HomeMy WebLinkAbout20020506Rigby hearing.pdf
1 RIGBY, IDAHO, MONDAY, MAY 6, 2002, 7:30 P. M.
2
3
4 COMMISSIONER SMITH: Ladies and gentlemen,
5 I'd like to welcome you tonight to a public hearing in
6 Idaho Public Utilities Commission Case No. PAC-E-02-1,
7 further identified as in the matter of the application of
8 PacifiCorp dba Utah Power & Light Company for approval of
9 changes to its electric service schedules.
10 My name is Marsha Smith. I'm one of the
11 Commissioners on the Public Utilities Commission. On my
12 right is Commissioner Paul Kjellander who is also
13 president of the Commission, and on my left is
14 Commissioner Dennis Hansen. The three of us are the
15 Commission and the people who will be making the decision
16 in this matter.
17 I would like to recognize some special
18 guests that we have this evening, Senator Geddes,
19 Senator Frazier, Senator Hill, Senator Hawkins,
20 Representative Lake, Representative Lurcher and
21 Representative Langford. We welcome the legislative
22 attendance tonight at our hearing -- oh, Representative
23 Wheeler.
24 First, we'll take the appearances of the
25 parties in the case beginning with the Company.
13
CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 MR. FELL: My name is Jim Fell and I'm the
2 attorney for PacifiCorp.
3 MR. WOODBURY: Scott Woodbury, Deputy
4 Attorney General, for Commission Staff.
5 COMMISSIONER SMITH: And on behalf of the
6 Irrigation Pumpers.
7 MR. OLSEN: Eric Olsen on behalf of the
8 Idaho Irrigation Pumpers Association.
9 COMMISSIONER SMITH: And for Monsanto.
10 MR. BUDGE: Randy Budge on behalf of
11 Monsanto.
12 COMMISSIONER SMITH: Intervenor Shurtz?
13 MR. SHURTZ: Tim Shurtz on behalf of
14 pro se. I'll move up forward.
15 COMMISSIONER SMITH: Thank you very much.
16 The people who are identified as parties in this case
17 have the opportunity to ask questions of public witnesses
18 tonight, if they so choose and that's why we were
19 identifying them for you. The Commission is here tonight
20 to take public comment on the application of Utah Power &
21 Light. The Commission sits in a quasi judicial
22 capacity. That's why we have a court reporter here who
23 will take a verbatim transcript of everything that you
24 say and the testimony will be evidence in our record and
25 that we base our decision on the record that is made in
14
CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 the case, so that will be part of that record.
2 It's important because of the court
3 reporter that only one person speak at a time, so we have
4 to keep strict order. In fact, Commission sitting is
5 like being at a district court proceeding; therefore,
6 it's not appropriate to disrupt the proceeding by
7 speaking from the audience, by clapping or in any way
8 disturbing the proceeding. Another, I guess you'd say,
9 peculiarity of our procedure is that we're hear to listen
10 to your comments and your statements and there's really
11 no opportunity for you to ask questions during the
12 hearing.
13 When we take a break or when the hearing is
14 concluded, there are Company representatives, Staff
15 representatives, intervenors here, so if you have
16 questions of them, that is your opportunity to ask it,
17 but not while we're on the record, so if there are no
18 preliminary matters --
19 MR. FELL: We have none.
20 COMMISSIONER SMITH: -- that the parties
21 need to bring forward, I will explain the process. We
22 have a list of those who have signed up and would like to
23 testify and when I call your name, you'll come forward
24 and Commissioner Kjellander will ask you to raise your
25 right hand and swear you in and then you may take a seat
15
CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 at this mike so that everyone can hear your statement and
2 then we'll have our Staff attorney ask you to identify
3 yourself by stating your name, spelling your last name,
4 and giving your mailing address so we may have you
5 properly identified for the hearing.
6 With that, we'll start with our first
7 person, Mrs. Robert Lee.
8
9 QUINN LEE,
10 appearing as a public witness, having been first duly
11 sworn, testified as follows:
12
13 EXAMINATION
14
15 BY MR. WOODBURY:
16 Q Mrs. Lee, how are you? Could you please
17 state your full name?
18 A My name is Quinn Lee.
19 Q And what is your address?
20 A 1330 Barney Dairy Road, Rexburg, Idaho.
21 Q And are you a residential customer of
22 PacifiCorp?
23 A Yes.
24 Q Any other type of business or farm? Are
25 you any other type of customer?
16
CSB REPORTING LEE
Wilder, Idaho 83676 Public
1 A No. We're residential users, yes.
2 Q Thank you, you can give your statement.
3 A I am speaking on behalf of my husband,
4 former Senator Robert Lee and respectfully submit this
5 letter for the record. It's addressed to Marsha Smith,
6 Chairman, Idaho Public Utilities Commission, Boise,
7 Idaho. "Dear Madam Chairman: As a former state Senator
8 from Rexburg, Idaho, I was directly involved in the
9 Scottish Power negotiations that led to the PUC Order
10 freezing power rates until January 1st, 2002. It was
11 clearly understood that power rates were to be frozen
12 until January 1st, 2002, and that any extraordinary costs
13 from interest rate hikes, the merger, inflation, market
14 purchases, maintenance breakdowns or other factors were
15 to be absorbed entirely by Scottish Power.
16 During negotiations, these costs were never
17 discussed with me as being deferred costs to be assessed
18 against ratepayers, plus interest after the price
19 freeze. Assessing deferred charges, plus interest to the
20 ratepayers clearly cancels any benefit from a rate
21 freeze. There is no net economic benefit to ratepayers
22 from such a program. I find it hard to believe that the
23 PUC is now considering passing the rate freeze costs on
24 to ratepayers rather than requiring Scottish Power to
25 absorb them.
17
CSB REPORTING LEE
Wilder, Idaho 83676 Public
1 In addition, the PUC should refrain from
2 using the BPA exchange credits as an offset to these
3 deferred costs. The BPA exchange credit was a
4 hard-fought gain and should be used for the benefit of
5 ratepayers, not Scottish Power. Sincerely, Robert R.
6 Lee."
7 COMMISSIONER SMITH: Thank you. I'm
8 wondering, were you intending to leave the copy with me
9 so we can put it in our file?
10 THE WITNESS: Yes, this is your copy.
11 COMMISSIONER SMITH: Okay, great, thank
12 you.
13 THE WITNESS: Who's taking the copy?
14 COMMISSIONER SMITH: I guess we'll put Ron
15 in charge of that. Thank you. Let's see if there are
16 any questions.
17 MR. FELL: I think without Senator Lee here
18 that it doesn't make much sense, so we'll leave it as is.
