HomeMy WebLinkAbout19900829Vol I Prehearing Conf.pdfI
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ORIGINAL
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO RATEBASE THE INVESTMENT
REQUIRED FOR THE REBUILD OF THE
SWAN FALLS HYDROELECTRIC PROJECT.
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) CASE NO. IPC-E-90-2
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) CASE NO. IPC-E-90-8
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IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR THE RATE BASING
OF THE MILNER HYDROELECTRIC
PROJECT, OR IN THE ALTERNATIVE, A
DETERMINATION OF EXEMPT STATUS FOR
THE MILNER HYDROELECTRIC PROJECT.
HEARING BEFORE
COMMISSIONER DEAN J. MILLER (Presiding)
COMMISSIONER PERRY SWISHER
COMMISSIONER RALPH NELSON
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Commission Hearing Room
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Boise, Idaho
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C)Date:August 22, 1990 -".."..~
VOLUME I - Pages 1 - 21
7WEDRICKCOURT REPORTING
537 W. Bannock P.O. Box 578
Suite 205 Boise, Idaho 83701
(208) 336-9208
. .: We offer. . . BaronDaa
Mlcrotranscriptlon™ by .,
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APPEARANCES
For the Staff:MICHAEL S. GILMORE, Esq.
and BRADFORD PURDY, Esq.
Deputy Attorneys General
472 West Washington
Boise, Idaho 83720
For idaho Power
Company:
LARRY D. RI PLEY, Esq.
and STEVEN L. HERNDON, Esq.
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707-0070
For idaho ConsumerAffairs, Inc.:HAROLD C. MILES, Esq.
Energy and Natural Resources
Commi s sian
Idaho Consumer Affairs Inc.
316 Fifteenth Avenue South
Boise, Idaho 83651
For FMC:CLEMONS, COSHO & HUMPHREY, PA
by R. MICHAEL SOUTHCOMBE, Esq.
815 West Washington
Boise, Idaho 83702-and-
PILLSBURY, MADISON & SUTRO
by JAMES N. ROETHE, Esq.
P.O. Box 7880
San Francisco, California
94120
For Afton Energy Inc.:ORNDORFF & PETERSON
by MARK E. WIGHT, Esq.
Suite 230
1087 West River Street
Boise, Idaho 83702
For Industrial
Customers of Idaho
Powe r :
DAVIS WRIGHT TREMAINE
by GRANT E. TANNER, Esq.
and PETER RICHARDSON, Esq.
2300 First Interstate Tower
1300 southwest Fifth Avenue
Portland, Oregon 97201
HEDRICK COURT REPORTING
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APPEARANCES
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I \ 1 For J . R.Simplot DAVID H.HAWK,Director
Company:Energy Natural Resources
2 J . R.Simplot Company
I P .0.Box 27
3 One Capital CenterBoise,Idaho 83707
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I HEDR I CK COURT REPORTING APPEARANCES
P .0.Box 578,Bo i se,ID 83701
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BOISE, IDAHO, WEDNESDAY, AUGUST 22, 1990, 9:30 A.M.
COMMISSIONER MILLER:Let's go on the
record now and we'll take up now consol ida ted
prehearing conferences in Cases IPC-E-90-2 and
IPC-E-90-8.Although it's an imposition for the
o parties, let me ask you each to make the appearances
for the record again so that we'll have them in our
court reporter's record.
MR. RIPLEY:Larry D. Ripley and
Steven L. Herndon appearing on behalf of Idaho Power
Company.
COMMISSIONER MILLER:Mr. Miles.
MR. MILES:Harold C. Miles,
representing Idaho Consumer Affairs Inc.
COMMISSIONER MILLER:Mr. southcombe.
MR. SOUTHCOMBE:R. Michae 1 Southcombe,
Clemons, Cosho & Humphrey; James N. Roethe, Pillsbury,
Madison & Sutro, for FMC.
COMMISSIONER MILLER:Afton.
