incentive for people in the summertime because
21 let's say we have $ .15 a kilowatt-hour for peak power and
22 $.05 for off peak at night, well, people can do their
23 laundry at night, use their dryer at night, use your
24 dishwasher at. night, put off those tasks to keep the
25 power cheaper in the future.
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1 I also would like to thank the Staff and
2 the Commission for the good job they're doing with the
3 decoupling of Idaho Power to allow them to be able to
4 make a profit by selling less electricity. I mean, I
5 think that's wonderful what you all are doing in that
6 regard, and the last thing I have is for the low income
7 and fixed income people, I think it would be nice to
8 have, like, more weatherizations and retrofits done, that
9 the utility can do that to make those houses more
10 efficient, educate the people how to use their energy
11 more efficiently and I see that as a way of helping the
12 lower income and the fixed income people, just make their
13 buildings and everything more efficient.
14 I know Idaho Power has a program for,
15 like, manufactured homes to do that and if they could
16 expand that to rental apartments and to houses. I
17 believe they have a pilot proj ect already that I read on
18 the PUC website and they're doing some of that right
19 now.
20 COMMISSIONER SMITH: Let's see if there
21 are any questions.
22 MR. HOWELL: No questions.
23 MS. NORDSTROM: No.
COMMISSIONER SMITH: Commission Kempton.
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1 EXAMINATION
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3 BY COMMISSIONER KEMPTON:
4 Q Mr. Weber, would you explain why you think
5 the first-tiered rates should be at 1,000 kW and then the
6 second one at 2,000 kW?
7 A Well, actually I agree with Idaho Power's
8 current. They have in the summer at 300 kilowatt-hours,
9 you go into the second tier. I believe we should have
10 one additional tier at 1,000 and I would keep the zero to
11 300 kilowatt-hours very reasonably priced and then bump
12 it a little bit from 300 to 1,000 and then the 1,000 or
13 more I would really sock it to them to encourage
14 conservation and I mean, that's just kind of layman's
15 terms, but I would really hit them on that over 1,000
16 kilowatt-hours. I know a lot of people personally that
17 in the summertime, they're competing against each other
18 to stay under that 300 kilowatt-hour range so they stay
19 in the cheaper rate and I think that's great to encourage
20 competition between people to see who can have the lowest
21 power bill.
22 Q In respect to that 300 break and then the
23 1,000 break, do you think that it would be more
24 advantageous for low income customers to be in a full
25 range of 1,000 instead of making the break at 300?
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1 A It's possible. I think if there were a
2 program set up to weatherize the lower income and fixed
3 income's housing, I think they could get themselves under
4 the 300 kilowatt. I mean, it might entail a lot of,
5 like, fixing ducts or weatherization of the home,
6 education, giving them low flow showerheads so they use
7 less hot water which in turn uses less electricity to
8 heat that hot water, compact fluorescent bulbs and just a
9 lot of education, too, because I've learned a lot over
10 the years and like I said before, I'm halfing my electric
11 bill in the winter in the last two years and I believe
12 other people can do that as well. There are some
13 situations that people do need to use more air
14 conditioning and heat because of health and disability
15 problems.
16 COMMISSIONER KEMPTON: Thank you.
17 COMMISSIONER SMITH: Thank you very much
18 for coming tonight. We appreciate it.
19 THE WITNESS: You're welcome.
20 (The witness left the stand.)
21 COMMISSIONER SMITH: Dick Lagerstrom.
22
23
24
25
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1 DICK LAGERSTROM,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. HOWELL:
8 Q Sir, could you state your name and spell
9 your last name for the record, please?
10 A My name is Dick Lagerstrom,
11 L-a-g-e-r-s-t-r-o-m.
12 Q And do you have a mailing address, sir?
13 A 1262 West Beacon Light Road, Eagle.
14 Q And please give the Commission your
15 statement.
16 A Thank you, sir. I'm both an irrigation
17 water user as well as a residential water user. I agree
18 that Idaho Power certainly needs a sufficient operating
19 base so that they can support the electricity needs of
20 our communi ties and that we have an ability to grow. My
21 question of the Commissioners has to do with what impact
22 fees do new commercial and residential developers pay as
23 they develop their properties so that there's not an
24 inordinate burden upon the rest of us to pay for
25 growth.
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1 COMMISSIONER SMITH: Well, the setup of
2 our proceeding is to take your comments and it's not
3 really to have a back and forth discussion between you
4 and us, so that's an interesting question. I think the
5 Company has representatives here and so does the Staff
6 who can tell you what they charge developers for their
7 fees to connect to the system and the amount of new
8 facili ties that must be contributed to the Company for
9 those purposes, so we're not going to answer your
10 question, but there are people here in the room who
11 can.