19 COMMISSIONER SMITH: Thank you very much.
20 (The witness left the stand.)
21 COMMISSIONER SMITH: I missed one of our
22 legislators, Representative Raybould is also here.
23 Mr. Stanley Searle.
24
25
18
CSB REPORTING LEE
Wilder, Idaho 83676 Public
1 STANLEY C. SEARLE,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. WOODBURY:
8 Q Sir, could you please state your full name
9 and spell your last name?
10 A Stanley Curtis Searle, S-e-a-r-l-e.
11 Q And where do you reside, sir?
12 A 6267 South 55th West, Idaho Falls.
13 Q You may give your testimony.
14 A As a ratepayer, I guess I'm going to try to
15 do this, I'm not educated enough to really do this
16 appropriately, but after being through the workshop, I
17 found that my prepared statement probably wouldn't fit
18 because you outlawed some of the stuff I was going to
19 bring up, so I prepared a new one.
20 In the statement, Idaho Power, the
21 schedules you showed, Idaho Power had an increase of
22 23 percent in their rates due to the power surge.
23 PacifiCorp will still have over the year 2001,
24 PacifiCorp's rates were still higher during that same
25 period, yet the 23 percent is what's going to recover
19
CSB REPORTING SEARLE
Wilder, Idaho 83676 Public
1 Idaho Power's costs.
2 Mr. Lively also stated in the workshop that
3 the Hunter plant, if it had not gone down, that the rate
4 surcharge would have been significantly less; therefore,
5 as far as I'm concerned, the Hunter plant is still
6 figured in the 25 million. When asked specifically for
7 numbers, we, as usual, get no significant bottom line
8 number. It's something like it might be, it can be. Do
9 we have a rate thing that has been produced that shows
10 the public how they're coming up with these numbers? We
11 have from the Commission saying they've done several, but
12 none of them have been approved, so the public doesn't
13 have them, so we have nothing that we can use as public
14 to verify what they're doing.
15 The buy-back program that PacifiCorp
16 offered to the farmers was a program to help save money.
17 It was a very ill program, yet we were told in the
18 workshop a few minutes ago that due to the buy-back
19 program, they saved money, it helped save in the actual
20 cost. That program would have worked significantly
21 better if PacifiCorp would have got behind it. I
22 actually signed my contracts five days after the signing
23 deadline due to the fact that I had to make seven calls
24 to the Commission and numerous calls to the Idaho Pumpers
25 Association chairman in order to even get a contract in
20
CSB REPORTING SEARLE
Wilder, Idaho 83676 Public
1 my hand and the contract arrived three days late. That's
2 how well they ran the power buy-back program.
3 Now, for me who signed up on the power
4 buy-back program, I lost money due to the fact that I
5 couldn't raise crops, but I suppose we made money in the
6 buy-back program; so therefore, I'm supposed to get
7 compensated for it, but now I'm being asked to refinance
8 the losses, so the money I made is now going to be
9 recharged to my power bill and I'm going to get the
10 opportunity to repay what they gave me. It doesn't make
11 sense.
12 The farmers are being asked to stand behind
13 this thing and they're using our BPA credit and from what
14 I understood from the workshop, the BPA credit is owned
15 by the individual. It's not owned by the Power Company,
16 it's not owned by the PUC, it's not owned by the State of
17 Idaho, it's owned by the individual. PacifiCorp sent out
18 specific letters to each individual BPA owner and asked
19 them to sign off what they were eligible to receive under
20 the BPA credit program.
21 Now, if I'm found not eligible on certain
22 pumps, PacifiCorp is coming back to me to get the refund,
23 yet, you divvied out the BPA power credit to somebody
24 else, so I have to pay the percentage back that I never
25 got. There's a flaw in the system here with the BPA
21
CSB REPORTING SEARLE
Wilder, Idaho 83676 Public
1 credit when you don't give it to the people it belongs
2 to. You can't give something away and then turn around
3 and offer it to someone else and then get it back from
4 another guy which is what we're trying to do here.
5 I will be behind Senator Lee's remarks that
6 was made by his wife and I'll iterate a little bit more.
7 I was in attendance at those meetings and it's public
8 knowledge, you can go to the Post Register, you can go
9 anywhere on the eastern side of the state and you can
10 find written proof from the Company that they presented
11 that program as a rate freeze and that rates would not go
12 up but would actually come down due to this merger. Yet,
13 we as ratepayers strongly, and I'll suggest again
14 strongly, deny the Scottish buy-out.
15 We still knew it was a blackball that was
16 coming before us and yet, the Commission okayed it
17 stating -- I talked to Dennis Hansen,
18 Commissioner Hansen, I was in contact with him several
19 times during the Scottish buy-out and was given
20 information understanding that this buy-out would be a
21 rate freeze and at least for five years we would not see
22 a rate increase and, therefore, we made adjustments in
23 our power schedules. We budgeted, as farmers we
24 budgeted, those rates into our budgets and now we're
25 asked to rebudget for the upcoming years a new rate which
22
CSB REPORTING SEARLE
Wilder, Idaho 83676 Public
1 is causing us a financial burden.
2 Yet, during the same time that PacifiCorp
3 is asking for a rate increase due to unforeseen costs on
4 their side, the farming industry received substantial
5 losses. I received on my farming operation the biggest
6 loss I've ever received in 21 years of doing business in
7 1999 and year 2000 and that was due to low commodity
8 prices and selling my potatoes for a dollar. Do I have a
9 right due to the fact of unforeseen horrible potato
10 prices to go after lost income and tack it on to my
11 upcoming years? I don't and, therefore, I do not feel
12 that PacifiCorp has a right to go after lost income due
13 to unforeseen causes that they knew would be a problem.
14 I also -- I guess the last thing I'd like
15 to state is when the PUC gave permission to PacifiCorp to
16 recover costs, the public was not invited to give their
17 comment on the fact that it wasn't legal. That's all.
18 Thank you, Commissioners.
19 COMMISSIONER SMITH: Thank you. Let's see
20 if there are any questions.
21 MR. FELL: Thank you.
22
23
24
25
23
CSB REPORTING SEARLE
Wilder, Idaho 83676 Public
1 CROSS-EXAMINATION
2
3 BY MR. FELL:
4 Q Mr. Searle, was it your -- you seem to be
5 saying that regarding the merger, the rate moratorium
6 after the merger, the two-year rate increase moratorium,
7 you seem to be saying that the Company agreed to that,
8 that was the Company's proposal you were saying?
9 A The owners of the Company put an ad in the
10 Post Register. You can go back and get it and it pretty
11 well states that there would be a rate freeze and that
12 commercial customers would receive a 1.7 decrease over
13 the two years.