MR. WIGHT:Mark Wight from Orndorff and
Peterson appearing for Afton Energy Inc.
COMMISSIONER MILLER:Mr. Tanner.
MR. TANNER: Grant E. Tanner and
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Peter Richardson of Davis Wright Tremaine on behalf of
the Industrial Customers o~ Idaho Power.
COMMISSIONER MILLER:Mr. Hawk.
MR. HAWK:David H. Hawk, H-a-w-k, on
behalf of the J. R. Simplot Company.
COMMISSIONER MILLER:And Mr. Gilmore.
MR. GI LMORE :Michael S. Gilmore and
Brad Purdy, Deputy Attorneys General, on behalf of the
Commission staff.
COMMISSIONER MILLER:All right, thank
you.
In these two proceedings, we've had
informal discussions off the record prior to convening
our formal conferences, and as a result of those, I
think we are prepared now to allow the parties to
prepare proposed scheduling procedures for the
handling of each of the two cases, recognizing that
the procedures for each case may be different.
It's been suggested, and most -- as far
as I can tell, all parties seem to concur that in the
Swan Falls case, rather than setting evidentiary
hearings at this point, the appropriate procedure
would be for the parties to file written briefs or
statements of position that would allow the Commission
to have a better understanding of what appear to be
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primarily legal issues associated with this case; and
based on those statements of position, the Commission
could then determine whether to enter rulings based on
the written record or written statements of position,
or to schedule further proceedings.So that, in the
Swan Falls case, perhaps the parties could discuss a
schedule for the submission of written statements of
position.
In the Milner case, all parties agree
that that appears to be a more traditional, fact-based
case where factual questions are more predominant than
legal, and as a consequence, evidentiary hearings will
be appropriate in the Milner case.So, the parties in
that case should discuss a hearing schedule to be
pre c e d ed, 0 f co u r s e, by pre f i lin g and s c h e du 1 e san d
discovery schedules if appropriate, recognizing
Mr. Ripley's observation that this is a matter that
should be handled somewhat expeditiously by the
Commission, given the fact that the Federal Energy
Regulatory Commission has done certain things and as a
consequence of that, the Company is already taking
certain actions, and as a consequence of that, our
decision should not be unduly delayed.So, the
parties should, in devising their schedule for Milner,
should take into account those circumstances.
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So, in a moment, we'll go off the record
and allow the parties to discuss their preferences
within that framework.Before we do:
Commissioner Nelson, do you have
anything else to add?
COMMISSIONER NELSON:I don't think so
at this time.I had some thoughts on the
appropriateness of it all, but I think we've covered
it.
COMMISSIONER MILLER:Commissioner
Swisher, anything else before we go off the record?
COMMISSIONER SWISHER:Everything I did
off the record is incriminating and appealable, so
I'll not repeat it now.
COMMISSIONER MILLER:We'll make every
effort to keep those comments out of the record.
Mr. Tanner.
MR. TANNER:Mr. Chairman, do you have
any timings to suggest as to when these statements of
position should be submitted?
COMMISSIONER MILLER:Well, I would
think sometime within 14 to 30 days.Probably closer
to 30 would give everybody adequate opportunity.
MR. TANNER:Okay.
COMMISSIONER MILLER:With that
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guidance, can we go off the record then and allow the
parties to discuss --
"MR. MI LES:Mr. Chairman, may I --
COMMISSIONER MILLER:Mr. Miles.
MR. MILES:-- ask a question?
Will we be allowed to submit some
questions to Idaho Power Company and receive their
replies before we submit the written statements?
COMMISSIONER MILLER: What sort of
questions do you have in mind, Mr. Miles?
MR. MILES:Well, there's some I've
,been making a list of different questions and
interrogatories.I noticed the staff submitted their
first already, and I think that the other parties
should be allowed the same prerogative.
COMMISSIONER MILLER:So, you're
suggesting the need for some discovery before
identifying of written position statements?
MR. MILES:Yes.