12 THE WITNESS: Would you please put me on
13 your mailing list, because I think all of the public
14 services that we need probably deserve better funding
15 than we're getting now. Looking at the infrastructure
16 needs that we have, growth is not paying for itself.
17 COMMISSIONER SMITH: And that's been true
18 and the Commission has an open case right now where Idaho
19 Power is requesting permission to alter the way that it
20 collects money and actually to stop giving back money to
21 developers when their subdivisions fill and I think it's
22 going to be a very controversial case given the number of
23 public comments that have already been made here at the
24 Commission, so we will be certain that you get on that
25 mailing list.
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THE WITNESS:Thank you so much.
COMMISSIONER SMITH:Thank you.
COMMISSIONER REDFORD:Thank you.
(The witness left the stand. )
COMMISSIONER SMITH:Dave Bergh.
7 DAVE BERGH,
8 appearing as a public witness, having been first duly
9 sworn, testified as follows:
10
11
12
13 BY MR. HOWELL:
EXAMINATION
14 Q Sir, could you state your full name and
16 A
15 spell your last name for the record, please?
17 Q
18 address, please?
19 A
20 Idaho, 83647.
21 Q
Dave Bergh, B-e-r-g-h.
And Mr. Bergh, can you give us a mailing
10542 Old Highway 30, Mountain Home,
And sir, do you have a statement you'd
22 like to give the Commission tonight?
23
24
25
A
Q
A
I do.
Please go ahead.
First off, Commissioners, I appreciate the
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1 opportuni ty to be here this evening. I recognize the
2 difficul ty in your positions in making these decisions.
3 You've got a lot of variables that you have to factor in.
4 I have a brief letter that I would like to read into the
5 record, if I could, and then make some comments
6 subsequent to that.
7 Dear Commissioners, my name is Dave Bergh
8 and I am the Chairman of the Elmore County Agri-Business
9 Coali tion Incorporated which represents numerous
10 cattlemen, dairymen, ag producers and ag businessmen in
11 Elmore County.
12 We're all concerned about this latest
13 request for a rate increase of 15 percent to the
14 irrigation class. As a group, we feel that the
15 irrigation class is being unfairly assessed in this case.
16 It is our understanding that part of the increase in
17 Idaho Power's costs is due to providing new service and
18 the associated infrastructure with the ever-expanding
19 residential and commercial customers that have come into
20 Idaho in the last decade or so. Irrigation demand has
21 been flat or even declining for many years, yet the rate
22 increase request seems to assume that all classes are
23 increasing at an equal rate. In fact, nothing could be
24 further from the truth. In some areas irrigation demand
25 has decreased as irrigated farmland is slowly sold and
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1 developed into urban and commercial uses, which are the
2 rate classes experiencing the fantastic growth rates of
3 the latest economic boom cycle in Idaho.
4 Many of our members operate high lift
5 farming operations and these operations have seen their
6 rates go up drastically since 2001. Irrigation energy is
7 by far the largest single line item in most of their
8 budgets and is threatening their economic well-being in
9 many cases. The abandoned Bell Rapids proj ect is a prime
10 example of what many of these operations could look like
11 if rates continue on the current trend. 16,500 acres of
12 prime Idaho land went out of production overnight. The
13 ripple effects of these types of situations are wide
14 ranging and devastating to small rural economies all
15 across southern Idaho.
16 As agricultural producers, we have no way
17 to recapture these increased energy costs in our
18 operations and we're subject to commodity prices which we
19 have no control over. In addition, we've experienced
20 skyrocketing input costs over the last two to three
21 seasons. Fuel and fertilizer costs have increased well
22 over 200 percent in many cases since 2006. The equipment
23 and labor costs have also risen drastically. We operate
24 wi th no assurances that we can achieve posi ti ve returns
25 on our invest~ent from year to year in agricultural
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1 production. We take tremendous risks for little reward
2 in most years and we are the economic backbone of
3 southern Idaho. It is important to consider the impact
4 of numerous and large rate hikes on these producers and
5 the potential damage to Idaho's economy should they go
6 out of production due to the excessively high energy
7 costs.