14 Q That was the merger credit you're talking
15 about?
16 A Yeah, but we just lost the merger credit
17 due to a rate increase.
18 Q Are you aware that the rate freeze concept
19 arose first in the Commission's Order, not in the
20 Company's case? That was a Commission-imposed term.
21 A I don't understand your question.
22 Q The two-year rate moratorium was imposed in
23 the Commission's Order, it was not volunteered by the
24 Company. The Commission was the one that imposed that.
25 A Right.
24
CSB REPORTING SEARLE (X)
Wilder, Idaho 83676 Public
1 Q It was not a negotiated term.
2 A Right.
3 Q So what meetings were you talking about
4 where you said that it's clear that everybody understood
5 that this was somehow an absolute freeze on everything?
6 A Through public newspaper. I mean, we have
7 to look here where the public gets their information. I
8 mean, I tried to get mine from the Commission here two
9 weeks ago and I was denied access because this is a
10 hearing and I can't talk to them; so therefore, the only
11 place I could get information during those hearings was
12 either in the public paper or here at the workshops and
13 the public hearings that they held and we held them
14 throughout the state, on this side of the state, and in
15 those public hearings, there was discussion concerning
16 whether this would be a rate freeze, the papers reported
17 it and they reported it as a rate freeze.
18 Q Was that after the Order or before the
19 Order was issued?
20 A That was during the hearings.
21 MR. FELL: No further questions.
22 COMMISSIONER SMITH: Are there questions by
23 any other parties? Commissioner Hansen.
24
25
25
CSB REPORTING SEARLE (X)
Wilder, Idaho 83676 Public
1 EXAMINATION
2
3 BY COMMISSIONER HANSEN:
4 Q Mr. Searle, I'd like to just kind of make
5 the record straight. I recall visiting with you on the
6 telephone a couple, three times, but I don't recall ever
7 saying to you or anyone that there would be a rate freeze
8 for five years, because No. 1, it was two years in the
9 Order, the rate moratorium, and I'd just like to -- I
10 thought I heard you say that I said five years.
11 A I probably did in the frustration here. I
12 probably got it wrote in the other thing as two.
13 Q But I did have a couple of questions. Did
14 I hear you correctly that PacifiCorp could not identify
15 the dollar value of the Hunter plant failure tonight; is
16 that what you said?
17 A Well, when asked, I don't think they came
18 to a firm conclusion -- how do I want to put this. In my
19 mind they did not.
20 Q Why is it so important for you to know that
21 amount?
22 A Because the Commission has decided that the
23 Hunter plant, losses due to the Hunter plant cannot be
24 recovered by PacifiCorp in this rate case. That's what I
25 understand. Now, that's what I've been told.
26
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 Q Could I just ask you, was that relayed to
2 you this evening, the last statement you mentioned?
3 A I was trying to remember whether I heard
4 them say anything about it tonight. It was relayed to me
5 through --
6 Q The Hunter plant failure is one of the
7 issues in this case, but it has not been decided by the
8 Commission, but I just wanted to know why you were so
9 concerned about the amount.
10 A Well, I think, I'm trying to remember in
11 the workshop, I've had too many things on my mind lately,
12 but it was stated that the Hunter failure, in the
13 workshop, that the Hunter failure was not -- was moved
14 out of the figure, the 11 million that was part of the
15 Hunter failure was not included in the rate case. Yet,
16 when asked how much of the Hunter failure was deducted,
17 no one could come up with a number and they kind of came
18 up with about 24 million that was deducted, but they
19 relayed that sum to contracts, not to the Hunter plant.
20 Q So is it your feelings or opinion that the
21 25 million that was agreed to in the stipulation does not
22 include any money for the Hunter failure?
23 A I have no idea how much it includes in
24 reality, I mean, because it's not a piece of paper that
25 you can really read. You've got the PUC saying, the
27
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 Commission people saying, that contracts was part of that
2 38 million and due to poor contracts, whatever, we
3 subtracted some. You have PacifiCorp stating that the
4 Hunter failure had some of it to do with it and due to
5 that, we pulled some of that or some of that was due to
6 that -- some of the cost increase was due to the Hunter
7 plant failure, but nowhere does it show contracts cost us
8 this much and that's why we're deducting this much,
9 Hunter plant failure was partially responsible, this is
10 the amount we have determined is allowable here. We have
11 no number.
12 Q And you're saying you feel that's very
13 important to you as the public to know that?
14 A We need to know why we're paying a rate
15 increase. We are being told there is no rate increase in
16 the sense that this is rate recovery, not a rate
17 increase. I mean, that's what they're laying it down to,
18 so if that's the case, how are we supposed to know that
19 as a public if we don't know where the expenses are
20 coming from?
21 COMMISSIONER HANSEN: Thank you very much.
22 COMMISSIONER SMITH: Commissioner
23 Kjellander.
24 COMMISSIONER KJELLANDER: Yes.
25
28
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 EXAMINATION
2
3 BY COMMISSIONER KJELLANDER:
4 Q First of all, thanks for your testimony and
5 I do have a question, but I wanted to get to one other
6 item first and I was just curious and I know that people
7 generally only have an opportunity to be able to access
8 information that may be printed in local publications and
9 I'm not trying to media bash as I move forward in this
10 question, so I guess I wanted to set that up as a
11 preface, but have you looked at the Order that was issued
12 on the merger as it related to the issue of the
13 moratorium?
14 A I have a copy of it.
15 Q Have you ever seen the word "freeze"
16 anywhere in that Order?
17 A No.
18 Q And the reason you don't is because in the
19 course of our deliberation, we wanted to avoid the word
20 "freeze" and there were two reasons for that. One is
21 freeze means rates can't change and the concern that we
22 had was that if there were issues like the BPA credit,
23 for example, that could have been negotiated during that
24 moratorium that could have been meant a reduction in
25 rates and you had actually implemented a freeze, you
29
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 might have boxed yourself in to the counter argument
2 that's being used by some in relationship to costs that
3 could have been incurred during that moratorium, so for
4 that reason, we avoided the word freeze and that was
5 actually a part of the transcript, I believe, even during
6 the technical hearings that were held, so one, I
7 appreciate that you've read that and thank you for your
8 response related to not seeing the word freeze in the
9 Order.
10 The second thing, though, with your
11 testimony, I have just a little bit of confusion, are you
12 getting a BPA credit?
13 A Yes.
14 Q And you haven't started pumping yet,
15 though; correct?
16 A Correct.
17 Q So you don't know how good or how bad it's
18 going to be. Are you anticipating it's going to be less
19 than you got when you were pumping?
20 A My BPA credit will be less?
21 Q Yes.
22 A It won't be the 40 percent, no. My bill
23 will not drop 40 percent.