COMMISSIONER MILLER:Can you give us a
little clearer idea of what you'd like to inquire
into?
MR. MILES:Well, the water flows,
particularly.I've got a list here someplace.
COMMISSIONER SWISHER:You talking about
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Milner now?
MR. MILES:No, Idaho Falls.As I see
it, Swan Falls is two different issues.Clearly, the
Idaho Power Company can go ahead and rebuild the
Swan Falls dam with a 10.4 megawatt output.
There's a second proposition which is
even better fo r ratepaye r s, for them to be a II owed to
build -- rebuild it with the two,
twelve-and-a-half-megawatt turbans, because the costs
will be probably half of what it would be for -- to
construct the coal fire plant.
The question is whether there will be
enough water under the current Swan Falls agreement
and the pump water from the river to adequately
produce power with a regional plant factor for the
25 megawatts that they propose on the rebuil t.
COMMISSIONER MILLER:Let me suggest
this, Mr. Miles:I think that holding up the filing
of written statements to, in essence, conduct formal
discovery might not be necessary.I would like to
suggest that you outline your questions in some format
and then discuss those with the Company informally and
see if the Company can't provide you wi th the
information you want, and you could then include that
in your written comments. If the Commission comes to
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the conclusion later that there needs to be a thorough
investigation of water rights adequacy, we can do
that. But for the preliminary -- at this stage of the
game, I think that if the Idaho Power Company gave you
informally the information you'd like to have, you can
use that as the basis for your written comments.
And, Mr. Ripley, I'm sure you'd
cooperate in that regard, wouldn't you, by providing
Mr.
MR. RIPLEY:Yes, sir.
MR. MILES:Mr. Chairman, as I see it,
the idaho Power Company is subject to two regulatory
entities in the State of Idaho; and I refer to the
order submitted by the Idaho Department of Water
Resources under the 10th day of April, 1989, and I'm
particularly interested in item number five of the
order:
"The water right acquired under this
permit shall be junior and subordinate to all rights
to the use of water in the Snake River and sources
contributory thereto upstream from Swan Falls Dam
within the State of Idaho that are initiated later in
time than the priority date of this permit and shall
not give rise to any right or claim against future
rights for the use of water within the State of Idaho
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initiated later in time than the priority of this
permit."
And the permit, as I understand it, is
dated the 10th day of April, 1989, and idaho Power
Company, when they purchased the consolidated mine,
they acquired that mine's water rights and they have,
according to the water right application granted by
the Idaho Power and Water Resources in 1982, they were
granted in 9,500 CFS.The hydraulic capacity of the
plant is 8,400 CFS, so obviously, that's all they can
use.So, it seems to me there's a big confusion as to
how much water the Idaho Power Company has and what is
the date of the water permit.
COMMISSIONER MILLER:Well, those may be
questions well worth pursuing.At this point, of
course, the Commission isn't prepared to decide those
things.
I think the way to proceed here is,
Mr. Ripley, I'd like you to appoint or delegate
someone from your company to provide Mr. Miles any
information he thinks he needs to prepare his initial
comments.We would like to be assured that Mr. Miles
will obtain whatever information he thinks he needs to
prepare those comments.If tha t can be done
informally, that will eliminate the need at this point
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for formal discovery and will allow us to proceed
expeditiously.
So, Mr. Ripley, would you undertake to
insure that there is a person in the Company that can
provide to Mr. Miles the information that he thinks
may be helpful in preparing his comments?
MR. RIPLEY:Yes, sir.I'll make
arrangements that Mr. Miles has a contact person,
which will probably be myself, and then I will make
every effort to obtain responses to his questions from
the various departments of the Company.Just
listening to Harold, they are, indeed, mixed questions
of law and fact, and, in fact, Mr. Miles and I have
gotten along for a good many years and I think we'll
continue to do so.
COMMISSIONER MILLER:I'm sure you'll
have a cooperative and enjoyable relationship.