8 We would like to see the irrigators work
9 with the IPUC and the Idaho Power Company to devise a
10 workable solution to this situation that would be
11 equi table to all parties involved. Respectfully, Dave
12 Bergh.
13 As I think about this situation and
14 Senator Corder said it very eloquently, it just appears
15 that the agricultural rate class has been singled out
16 somewhat in the last several years. Our rate increases
17 are always significantly higher in my experience than
18 most of the other rate classes and yet, as a business
19 person, when I look at that in my own operation at home,
20 I believe there's four, possibly five, different metering
21 locations and each of those locations probably averages a
22 quarter of a million dollars in gross revenue for Idaho
23 Power and yet, we have these residential customers that
24 are increasing demand for Idaho Power and my guess is the
25 average gross revenue from each of those is somewhere in
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1 the $1,000 a year range and yet, I don't see that we're
2 ever given any credit for economies of scale as
3 agricul tural irrigators and ratepayers.
4 Maybe that's reflected somewhere and I'm
5 no expert. I wouldn't pretend to stand up here and go
6 head to head with Idaho Power. I'm sure that they can
7 justify their increase with all their staff that they
8 have and the numbers that they put behind it, but I can
9 tell you personally that I used to be able to budget $100
10 an acre per year to irrigate the 1,000 acres that I own.
11 My cost this year, I just figured my last power bill, is
12 well over 200, and approaching the $250 mark per acre. I
13 just don't, I don't see where we're driving that kind of
14 demand as a rate class.
15 I understand that Idaho Power has costs
16 that they have to cover. We as producers have no way to
17 recapture our costs when that kind of a hit comes out of
18 my pocket. This increase alone will cost me $30,000 next
19 year. That's just the increase. I have no way to
20 recapture that. We're looking at a pivotal year in
21 agricul ture right now. Input costs, as I indicated, have
22 increased dramatically, particularly in the last 18
23 months. Fertilizer costs have skyrocketed and there was
24 a very quick run-up in commodity prices associated with
25 that, but it was equally quick to decline and commodity
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1 prices are back to historical levels.
2 Unfortunately, input costs are remaining
3 extremely high and we're looking at a detrimental
4 si tuation, in my opinion, and I don't quite know how we
5 sol ve this, but I think it's incumbent on you as a
6 Commission to understand all the circumstances that are
7 associated with our operations and how we're impacted by
8 these rate increases. A 5, 10, 15 percent rate increase
9 is certainly significant to everyone, but in terms of raw
10 dollars to these operations, it's a huge increase,
11 absolutely huge, and it appears to me that there's almost
12 an arbitrary number that's picked out.
13 These rate increases, these requests, come
14 across your desk one after the other after the other and
15 there's a compounding effect. Every time that base rate
16 is increased and they come back in and request that 5,
17 10, 15 percent increase on the base rate, it's a larger
18 base rate than it was the last time they requested it, so
19 it's like compound interest. It just keeps building and
20 building and building, and like I said, I don't envy your
21 posi tion. I realize these are difficult situations, but
22 I think that we need to look at something a little bit
23 different, perhaps, for the irrigation rate class;
24 voluntary conservation programs, let's look at efficiency
25 programs, capping programs, whatever we need to do short
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1 of just non-stop base rate increases because we're going
2 to reach a tipping point, I think, at some point in the
3 very near future looking at the economic situation the
4 way it is right now.
5 COMMISSIONER SMITH: Thank you. Let's see
6 if there are any questions.
7
8 CROSS-EXAMINATION
9
10 BY MR. HOWELL:
11 Q Mr. Bergh, do you or members of your
12 association participate in the Irrigation Peak Rewards
13 Program?
14 A We have at times, yes.
15 Q And what do you think the success of that
16 program in your own experience is?
17 A It depends on the operation. Each
18 operation has its own specific circumstances that it
19 In some of the smaller operations , it's adeals with.
20 very efficient and workable situation. They can refill
21 their system. For instance, in the Peak Rewards Program,
22 they can be off and back on or perhaps they have certain
23 segments of the operation they can turn off versus
24 others, leave some running so you don't lose too much
25 time irrigating. It's always a balance between okay,
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22
1 what's the potential damage to my crop versus the
2 potential savings on the power side, and in some cases,
3 these larger operations cannot shut down and refill the
4 system when they start back up in a reasonable amount of
5 time. They lose too much time getting back up and
6 running again. It takes in some cases several hours to
7 refill everything once it's shut off.
8 MR. HOWELL: Thank you, sir. No further
9 questions.
10 MS. NORDSTROM: No questions.
11 COMMISSIONER SMITH: Thank you very much.
12 We appreciate you coming.
13 COMMISSIONER REDFORD:Thank you.
14 (The witness left the stand.)