24 Q But you are anticipating a reduction over
25 the last time that you pumped because you were on the
30
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 buy-back program last year?
2 A Yes.
3 Q Okay, I just wanted to get that clear.
4 Thank you.
5 A Can I clarify?
6 Q Sure.
7 A I think what I was trying to state there is
8 in the past, PacifiCorp has just kind of gave us the BPA
9 credits and they're well aware of it, they sent out
10 letters to everybody, put your John Henry on it to make
11 sure that you qualified for that credit. Simply because
12 that credit is so big now, they don't want to be held
13 liable for it, they want the farmer to be liable for it.
14 Because it's our credit, we are liable for it, and if you
15 haven't read the BPA stipulations that they put on a
16 farmer, you ought to go read them because there's a
17 zillion ways, just like PacifiCorp is getting out of this
18 rate increase deal, a farmer could lose the BPA credit
19 just over a technicality that he didn't quite do
20 something just perfect, and all of a sudden, if we've
21 been under service for a year-and-a-half and PacifiCorp
22 is no longer being awarded the credit, PacifiCorp is
23 going to come to me as the customer and demand the credit
24 back, but he's not going to demand the 32 or 34 percent
25 he gave me, he's going to demand 40 percent that BPA gave
31
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 me.
2 Q Thank you, and if you have an opportunity,
3 I think Randy Lobb has had some experience with the BPA
4 credit issues. Perhaps maybe we could put the two of you
5 together at a break because I think the issue you raised
6 about the possibility of losing the credit is a
7 significant enough one that if there's a problem in there
8 that we're not aware of that we'd certainly like to pay a
9 little bit more close attention to that and, Randy, could
10 you raise your hand so this gentleman knows who you are?
11 A I know him.
12 COMMISSIONER SMITH: And I guess I just
13 have to acknowledge that sometimes I share what I sense
14 as your frustration, because when you see the number
15 that's being proposed, you don't actually know what was
16 added or subtracted to get there and I think that's in
17 the nature of a settlement, because parties in their
18 negotiating process have arrived at a number that they
19 all feel is reasonable, but each one may have a different
20 basis in looking at the costs for why they feel that's
21 reasonable, so I think that's some of your frustration in
22 not seeing line by line what was added and subtracted.
23 THE WITNESS: May I respond?
24 COMMISSIONER SMITH: Certainly.
25 THE WITNESS: My frustration comes from a
32
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 1999 rate increase issue that was brought before a senate
2 committee which showed the rates of Idaho Power,
3 PacifiCorp, Avista and showed comparison rates of how we
4 compared the three rates and I got those from the PUC and
5 the funny part was if PacifiCorp had charged me the rates
6 on that piece of paper, I wouldn't have been to the
7 hearing, but the rates being charged to my bill were
8 significantly more by about two cents a kilowatt.
9 I questioned as we found in the workshop,
10 it depends on where you want to pull the numbers from and
11 if you pull them all from the right area, you succeed in
12 getting whatever rate you want. We learned that from
13 Enron. If you have the proper accounting purposes, you
14 can hide anything you want, but as a ratepayer, what is
15 important to me is the rate on the bill and that's what
16 I've got to go by is the rate on the bill.
17 COMMISSIONER SMITH: Thank you very much
18 for participating tonight.
19 (The witness left the stand.)
20 COMMISSIONER SMITH: Mr. Gilbert Dayley.
21
22
23
24
25
33
CSB REPORTING SEARLE (Com)
Wilder, Idaho 83676 Public
1 GILBERT DAYLEY,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. WOODBURY:
8 Q Mr. Dayley, would you please state your
9 full name and spell your last name?
10 A My name is Gilbert Dayley. Dayley is
11 D-a-y-l-e-y.
12 Q And what is your address, sir?
13 A 264 North 4000 East, Rigby, Idaho.
14 Q You can give your statement.
15 A Thank you. I apologize, I am not as well
16 qualified as the other bunch who have testified before
17 me. I'm simply a ratepayer that's very frustrated. I
18 noticed in how to give testimony, you requested the
19 testimony be not duplication of what has went before, but
20 that's going to be very difficult, at least, to not
21 allude to those things and I apologize for this.
22 My concern with this rate is that
23 $25 million is going to be taken from eastern Idaho's
24 economy, an economy that is critically short at this
25 time, because it's farming community in most ways, except
34
CSB REPORTING DAYLEY
Wilder, Idaho 83676 Public
1 for the INEEL site and the farming portion of the economy
2 is in trouble, as you've already heard, and I'm concerned
3 about that $25 million going out.
4 The 25 million, as I understand it, a
5 portion of that is coming from a BPA credit and a portion
6 of it is coming from -- I just lost the term, excuse
7 me -- from a merger credit that was agreed to be paid by
8 Scottish Power which will be eliminated. The BPA credit,
9 as I understand it, does belong to the ratepayer, to the
10 residential homeowner and to the small farmer. It does
11 not belong to Scottish Power. Scottish Power is a
12 vehicle by which it is credited back to the homeowner or
13 to the small farm user, and I'm concerned that in the
14 timing of this, in February of 2001, a release from the
15 Idaho Public Utilities Commission stated that Scottish
16 Power had approached them estimating that their costs
17 would be $8 million. In January of 2002, Scottish Power
18 asked for $38 million. There's a tremendous difference
19 between those figures.
20 Now, just coincidental that the Commission,
21 and we do very have much appreciate the Commission's work
22 in negotiating this BPA credit, had negotiated the BPA
23 credit and was about to make a release about two weeks
24 after Scottish Power made a presentation, I have to
25 assume that Scottish Power was well aware that the BPA
35
CSB REPORTING DAYLEY
Wilder, Idaho 83676 Public
1 credit was forthcoming before they made this request for
2 $38 million. I question very much that it was just
3 coincident that they raised it from 8 million to
4 38 million.
5 I am concerned as a ratepayer and as a
6 homeowner in this area that I was not notified of this
7 going on. It wouldn't take much to slip a flyer into a
8 utility bill to let a person know that Scottish Power was
9 after $38 million. I understand it was on the Internet,
10 but I didn't realize that until just the last few days
11 and I have accessed the Internet at that time to try and
12 come up to speed on what's going on.
13 I would respectfully request to the
14 Commission that they take a second look at this
15 stipulation and that they stop the stipulation and
16 re-review view the case, that they look at all the costs
17 incurred. In the workshop that was before this, I
18 listened to the answers that was given by PacifiCorp. I
19 found that I was not satisfied with the answers. I felt
20 it was very vague and did not really cover why these
21 costs were incurred, why they feel they should be
22 entitled to this kind of expenditure.