COMMISSIONER SWISHER:As will
Mr. Herndon.
MR. RIPLEY:Mr. Herndon will be at the
meetings.
COMMISSIONER MILLER:In this proceeding
as well.
All right, with that then, let's go off
the record in each of these cases, allow the parties
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1 to discuss their desires with respect to scheduling,
2 and we'll be available to you when you need us.We're
3 off the record.
4 (Discussion off the record.)
5 COMMISSIONER MILLER:We'll go back on
6 the record in IPC-E-90-8 and -2.
7 We've been off the record for some time
8 to allow the parties to devise scheduling procedures,
9 and Mr. Gilmore or Mr. Purdy, do you have something to
report for us?
MR. GILMORE:I can go ahead,
Mr. Chairman.
The parties have agreed to a scheduling
procedure for the Milner.There is some disagreement
on Swan Falls.Maybe I should run through Milner
first and get that out of the way, and then you can
address the disagreements for the Milner case, which
is IPC-E-90-8.
Idaho Power will have the initial filing
deadline.Its prepared direct case of testimony and
exhibits will have to be filed with the Commission on
Monday, September 24th.
The parties' deadline for submitting
discovery question for idaho Power will be about two
and a half weeks after that:Friday, October 12th.
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Idaho Power's deadl ine for answering
those wil 1 be another two and a half weeks:
Wednesday, October 31st.
And then the deadline for staff and
intervenors to prepare their direct filed cases of
testimony and exhibits will be Friday, November 9th,
which precedes the three-day weekend for Veteran's
Day.
Idaho Power's rebuttal deadline for
prepared rebuttal will be Wednesday, November 21st,
which is the day before Thanksgiving, and they have
ag reed to that.
And we have proposed setting aside three
hearing days the following week, the week after
Thanksgiving, Tuesday through Thursday, November 27th
through 29th.The reason we have set aside three days
is we hoped to address Swan Falls, which will be
tacked on at the end if necessary.We don't think we
will need three days for Milner by itself.
Then, for Swan Falls and for Milner,
there was a question about the timetable for filing
the statements of position.Maybe I should let
Mr. Miles present his position first so I don't
prejudice you, and then if I can respond.
COMMISSIONER MILLER:All right.
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1 Mr. Miles, do you have comments for us
2 on that question?
3 Well, yes.Since thisMR. MILES:
4 prehearing conference is so late in August that I
5 didn't anticipate there would be any bum's rush to get
6 the -- set the schedule for Swan Falls first part of
7 September and I had made plans for a couple of
8 meetings which will be practically the entire month of
9 September, so I'm very interested in the Swan Falls
issue and I was hoping that these dates could be set
at a later time than September.
COMMISSIONER MILLER:Okay.So, what
you're saying is that the parties have agreed on a
filing of position papers in September.Due to your
per sana 1 c ir cum s tan c e s , you co u 1 d n ' t meet the i r
September filing deadline. Is that basically it?
MR. MILES: Well, I would like to be
able to.I could probably submit a position paper in
time, but I would like to have been here to receive
the answers and the response of the Company and all
the rest that participated in all the hearing.
COMMISSIONER SWISHER:Are those
meetings in some place where you couldn't have those
materials forwarded to you?
MR. MILES:Well, I don't know.I was
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going up to Yellowstone Park, and also, the Tetons,
and I don't know where --
COMMISSIONER SWISHER:Are you in
continuing law?
MR. MILES:I didn't understand.
MR. RIPLEY:He's picking on us now.
MR. MILES:It would help,
Mr. Commissioner, if you'd pull your microphone
closer.
COMMISSIONER MILLER:Did I hear you,
Mr. Miles, that you think you could have a position
paper filed in September, but you would like any
subsequent procedures to be after that so that you can
participate in that?Is that what you said?
MR. MILES:I would like -- IYes.
can't see why they couldn't be after -- after Milner.
In fact, Milner is the biggest project.
COMMISSIONER MILLER:But you're saying
you could have an initial position paper filed in
September?