15 COMMISSIONER SMITH: Ron Matthews.
16
1 7 RON MATTHEWS,
18 appearing as a public witness, having been first duly
19 sworn, testified as follows:
EXAMINATION
23 BY MR. HOWELL:
24
25
Q Mr. Matthews, could you state your name
and spell your last name for the record, please?
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1 A My name is Ronald Matthews,
2 M-a-t-t-h-e-w-s. I reside at 15926 Sunburst Drive,
3 Caldwell, Idaho, 83607.
4 Q Thank you, sir. Do you have a statement
5 you'd like to give tonight?
6 A Yes, I do.
7 Q Please go ahead.
8 A I have read the PUC website and the
9 proposals that they made for working on this project and
10 I did fall asleep several times reading it, but I agree
11 with the proposals of the PUC Staff to be sound choices
12 in a changing economic environment. In the near future
13 there will still be profound restraints on the
14 availabili ty of energy and natural resources.
15 The proposal of three tiers beginning at
16 zero to 1,000 kilowatts and then 1,000 to 2,000, second
17 tier, and the. third tier beginning at 2,000 is very
18 sound, very forward looking. I find it wise to dig deep
19 into the IPC customer profiles to discover the true and
20 yet well known reasons that people sign up for payment
21 plans and an increasing number of people fail to
22 negotiate through those plans.
23 Although it is an exceptionally good idea
24 to increase the funding towards weatherization plans, it
25 is foreseeable that this will not be enough and an
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1 invisible wall will be reached wherein finding
2 applications for the funding will be increasingly
3 difficul t. Consider it as neighborhood saturation of
4 good weatherization. At that point another tried and
5 true application needs to be made of the funding; solar
6 preheating of the cold water intake to the residence hot
7 water tanks which has never been discussed.
8 That has worked as a national policy for
9 Israel since the 1967 six-day war. Power consumption
10 needed to be reduced by half and preheating the water
11 tank reduced national power consumption by 30 percent.
12 Most people think that's strictly a desert area, but I've
13
14
been to Israel three times and it snowed twice. It is
just pretty much the same as it is here.
15 Idaho Power, i ts executives and its parent
16 corporation IDACORP need to do some serious
17 bel t-tightening right along with its customers. We are
18 in a recession. One measure of a recession or depression
19 is the number of jobless. We have enough jobless people
20 today to show that we are in a deep and long-lasting
21 recession. So far, one-third of the required number of
22 people are jobless to officially indicate a depression.
23 When by April 2009 consumer inflation begins to match the
24 fiat inflation of 20 percent, a greater number of jobless
25 people will significantly push Idaho into a depression.
CSB REPORTING'
[phone]
698 MATTHEWSPublic
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1 Now, some people say well, there's no
2 reason to think this or there's been no warnings. I told
3 my wife three years ago this was coming. The indicators
4 were there if you weren't too much of an optimist.
5 Idaho Power is currently not planning for
6 IDACORP, the parent of Idaho Power, hasany of this.
7 placed in print on-line: "Our improved financial
8 performance is due, in part, to progress from prolonged
9 and purposeful regulatory efforts. This year's
10 regulatory accomplishments both in Oregon and Idaho
11 highlight the achievement of key milestones of our
12 strategy. We are still not earning our allowed rate of
13
14
return. Looking forward, we must continue our strategy
of timely regulatory filings. Idaho Power Company's net
15 income, the primary component of IdaCorp' s net income,
16 was 86.4 million, an increase over the last quarter of
17 22.8 million. This was due mostly to an increase of base
18 rates and an increase of 65.7 million in PCA rates."
19 What this says to the average person is
20 that IPC, Idaho Power Company, will continue filing at
21 the PUC for more increases multiple times through the
22 year until they feel the income is close to what they
23 percei ve as how much they are worth. They have this in
24 print on the internet. Yes , it does make some people
25 angry.
CSB REPORTING
[phone]
699 MATTHEWS
Public
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1 Idaho Power's Michael, and I could get
2 this mispronounced, Ybarguen, Y-b-a-r-g-u-e-n,
3 spokesperson for Idaho Power has gone on public record
4 during December 2008 stating that Idaho Power will
5 continue to supplement increasing demands with coal, gas
6 and purchasing imported electricity. There is no clean
7 coal. No matter what the coal companies' advertisements
8 say on the TV, there is no clean coal plants on line or
9 planned. During the last year there was a 20 percent
10 drop in the availability of natural gas through North
11 America. Yet, Idaho Power has no plans for green energy.
12 Ybarguen stated that wind power was too messy to deal
13 wi th and that' it had some sticky points. He also said
14 that Idaho Power plans to run a 500 kilovolt line from
15 the coal plant in Boardman that they own to PacifiCorp' s
16 500 kilovolt line near Twin Falls. That's with no drops
17 in Idaho. Why do they need this?