23 That's pretty well my testimony.
24 COMMISSIONER SMITH: Thank you very much.
25 Let's see if there are any questions.
36
CSB REPORTING DAYLEY
Wilder, Idaho 83676 Public
1 Commissioner Hansen.
2
3 EXAMINATION
4
5 BY COMMISSIONER HANSEN:
6 Q Mr. Dayley, I just had one question. Were
7 you surprised that the BPA credit was so large this year
8 to what it's been in the last year or the year before?
9 A I was very pleasantly surprised at this,
10 yes. I did not even realize it was coming until it
11 showed up on the February utility bill.
12 Q Are you yourself or have you talked to
13 other people that have been surprised to see the new
14 amount on their bill than the previous month or do you
15 think they were aware of how they arrived at that?
16 A I'm not sure. I think, like myself, most
17 of the general public is unaware really what happens.
18 They see the bill and they recognize that it's
19 considerably lower, but I have to tell you at times the
20 utilities don't always read the meter every month and you
21 might get a bill that's way off base from what it
22 normally is, so it wasn't really a big surprise the first
23 month, but when it came the second month, I looked at the
24 bill and compared it back and seen that it was a BPA
25 credit that was there.
37
CSB REPORTING DAYLEY (Com)
Wilder, Idaho 83676 Public
1 Q I was just kind of curious because I was
2 visiting my mother over in Grace this last week and she
3 said to me, "I've got to tell you, my electricity bill
4 was only $15.00," and she said, "I still turn on all the
5 lights and stuff"; so I was just kind of curious. She
6 was surprised and she didn't realize why her bill was
7 that low and I was just kind of curious if you felt
8 yourself as well as your associates realized how huge
9 that BPA credit is.
10 A Like I say, the first month I didn't
11 realize what it was. I thought it was just a bill that
12 had been sent out that hadn't been read, because
13 sometimes they take a previous month and take an average
14 off from it and don't really bill you correctly every
15 month, but the second month when I seen it, I did go and
16 check the bill to see why it was that low and it was a
17 very pleasant surprise. It allowed me the opportunity to
18 go out and do a few things that I would not normally be
19 able to do, buy an extra quart of ice cream and this type
20 of thing and I appreciated that very much.
21 COMMISSIONER HANSEN: Thank you.
22 COMMISSIONER SMITH: I think Mr. Shurtz has
23 some questions.
24
25
38
CSB REPORTING DAYLEY (Com)
Wilder, Idaho 83676 Public
1 CROSS-EXAMINATION
2
3 BY MR. SHURTZ:
4 Q Yes, Mr. Dayley, when you first saw that on
5 your bill and your perception, was your perception that
6 that was a rate decrease given to you by Utah Power and
7 since then has your perception in dealing with other
8 people as you interact, has that comment been made to you
9 that the Power Company did something right and lowered
10 your bill?
11 A No, that was never a consideration that
12 Utah Power had actually decreased the bill. I've never
13 seen that happen in my lifetime.
14 Q Okay, Mr. Dayley, but was there a lot of
15 confusion on where that came from?
16 A No, for me it wasn't because I read the
17 bill and it said BPA credit and I know what the
18 Bonneville Power Administration is. I'm aware of that
19 and I did understand that it was a credit and then as I
20 looked into this a little bit and became a little more
21 aware of what the BPA credit was, that's why I stated
22 that the BPA credit does belong to the power user, as I
23 understand it.
24 Q Okay, you also stated that you felt very
25 uninformed to these proceedings and things that were
39
CSB REPORTING DAYLEY (X)
Wilder, Idaho 83676 Public
1 happening, where did you get most of your information?
2 A Most of my information came from the
3 Internet. After I seen what was happening and I don't
4 even remember where for sure, but I did hear that there
5 was some concerns or a rate increase going to be coming
6 up, I went to the Internet and pulled up all the
7 information I could from the PUC site and it was very
8 helpful. It helped me considerably. I reviewed, I
9 think, almost everything on that site and I want to tell
10 you it's a good site, it gives good information and I
11 pulled up the information and I did review it right from
12 all the information I could get off there to become a
13 little more understanding. I did pull up the
14 stipulation, printed it off from the Internet site and I
15 printed up Commissioners Hansen's dissenting opinion and
16 I very much agreed with Commissioner Hansen's dissenting
17 opinion, and then I've looked at it a little bit more
18 since then, but I have not been satisfied in any way,
19 shape or form as to why PacifiCorp feels they should have
20 25 million of eastern Idaho ratepayers' money. I still
21 don't understand that.
22 MR. SHURTZ: Thank you.
23 COMMISSIONER SMITH: Mr. Woodbury.
24 MR. WOODBURY: Thank you.
25
40
CSB REPORTING DAYLEY (X)
Wilder, Idaho 83676 Public
1 CROSS-EXAMINATION
2
3 BY MR. WOODBURY:
4 Q Mr. Dayley, I had a couple of questions for
5 clarification on your comments earlier on and you
6 indicated that you were here during the workshop and
7 listened to the Company's presentation and I was
8 wondering, were you here also for Commission Staff's
9 presentation?
10 A I came in about 15 minutes late, so I'm not
11 exactly sure whether I was here. Randy was still
12 speaking when I came in.
13 Q And the question I'd like to ask you
14 involves your statement that you believe that the BPA
15 credit is being reduced and that the merger credit is
16 being eliminated and I guess you've read what's on the
17 Commission's web page and I'm wondering, is that your
18 belief that it's being -- I guess it's my understanding
19 in listening to Staff's presentation that the BPA credit
20 is not being reduced, but it's instead being offset by a
21 power cost surcharge and that the merger credit is not
22 being eliminated, but instead it's being accelerated in
23 order to provide a partial offset for that power cost
24 surcharge.
25 A I have read in the reports that I got off
41
CSB REPORTING DAYLEY (X)
Wilder, Idaho 83676 Public
1 from the web page that the merger credit was being
2 accelerated and I've got to tell you, I completely do not
3 understand that terminology or what's happening. To me,
4 as a user, it's just simply disappearing and when it
5 disappears, that means somebody is taking it because they
6 have promised to pay that out and when it disappears off
7 of my credit, off of my utility bill, it's gone, then
8 somebody is taking it.
9 Now, as far as your question with regard to
10 the BPA credit, maybe it's just timing and maybe it's
11 just semantics of words, but it doesn't really matter
12 which it is, a portion of that amount of money that has
13 been given to me now is being taken back away.
14 MR. WOODBURY: All right, thank you very
15 much.
16 COMMISSIONER SMITH: Thank you very much
17 for your testimony.
18 THE WITNESS: Thank you.
19 (The witness left the stand.)