MR. MILES:Mr. Ripley suggested IYe s .
go over to Boise tomorrow -- and I could, I could do
that -- with a rough draft of what I'd like to in the
interrogatories -- I'd like to submit.
COMMISSIONER MILLER:Okay.We ll, I
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think what we're contemplating is that at this point,
we'll receive position papers from each of the
parties, and we will then determine what matters we
can decide without further hearings and what matters
will require further hearings.So, it looks to me
like if there are going to be further proceedings, you
could participate in those fully if you can get your
position paper filed in September.
Let's hear, though, from Mr. Gilmore and
see what the rest of the parties think.
MR. GILMORE:The remaining parties
proposed a comment schedule for filing position papers
in both cases.
Parties other than idaho Power would
file their position by Wednesday, September 5th.
Idaho Power would have one week to
respond, until Wednesday, September 12th.
And then if any of the parties wanted to
respond to idaho Power's response, that would be due a
week later:Wednesday, the 19th.
These are all September dates, excuse
me. So that, all the position papers would be in
front of the Commission no later than Wednesday,
September 19th.
In the event that there would be an
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1 evidentiary hearing for Swan Falls, there would be an
2 all-parties filing date of Friday, November 9th, which
3 is the file date for Staff and intervenors in the
4 Milner case.
5 And if parties need to rebut, they would
6 have until Wednesday, November 21st.
7 And then if there was an evidentiary
8 hearing in Swan Falls, that would follow on the tail
9 of Milner, and that would be the reason for blocking
out three days in November -- 27th, 28th, and 29th.
COMMISSIONER NELSON:Well, it would
seem to me like Mr. Miles will have an adequate chance
to present his position if he can get his paper filed
on the September 5th date.
Was it a further response that you were
concerned about, Mr. Miles?
MR. MILES:Well, there's a possibility,
Mr. Commissioner.
COMMISSIONER NELSON:You would only be
interested in filing a response if Idaho Power came
back and attacked your position on the water flow
issue, wouldn't you?
MR. MILES:That's -- that would be the
main thing, yes.Although, there might be other --
other issues.if -- as I said, there's two parts to
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the Swan Falls:It's the rebuild.There's no --
FERC's order to Idaho Power Company is going ahead
with the plans to rebuild át least up to the 10.4
megawatts.
COMMISSIONER NELSON:Okay, I didn't
understand that to be an issue with you.I thought
your main issue was the water flow necessary for 25
megawatts.
MR. MILES:Then there's a question
then, of course, about the upgrading the 25 megawatts,
whether there would be sufficient water for that.
COMMISSIONER NELSON:And tha t 's your
main issue in this matter.
MR. MILES:Of course.There's other
possibility Idaho Power Company could just blow up the
dam or let the water go down the river and preserve
the historical significance.
COMMISSIONER NELSON:I don't anticipate
that anybody's going to file advocating that position,
however.
MR. MILES:No, I don't either, but they
could build another plant upstream.
COMMISSIONER MILLER:All right.
COMMISSIONER NELSON:I think we reach
you.
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COMMISSIONER SWISHER:Mr. Chairman, I
do think you can accomodate Mr. Miles by simply giving
him an independent crack for his filing.I think all
parties would agree to that.
COMMISSIONER NELSON:Maybe we could
agree that if Mr. Miles does have further issues he
needs to keep, maybe we could give him an extension
upon request at the time he thinks that's a problem
and just address it if we've got until a hearing on
November 9th.
COMMISSIONER MILLER:I think that's a
good suggestion, Commissioner Nelson.
I think what we should do is approve the
schedule that's been proposed by the parties. If
Mr. Miles feels the necessity to file anything
additionally outside of the time limits agreed upon
here, he can request permission to do that and we will
review it at that time.Otherwise, from my point of
view, the schedule seems reasonable.