18 Idaho sits on enough geothermal energy in
19 the Snake River Plain to give Idaho more power than all
20 of the Bonneville complex, yet Idaho Power will not
21 consider this new direction. Instead, they plan to be
22 here month after month with the PUC. That is the end of
23 my statement.
24 COMMISSIONER SMITH: Thank you. Let's see
25 if there are any questions.
CSB REPORTING
[phone]
700 MATTHEWS
Public
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1 MR. HOWELL: No questions.
2 MS. NORDSTROM: None from the Company.
3 COMMISSIONER SMITH: Nor I. Thank you,
4 sir, for your statement.
5 THE WITNESS: Would you like a copy?
6 COMMISSIONER SMITH: If you could give a
7 copy to the reporter, she would be most appreciative and
8 I was going to ask Mr. Bergh the same thing with his
9 letter.
10 THE WITNESS: Thank you.
11 COMMISSIONER SMITH: Thank you for your
12 time.
13 (The witness left the stand.)
14 COMMISSIONER SMITH: Sid Freeman.
15
16 SID FREEMAN,
17 appearing as a public witness, having been first duly
18 sworn, testified as follows:
19
20 THE WITNESS: Commissioners, I, too, have
21 a prepared statement. It's somewhat short and to the
22 point and I will admit, it is a bit selfish.
23 MR. HOWELL: Mr. Freeman, if we could,
24 let's get you on the record.
25 THE WITNESS: Absolutely.
CSB REPORTING
[phone]
701 FREEMAN
Public
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1 EXAMINATION
2
3 BY MR. HOWELL:
4 Q Could you state your name and spell your
5 last name for the record, please?
6 A My name is Sid Freeman, F-r-e-e-m-a-n.
7 Q And, sir, do you have a mailing address?
8 A I do, 27406 Farmway Road, Caldwell,
9 83607.
10 Q Thank you, sir, and now you may continue.
11 A Thank you. As I said, I do have a
12 prepared statement and I will take the liberty of handing
13 this young lady one. It is short and to the point and,
14 again, it is somewhat selfish. I'm a small family farmer
15 and I'll just read what I've got here and we'll go from
16 there. My name is Sid Freeman. I am a third generation
17 Canyon County farmer. My wife and I own and operate a
18 small family farm in the northwest Canyon County. We
19 grow sugar beets, onions, seed beans, wheat and corn on
20 about 450 acres.
21 We currently have eight separate
22 electrical meters that would be affected by the
23 irrigation proposal, and in the 2008 crop year, the power
24 that ran through these meters cost Sunny View Farms
25 $7,200.61. With a 15 percent increase, that would add
CSB REPORTING.
[phone]
702 FREEMANPublic
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1 another $1,080.09 cents to that amount. This proposal in
2 itself may not seem like a lot of money, but make no
3 mistake about it, it could just very well be the
4 proverbial straw that breaks our back.
5 You see, Commissioners, if you take this
6 15 percent increase and add it to all the other increases
7 that Mr. Bergh has alluded to, as well as I, the seed,
8 the fertilizer, the chemicals, the fuel, the repairs, the
9 taxes, the water, the insurance, the labor, and let's not
10 forget the transportation, you are now talking about tens
11 of thousands of dollars worth of increases in just a
12 couple of years. This is not an exaggerated figure by
13 any means.It is the facts. According to the Idaho --
14 according to the 2002 National Agricultural Statistics,
15 my farm is just one of 12,644 small irrigating farming
16 operations in'the State of Idaho that are 499 acres or
17 less.
18 Unlike Idaho Power, we are unable to go
19 before a commission and ask for permission to pass these
20 increases along to our customers. We have absolutely no
21 choice but to get even more efficient or go out of
22 business, and with the recent downturn in the commodity
23 prices which Mr. Bergh also alluded to, going out of
24 business is becoming a much higher degree of probability.
25 I don't know just how much more we can stand. Therefore,
CSB REPORTING
[phone]
703 FREEMAN
Public
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1 I am here this evening to adamantly oppose the irrigation
2 proposal and I, too, thank you for your time in allowing
3 me to be here.