20 COMMISSIONER SMITH: Senator Brent Hill.
21
22
23
24
25
42
CSB REPORTING DAYLEY (X)
Wilder, Idaho 83676 Public
1 H. BRENT HILL,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. WOODBURY:
8 Q Could you please state your name and spell
9 your last name for the record?
10 A H. Brent Hill, H-i-l-l.
11 Q And where do you reside, sir?
12 A 1010 South 2nd East, Rexburg, Idaho.
13 Q You may give your statement.
14 A I'm a customer of Utah Power, both
15 residentially and commercially.
16 Q Thank you.
17 A I appreciate the Commission allowing us to
18 have these hearings over here on the eastern side of the
19 state where so many of the PacifiCorp customers reside.
20 On July 27th, 1999, many people, probably some in this
21 room, gathered in Rexburg for a public hearing regarding
22 the buy-out of PacifiCorp by Scottish Power. We were
23 concerned, but it appeared that there were promises made
24 that we as customers would get better service and that
25 we'd have fewer rate increases.
43
CSB REPORTING HILL
Wilder, Idaho 83676 Public
1 According to what I read, stockholders were
2 given a bonus to okay the deal. I realize that the
3 Commission is bound by the actual written agreements of
4 the merger; however, we as ratepayers and as the public
5 are probably more acquainted with what was said in
6 hearings like the workshop we had for the last
7 hour-and-a-half. Those things were not under testimony,
8 but we took them as truth as they were spoken to us and
9 as different representatives, representative positions
10 from the power companies as well as from other
11 organizations.
12 In your instructions it said I wasn't
13 allowed to use hearsay. I'm not sure if the media is
14 considered hearsay, some of us might think so.
15 COMMISSIONER SMITH: We won't worry about
16 the Rules of Civil Procedure tonight. This is a public
17 hearing.
18 THE WITNESS: Oh, thank you very much.
19 Then I'll quote the media, if I may. If I may just read
20 one paragraph from the Idaho State Journal, it was dated
21 October 13th, 1999, it was after a meeting not much
22 unlike the one we had starting at 6:00 o'clock this
23 evening and the media reported that executives of both
24 utilities, I assume talking about Scottish Power and
25 PacifiCorp, made verbal commitments to legislators the
44
CSB REPORTING HILL
Wilder, Idaho 83676 Public
1 Glascoe Bay Scottish Power would not seek a rate increase
2 from its Idaho customers for three and probably up to
3 five years, said State Representative Golden Linford and
4 Senator Robert Lee, both Rexburg republicans.
5 I think this may be where some of the
6 confusion is coming from that Mr. Searle testified of and
7 so forth. I realize that is not what it says in the
8 actual merger agreement, but those were some of the
9 understandings and some of the spoken promises that were
10 made to the public at that time.
11 I guess the question comes up in some of
12 our minds, what is the purpose of a moratorium on rates
13 if the Power Company has the ability to recover any
14 losses they have after the moratorium is over, including
15 for the period that there was supposed to have been a
16 moratorium. PacifiCorp was in a good position to furnish
17 the power to its customers. Even with the loss of its
18 Hunter plant, it had more than enough power to meet its
19 obligations to Idaho ratepayers, as I understand it, but
20 PacifiCorp management had entered into other more
21 lucrative contracts to increase its return to its
22 stockholders.
23 As I understand it, stockholders stood to
24 realize some significant gains if these contracts came
25 through, because they were buying -- they had excess
45
CSB REPORTING HILL
Wilder, Idaho 83676 Public
1 power which they were selling on a very lucrative open
2 market at that time, but when the Utah facility went
3 down, so did the hope for some big profits there.
4 Now, I realize that public utilities aren't
5 governed or accounted for in the same way that private
6 businesses are. They don't have the same control over
7 their rates, they don't have -- they're governed somewhat
8 by this Commission as well as other commissions in other
9 states, but stockholders, not customers, should be forced
10 to pay for management's mistakes. To make the ratepayers
11 bear those losses gives management, in my opinion, no
12 incentive to be more careful in evaluating their risks
13 and their alternatives when they're trying to look for
14 big profits.
15 I'm sorry for the stockholders of
16 PacifiCorp. To tell you the truth, I'm sorry for a lot
17 of my clients' holdings in a lot of companies in the last
18 two years as far as what stock has been doing. I'm a CPA
19 and I'm a business consultant and I deal with hundreds of
20 businesses. None of them can simply increase the price
21 that they charge to their customers when things don't go
22 the way they planned.
23 It's no secret that farmers are struggling
24 right now. With low water supplies, they're probably
25 looking at even greater costs to pump where they may not
46
CSB REPORTING HILL
Wilder, Idaho 83676 Public
1 be able to pump out of the river but have got to pump
2 from deep wells. Household budgets are tight. $38
3 million for Idaho Power [sic] users is no small burden to
4 place on their backs, neither is 25 million or any other
5 number that is unjustly assessed.
6 I don't mean to preach to you and I
7 certainly don't remind you, but I say for the record that
8 your charge as a Commission under Idaho statute is to
9 ensure that "all rules and regulations made by the public
10 utility affecting or pertaining to its charges or service
11 to the public shall be just and reasonable." I submit to
12 you that the request of PacifiCorp to recover losses it
13 sustained during a mandated moratorium on rates is
14 neither just nor equitable and I stand for questions.
15 COMMISSIONER SMITH: Any questions?
16 Mr. Fell.
17 MR. FELL: Thank you.
18
19 CROSS-EXAMINATION
20
21 BY MR. FELL:
22 Q Senator Hill, I assume you've read all the
23 newspaper reports over the last year-and-a-half about all
24 of these high power prices in the West?
25 A I'm sure I haven't read all of them, no.
47
CSB REPORTING HILL (X)
Wilder, Idaho 83676 Public
1 Q But you've read some of them?
2 A I've read some of them.
3 Q You're aware of the high prices that have
4 been prevailing throughout the West?
5 A Certainly.
6 Q You're not saying that PacifiCorp had some
7 ability to avoid those high power prices when it was
8 buying power, you're not saying that, are you?
9 A No, sir.
10 Q And, of course, I assume you understand,
11 too, that they were required to buy the power to serve
12 the load?
13 A They had some control over the load, but
14 they had to buy power to meet their contractual
15 obligations, yes, sir.
16 Q Now, would you agree that Bonneville Power
17 Administration was facing the same market if they had to
18 go out and buy power?
19 A Certainly.
20 Q Do you agree with the statements you've
21 heard or -- well, do you agree with the statements you've
22 heard that the large size of the Bonneville credit is due
23 in significant measure to the high power prices that they
24 were avoiding?