The only thing I might add is that if,
for some reason, a evidentiary hearing is required in
Swan Falls, perhaps another prehearing conference
would be appropriate in that case, but we'd just cross
that bridge when we come to it; or if any party feels
the necessity of one at some point down the track, we
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can always schedule those on pretty short notice. So,
if you feel a necessity for a prehearing conference in
either of the cases as we move through the schedule,
certainly feel free to request one.
So, the Commission will issue an order
con fir min g the s c h e d u 1 es in these two cas e s .
Having said that, is there anything else
that we should take up today?
MR. RIPLEY:Two things, Mr. Chairman.
COMMISSIONER MILLER:Mr. Ripley.
MR. RIPLEY:In the order -- and we
discussed and I think Mike just forgot it -- if you
could require that the statement of positions and the
requests for production of affirmation, et cetera, be
faxed to Idaho Power Company or be mailed to Idaho
Power Company by overnight mail, that would assist
us.
And secondly, might we anticipate that
the Commission would issue an order after receipt of
all of the statements of position to give some
guidance to the parties? I don't want to suggest that
you be committed to that, but is there that
possibility at least?
COMMISSIONER MILLER:Tha t had been my
contemplation.It's not -- obviously, we don't know
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exactly what's going to be in the position papers and
if they will provide us an adequate basis upon which
we think we could make definitive rulings, but I think
we'll try and do something worthwhile or dispositive,
or at least provide guidance after receipt of those.
We don't just take them in and say, "Thanks."We'll
try and do something.
MR. RIPLEY:Thank you.
COMMISSIONER MILLER:Mr. Tanner.
MR. TANNER:i'll be happy to Federal
Express my issue statement or statement of position to
the Company if they will, in turn, Federal Express
their direct testimony to me.
MR. RIPLEY: Sure.
MR. TANNER:It takes about six days to
get to Portland regular mail for some reason.
COMMISSIONER MILLER:All right, we'll
include, Mr. Gilmore, in the order an order that the
materials be transmitted by the fastest available
means or something 1 ike that.
MR. MILES:Would hand-delivered be just
as good, Mr. Chairman?
COMMISSIONER MILLER:That would be
fine, Mr. Miles.
COMMISSIONER SWISHER:Teton or Jackson
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COMMISSIONER MILLER:Delivered to you
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5 All right, anything else?I f not, we
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will recess this hearing and see you at the appointed
time s .
8 (The hearing adjourned at 11: 35
9 a . m. )
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AUTHENTICATION
This is to certify that the foregoing
proceedings held in the matter of the application of
Idaho Power Company for authority to rate base the
i n v est men t r e qu ire d for the reb u i 1 d 0 f the S wan Fa lIs
hydroelectric project, Case No. IPC-E-90-2, and in the
matter of the application of Idaho Power Company for a
certificate of public convenience and necessity for
the rate basing of the Milner hydroelectric project,
or in the alternative, a determination of exempt
status for the Milner hydroelectric project, Case No.
IPC-E-90-8, commencing on Wednesday, August 22,1990,
at the Commission Hearing Room, 472 West Washington,
Boise, Idaho, is a true and correct transcript of said
proceedings and the original thereof for the file of
the Commission.
Accuracy of all prefiled testimony as
originally submitted to this Reporter and incorporated
herein at the direction of the Commission is the sale
tiittUIU". '~\I\1 'ii#,r e spo n s ib ~\I ~ J ootA.fl-9e submi t t i ng pa rt i e s .
~.. L;~ ......00. ~If.. "'##~v .. °o'o(~ '"
(:(+O~::cJ-l:w! fldi. J7a~----
\ ~....~lTBL\ ...w~1fY ~~N'1J.~# ~ .00........ '~~"t t i fie d S h 0 r t han d Rep 0 r t e r"'#. -'1' b \n~~~~~ ~ 0 F \I~e g i s t ere d Pro f e s s ion a 1 Rep 0 r t e r
""iiiuaalt""
2 1
HEDRICK COURT REPORTING
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AUTHENTICATION