4 COMMISSIONER SMITH: We thank you for your
5 time in being here. Do you have questions?
6 MR. HOWELL: No questions.
7 MS. NORDSTROM: None.
8 COMMISSIONER SMITH: Commissioner Redford?
9 COMMISSIONER REDFORD: No questions.
10 Thank you, sir.
11 COMMISSIONER SMITH: Thank you very
12 much.
13 THE WITNESS: If I may add, we have
14 participated in some of Idaho Power's sprinkler
15 rebuilding programs. We do not participate in the
16 program where you turn your power off at peak times and
17 turn it back on in the evening because we, too, are
18 afraid of what damage it could do to our crops and I am a
19 big proponent of conservation incentive programs. I
20 think it's very important. Thank you.
21 COMMISSIONER SMITH: Thank you very much.
22 (The witness left the stand.)
23 COMMISSIONER SMITH: Gary Richardson.
24
25
CSB REPORTING
[phone]
704 FREEMAN
Public
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1 GARY RICHARDSON,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 THE WITNESS: My name is Gary Richardson
6 and I live at 746 Santa Paula Court in Boise, 83712. I
7 have been a customer of Idaho Power for 30 years. I've
8 had a notion kicking around in my head and I know having
9 worked at this Commission for a decade as your
10 information officer, I know this does not directly bear
11 on this rate case, but it's an idea that's been kicking
12 around in my head for awhile and I wanted to get it on
13
14
the record, especially after I saw the article in the
paper this morning about just exactly what elements this
15 rate case is trying to recover costs for, and my idea is
16 that while Idaho Power, I guess, about a decade ago gave
17 up what was a pretty ambitious solar power program and as
18 a consequence, they lost some of the expertise they had
19 in that area and that's, I think, unfortunate because
20 it's a great resource here and it seems to me that with
21 the capitalizing ability that a public utility has that
22 it could be encouraged or incentivized or somehow
23 directed to invest in solar facilities.
24 Mr. Matthews mentioned, for instance,
25 preheating water which is a no-brainer and it's
CSB REPORTING
[phone]
705 RICHARDSON
Public
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1 relati vely inexpensive. It would be fairly expensive for
2 an individual homeowner to put the necessary collectors
3 to do that on their home, but if a utility were to
4 finance it and rate base it and then charge me for the
5 power I'm using off of that facility, be ita
6 photovol taic array or some kind of water heating, and
7 this could be done for both natural gas utili ties and
8 electric utili ties, anyway, the utility would rate base
9 these solar facilities, collect rates on them until
10 they've at least depreciated out, and then they could
11 turn them over to the homeowners, and in addition to
12 relieving the investment in gas, natural gas, plants or
13 addi tional coal plants or whatever other facilities might
14 be in the pipeline, we have -- we're transmission
15 constrained, at least in the nation and I think in the
16 region.
17 When I looked at the elements of this rate
18 case, it seemed like a lot of it had to do with
19 distribution and transmission and a little bit of rate
20 base. They had something like 180 megawatts, at least in
21 their news release, plus, what, about a
22 billion-and-a-half of purchases from other utilities, it
23 seems to me if they were investing that in distributed
24 power on residential and commercial customers'
25 properties, they would still own the plant, but it would
CSB REPORTING
[phone]
706 RICHARDSON
Public
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1 be distributed plant and it wouldn't be plant that would
2 have to be transmitted into the home and the excess
3 power, if it were not always producing exactly what the
4 residence or the commercial facility needed, the excess
5 power could go back into the lines and since it's going
6 the other way, it's not going to create any greater
7 demand for transmission and distribution facilities, and
8 I talked to Rick Sterling about this a few months ago and
9 at the time I was thinking, you know, maybe there was
10 some way under PURPA that you could do this and I don't
11 know what the details are about the costs, whether we're
12 right at the breaking point.
13 When I talked to Rick, he didn't think
14 that the cost of photovoltaics was low enough yet, but my
15 guess is if a utility starts buying a lot of it, a lot
16 more of it is going to get more mass produced than has
17 been and you're going to get a drop in the costs of the
18 photovol taics, the water systems and so forth, so you
19 would get a cost reduction at the same time all these
20 other mechanisms would work and I think ultimately, it
21 would work out to be more reasonable than new plant in a
22 centralized location, so that was basically my idea.
23 Let me see if I missed something here.
24 Yeah, that's it. Thank you very much and good luck on
25 your decision.
CSB REPORTING
[phone]
707 RICHARDSON
Public
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1
2
COMMISSIONER SMITH: Thank you, Gary.