25 A I agree with those statements. I don't
48
CSB REPORTING HILL (X)
Wilder, Idaho 83676 Public
1 necessarily know what that has to do with the deferred
2 costs that PacifiCorp is trying to recover. I think they
3 are two separate issues and I think your effort to try to
4 combine those issues are unjustified. I think they
5 happen to be calculated based on some of the same
6 circumstances.
7 Q Yes.
8 A And I will agree with that, but the fact
9 that you're trying or if that's what you're trying to do,
10 justify the rate increases because customers are getting
11 a bigger rebate from Bonneville Power, I don't buy that,
12 no, sir.
13 Q I'm not saying that they're trying to take
14 away some of the Bonneville increase, but the cause of
15 the Bonneville increase was the same as the cause of the
16 excess power costs.
17 A That is true. Some of the same
18 circumstances caused both independent circumstances.
19 MR. FELL: Thank you.
20 MR. WOODBURY: I have no questions.
21 COMMISSIONER SMITH: Mr. Shurtz.
22
23
24
25
49
CSB REPORTING HILL (X)
Wilder, Idaho 83676 Public
1 CROSS-EXAMINATION
2
3 BY MR. SHURTZ:
4 Q Senator Hill.
5 A Mr. Shurtz.
6 Q In your reading, we're going back a little
7 bit, of when we were told of the rate -- when you were
8 told of the rate moratorium put in the Commission Order
9 and also what you read in the papers, did you believe in
10 your mind that a rate moratorium meant that for two years
11 we were exempt or did you believe that we would have a
12 deferral of costs sometime down the road?
13 A I guess as I look at the word moratorium,
14 as I read it in the dictionary, it means to cease
15 something or stop something. I never suspected that
16 those same costs that we were deferring would later be
17 recovered by the utility, no, I did not understand it as
18 that.
19 Q Also, did you in your mind as you believe
20 now, do you believe due to what you've read, in your
21 interaction with the other legislators concerning this
22 issue and also your constituents, do you believe in your
23 mind and in the public's mind that rate moratorium was,
24 meant a valid rate freeze or we don't want to use rate
25 freeze, but a non-accounting of costs during that two
50
CSB REPORTING HILL (X)
Wilder, Idaho 83676 Public
1 years?
2 A I believe that probably many of the public
3 perceived it that way. Whether that was correct or not,
4 that's for the Commission to decide.
5 MR. SHURTZ: Thank you.
6 COMMISSIONER SMITH: Questions from the
7 Commission? Commissioner Hansen.
8
9 EXAMINATION
10
11 BY COMMISSIONER HANSEN:
12 Q Senator Hill, you mentioned that you've had
13 some experience dealing with companies and their earnings
14 and so forth and I'm just kind of curious, as you're
15 probably aware, the law provides that a regulated utility
16 is entitled to a fair rate of return and I'm just kind of
17 curious, do you have an opinion on what that fair rate of
18 return range should be, four to 12 or 15 percent, because
19 you mentioned at these times you didn't feel like, I got
20 the impression, that a company should be earning a
21 certain rate of return, I was just kind of curious, do
22 you have an opinion on that?
23 A No, I don't have an opinion on that,
24 Commissioner Hansen, because even though I think they're
25 entitled to a fair rate of return, fair rates of return
51
CSB REPORTING HILL (Com)
Wilder, Idaho 83676 Public
1 fluctuate with the economy. What is a fair return on my
2 portfolio this year certainly may be different than what
3 it was three years ago. Certainly the stockholders of
4 Utah Power or PacifiCorp probably aren't expecting the
5 same return as they received at different times over the
6 years. For the Commission or anyone else to guarantee
7 those returns by going back to the ratepayers to demand
8 those returns for the stockholders seems inappropriate to
9 me.
10 COMMISSIONER HANSEN: Thank you.
11 COMMISSIONER SMITH: Thank you, Senator,
12 very much.
13 THE WITNESS: Thank you very much.
14 (The witness left the stand.)
15 COMMISSIONER SMITH: Mr. Mark Mickelsen.
16
17 MARK MICKELSEN,
18 appearing as a public witness, having been first duly
19 sworn, testified as follows:
20
21 EXAMINATION
22
23 BY MR. WOODBURY:
24 Q Mr. Mickelsen, will you please state your
25 full name and spell your last name for the record?
52
CSB REPORTING MICKELSEN
Wilder, Idaho 83676 Public
1 A My name is Mark Mickelsen,
2 M-i-c-k-e-l-s-e-n.
3 Q Where do you reside, sir?
4 A I reside at 1050 West Riverview Drive,
5 Idaho Falls.
6 Q You may give your statement.
7 A Okay. I am a farmer, also a residential
8 customer. I'm also vice president of the Idaho
9 Irrigation Pumpers Association and probably speak, I
10 guess, from two different hats with the same idea. I
11 agree with what has been said about the excess power
12 costs. I really don't think that we should have to pay
13 them; however, the Commission has the original
14 agreement. The Commission has decided two to one to
15 accept the 25 million, as I understand. I think that's
16 the way it is and I spent a lot of time with our attorney
17 Eric Olsen on the phone as well as in meetings with him
18 discussing different options with Utah Power & Light or
19 whoever they are and through all of our discussion,
20 especially if we are responsible for the excess power
21 costs, I agreed with the stipulated settlement.
22 Personally, we have about 8,000 horsepower
23 supplied by Utah Power & Light. Because these farms are
24 contiguous and because we don't have a lot of different
25 businesses, we don't receive near all of the BPA credit
53
CSB REPORTING MICKELSEN
Wilder, Idaho 83676 Public
1 that we could possibly receive. As I've studied the
2 rates for our farm, we will probably see about a seven to
3 eleven percent increase in our power costs taking into
4 account that we will not be able to benefit from all of
5 the BPA credit that smaller farms may be able to do so,
6 so I guess in conclusion, I agree with the stipulated
7 agreement.
8 COMMISSIONER SMITH: Thank you. Let's see
9 if there are any questions.
10 Mr. Woodbury.
11 MR. WOODBURY: Yes, thank you.
12
13 CROSS-EXAMINATION
14
15 BY MR. WOODBURY:
16 Q Mr. Mickelsen, just by way of
17 clarification, the Commission has not yet accepted the
18 stipulation. We've presented it to it and the Commission
19 is holding hearings taking public comment and a technical
20 hearing tomorrow and still may reject that stipulation.
21 A However, the Commission did, if -- let me
22 ask if this is true, the Commission ruled two to one that
23 recovery of the excess power costs was not prohibited by
24 the Commission's merger Order; is that correct?