Let's see if there are questions.
3
4
5
6 again.
MR. HOWELL: No questions.
MS. NORDSTROM: None.
COMMISSIONER SMITH: It's good to see you
7 (The witness left the stand.)
8
9
COMMISSIONER SMITH: Bill Goodnight.
10 BILL GOODNIGHT,
11 appearing as a public witness, having been first duly
12 sworn, testified as follows:
13
14
15
16 BY MR. HOWELL:
17 Q
EXAMINATION
Sir, could you state your name and spell
18 your last name for record, please?
19 A My name is William Goodnight, last name
20 Goodnight, just the opposite of good morning,
21 G-o-o-d-n-i-g-h-t, and I live at 1014 East Franklin
22 Street, 83712.
23 Q And do you have a statement you'd like to
2 4 give the Commission?
25 A I do. It's not prepared. As normally
CSB REPORTING
[phone]
708 GOODNIGHTPublic
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1 with my life, nothing is, as Diane will attribute. I do
2 not have a problem with Idaho Power recouping costs to
3 keep their Company viable and to make a profit. I do not
4 have a problem with allocation of costs among ratepayers.
5 I do have a more general concern about the allocation of
6 costs generally not among ratepayers but among
7 beneficiaries. I'm particularly sympathetic to the
8 irrigators that have spoken here night who are bound and
9 waterlogged to the Constitutional principle in Idaho of
10 first in time, first in right; however, in allocation of
11 cost for power in Idaho, the rule seems to be last in
12 time, first in right and we are forced to subsidize
13 people who are not even here.
14 I see the nearly $600,000 cost attributed
15 to new transmission lines, new substations and so forth
16 that Idaho Po~er claims are to be borne by existing
17 ratepayers; however, the Eckert Road substation which
18 serves primarily, if not exclusively, Harris Ranch, none
19 of the costs were borne by Harris Ranch, nor was the
20 Highway 55 north substation which serves almost
21 exclusively Avimor Subdivision, the costs of which were
22 not borne at all by Avimor but by existing ratepayers.
23 I don't think it's fair. I think a new
24 concept needs to be adopted by the Public Utilities
25 Commission that allocates costs for growth to the people
CSB REPORTING
[phone]
709 GOODNIGHT
Public
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1 benefi ting from that growth more directly and that is the
2 developers. I don't know if it's knowledgeable by most
3 citizens, but every meter that goes on every new home in
4 the Treasure Valley or wi thin Idaho Power's service area
5 is paid for by existing ratepayers. It is not paid by
6 the contractor or the developer or the homeowner. It is
7 paid by you and me, existing ratepayers. It's ludicrous,
8 so that's the thrust of my comments is we have to start
9 distributing the cost of growth to those who benefit from
10 growth and that is the new -- the people that aren't even
11 here yet that' are demanding the services that we have to
12 provide as ratepayers.
13 COMMISSIONER REDFORD: Thank you, sir.
14 COMMISSIONER SMITH: Are there any
15 questions?
16 MR. HOWELL: No questions.
17 MS. NORDSTROM: None.
18 COMMISSIONER REDFORD: No questions.
19 Thank you, sir.
20 COMMISSIONER SMITH: Thank you,
21 Mr. Goodnight.
22 ( The witness left the stand.)
23 COMMISSIONER SMITH: That brings us to the
24 end of the persons who have signed up tonight to testify;
25 however, if there is anyone in the audience who wishes to
CSB REPORTING
[phone]
710 GOODNIGHT
Public
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20
1 make a statement, now is the time you could come forward.
2
3 QUEY JOHNS,
4 appearing as a public witness, having been first duly
5 sworn, testified as follows:
6
7 EXAMINATION
8
9 BY MR. HOWELL:
10 Q Sir, could you state your full name and
11 spell your last name for the record, please?
12 A Yes, Quey Johns, J-o-h-n-s. Quey,
13 Q-u-e-y.
14 Q And Mr. Johns, could you give us your
15 mailing address, sir?
16 A 48803 State Highway 78, Mountain Home,
17 Idaho, 83647.
18 Q And, sir, do you have a statement you'd
19 like to give the Commission?
A Yes. When Senator Corder talked, it
21 finally clicked on me maybe what this is about. I live
22 down by the Bruno Sand Dunes. I farm there about a
23 500-acre farm. I've been there since '79. About three
24 years ago Idaho Power came in and replaced an existing
25 line. This existing line feeds the Bruneau Sand Dunes
CSB REPORTING
[phone]
711 JOHNS
Public
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1 State Park, my farm and home and a Fish and Game pump
2 that floods some of the Bruneau duck ponds. There's also
3 a pump there that runs water over to the Bruneau Sand
4 Dunes during the winter, a small pump, and then there's
5 another pump that Idaho Power runs also in the duck ponds
6 and then there's another 160-acre piece that's off this
7 feeder line.
8 The original line goes down through the CJ
9 Strike management area. To my knowledge, it is located
10 on Idaho Power property wi thin CJ Strike Wildlife
11 Management. When they first came and started to -- and
12 where they replaced line to is out on Highway 78. When
13 it first came, they started and I saw the survey markers,
14 it kind of concerned me. I wasn't real thrilled about
15 having an artistic power line going down the road and as
16 I looked at it, I tried to talk to Idaho Power. By the
17 time I found somebody at Idaho Power, they basically were
18 are already there and going.
19 What concerns me about this in them
20 putting in this line is the old line did go through the
21 management area and it had been, I think, peppered with
22 shotgun shells, so it did go down occasionally, maybe
23 once every three or four years, okay, so we do have some
24 blackouts or, come on, knockouts, fallouts, you lose
25 power. My thought in it as I looked at it, okay, get all
CSB REPORTING'
[phone]
712 JOHNS
Public
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.
1 the information here, when they took the line out, they
2 removed maybe five poles, six poles. With the new line
3 they put in, it has about 40 brand new poles in it with
4 considerably more and brand new wire. I looked at it as,
5 folks, you could have come up out of the ponds just a
6 li ttle bit and basically put the same power line back in.
7 It still serves the same people, so in
8 this rate case, am I paying for them putting in this
9 gorgeous line that yeah, it's on the highway and it's
10 really nice to service and it's really neat, but am I
11 is that where this rate case comes from instead of going
12 in and replacing the wire on the existing poles and a
13
14
much shorter route, because if this is going to become
part of the rate for me to pay, then shouldn't I have the
15 opportuni ty to put in some comment about this before I
16 get this "new infrastructure"?
17 Now, you've talked about the Peak Rewards
18 thing. Yes, I've been in that for three years, four
19 years. The first year I did it one day a week, now I do
20 it three days a week. Personally, I can't see any
21 difference between what we had before in service, the
22 number of dropouts that happen anyway, the bumps that
23 happened, I can't see any difference and I don't see
24 really any difference in service for staying there. Now,
25 the Peak Rewards where I'm at, i will say that I believe
CSB REPORTING
[phone]
713 JOHNS
Public
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1 it's made me a better operator because I know every day
2 when that water is going to go off and, therefore, I've
3 become a better manager about fixing leaks in the lines
4 and doing things like that.
5 However, as was stated, I do have a
6 smaller place and it is easier to get back up and going
7 after it goes, so it works for me on that one. Again,
8 however, if this is part of what this rate increase is
9 about for the new stuff they put in, I have a real hard
10 problem with this. As I figured it up to begin with or
11 where I came from, this is a $100,000 solution to a
12 $5,000 problem and if that's going to be tacked on me
13 down here, then I believe I ought to have something to
14 say about what they're doing about that before it
15 happens. I believe that would only be fair.
16 Other than, no, I'm not really in favor of
17 Idaho Power's rate increase, where they are here. I
18 concur with what others have said in the farming
19 industry. Yeah, it looked great, $10.00 wheat, $200 hay,
20 but it's not here to last.
21 COMMISSIONER SMITH: Does that complete
22 your statement?
23
24
25
THE WITNESS: Yes.
COMMISSIONER SMITH: Thank you. Let's see
if there are questions.
CSB REPORTING
[phone]
714 JOHNS
Public
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20
21
22
23
24
25
1 MR. HOWELL: No questions.
2 MS. NORDSTROM: None.
3 COMMISSIONER SMITH: Thank you very much,
4 sir.
5 (The witness left the stand.)
6 COMMISSIONER SMITH: Is there anyone else
7 who wishes to make a comment that didn't sign up to do
8 so? Seeing no takers, I just want to thank everyone for
9 your attendance tonight and taking the time to come down
10 and it's very important to our process to hear from the
11 public and we appreciate it very much, so we are
12 adj ourned for this evening and for those who participate
13 tomorrow, we'll see you at 9: 00 a. m.
14 (The Hearing recessed at 8:20 p.m.)
15
16
17
18
19
CSB REPORTING
[phone]
715 COLLOQUY