25 COMMISSIONER KJELLANDER: That is correct.
54
CSB REPORTING MICKELSEN (X)
Wilder, Idaho 83676 Public
1 We said it wasn't prohibited by that condition, but that
2 was not approval of that amount. We merely said it that
3 wouldn't be just thrown off the table as a result of that
4 condition, so that's still on the table.
5 THE WITNESS: Well, that being on the
6 table, I still disagree. I agree with much of what has
7 been said here, that we'd rather not pay the 25 million
8 or the 22.7 million or whatever it may be.
9 COMMISSIONER SMITH: You'd rather not pay;
10 right?
11 THE WITNESS: We'd rather not; however, the
12 other agreements that have come up we agree with, so
13 that's my statement.
14 COMMISSIONER SMITH: Well, we appreciate
15 the participation of the Pumpers in the settlement
16 negotiation because you're a very important party.
17 Commissioner Hansen.
18 COMMISSIONER HANSEN: I just had one
19 question I'd like to have you clarify.
20
21 EXAMINATION
22
23 BY COMMISSIONER HANSEN:
24 Q You mentioned that you're calculating you'd
25 have a seven to eleven percent increase in rates this
55
CSB REPORTING MICKELSEN (Com)
Wilder, Idaho 83676 Public
1 year; is that correct?
2 A That is correct.
3 Q Is that with approval of the 25 million
4 deferral?
5 A That is with approval of the 22.7.
6 Q Right.
7 A And it is with the RMA, the adjustment to
8 everyone to try to bring everybody's rates a little
9 closer to where they ought to be. With the BPA credit
10 that we would be receiving, our farm would be about a
11 seven to eleven percent increase.
12 COMMISSIONER HANSEN: Thank you. I just
13 wanted to clarify that.
14 COMMISSIONER SMITH: We thank you very much
15 for your testimony.
16 (The witness left the stand.)
17 COMMISSIONER SMITH: That is the end of the
18 list of persons that had previously signed up to testify;
19 however, if there is anyone in the audience who wishes to
20 make a statement, we'd be happy to hear from you now.
21 Yes, sir, Representative Raybould.
22
23
24
25
56
CSB REPORTING MICKELSEN (Com)
Wilder, Idaho 83676 Public
1 DALE RAYBOULD,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 EXAMINATION
6
7 BY MR. WOODBURY:
8 Q Would you please state your full name and
9 spell your last name?
10 A My name is Dale Raybould, R-a-y-b-o-u-l-d.
11 Q Where do you reside, sir?
12 A I reside at 3215 North 2000 West in
13 Rexburg.
14 Q Thank you. You can give your comments.
15 A Honorable Commissioners, I thought after
16 listening to the statements that were made here tonight
17 and some of the things that were said here as having come
18 from the newspaper articles and hearsay, so to speak,
19 that maybe I should make a statement that might clarify
20 just a little bit of the background of this two-year
21 so-called moratorium or freeze or whatever about that.
22 About three years ago, and in fact, as much
23 as Representative Linford who was a party to these
24 agreements and you've heard he's not here, he's in
25 California and couldn't come here and you've heard the
57
CSB REPORTING RAYBOULD
Wilder, Idaho 83676 Public
1 statement by Mrs. Lee, the letter from Senator Lee, I was
2 also in a meeting that laid some background for this.
3 Representative Linford invited Senator Lee, Allen
4 Richardson from Scottish Power and Russ Westerberg and
5 myself and our wives up to his cabin in Island Park for
6 dinner and to discuss this Scottish Power buy-out of
7 PacifiCorp, and it was right at the time that things were
8 getting critical as to whether or not Idaho would go
9 along with this buy-out and Mr. Richardson and
10 Senator Lee, Representative Linford and I had quite a
11 discussion about what would happen to the Idaho
12 ratepayers if this merger were to take place, and the
13 crux of the thing was that we didn't talk about a freeze,
14 we didn't talk about a moratorium, the words that were
15 used in that meeting that night was that there would not
16 be a rate increase for three years and possibly five
17 years.
18 Mr. Richardson said I'm not going to make
19 that five-year thing a solid thing, but he says as we see
20 it now, there probably won't be a rate increase or a
21 request for a rate increase for five years. Now, here
22 again, nothing was solid on that, but he did say for
23 three years. We talked about whether or not the
24 ratepayers would go along with that Scottish Power
25 buy-out under those conditions and, of course, we all
58
CSB REPORTING RAYBOULD
Wilder, Idaho 83676 Public
1 felt like they would if those conditions were met.
2 Now, one other thing and it wasn't
3 discussed at that meeting that night, but I would like to
4 add here, and that is that the Power Company did receive
5 a rather substantial amount of power available to them
6 from irrigators this past year by exercising their option
7 to shut off irrigators that were on the C rate and that
8 power was probably marketed or at least took the place of
9 a large amount of power that had to be purchased because
10 of the Hunter failure and being able to market that at
11 real high prices. I don't know whether that's been
12 entered into in any of your deliberations or not, but I
13 think that's something that should be taken into
14 consideration, that had they not marketed that power
15 elsewhere, those irrigators on the C rate would not have
16 been curtailed as much as they were, but I just thought
17 I'd give you a little background about where some of this
18 testimony has come from concerning the rate, not a
19 freeze, but no increase in rates and it was pretty well
20 decided with Mr. Richardson himself making that offer at
21 that meeting that night in Island Park.
22 COMMISSIONER SMITH: Thank you,
23 Representative. Are there questions?
24 Mr. Fell.
25
59
CSB REPORTING RAYBOULD
Wilder, Idaho 83676 Public
1 CROSS-EXAMINATION
2
3 BY MR. FELL:
4 Q Representative Raybould, were you here for
5 the workshop before this public meeting? There was a
6 workshop before this session started.
7 A I understand that. No, I was not there;
8 however, I did attend a hearing in Boise last, when was
9 it in, February, I believe, and the background was pretty
10 well laid and I was busy tonight and I couldn't make it
11 to that meeting.
12 Q It's understandable. I just wanted to
13 clarify, then, that both the Staff and the PacifiCorp
14 representative explained how the curtailment program was
15 taken into account in avoiding power purchases and that
16 it was reflected in the cost numbers. Thank you.
17 A The reason and, sir, the reason I brought
18 that up is I have had a number of irrigators tell me that
19 they felt like PacifiCorp did real well on the power they
20 saved from the irrigators that were curtailed under the
21 C rate.
22 MR. FELL: Thank you.
23 COMMISSIONER SMITH: Any questions? Thank
24 you very much, Representative, for your testimony.
25 THE WITNESS: Thank you, Chairman Smith.
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CSB REPORTING RAYBOULD (X)
Wilder, Idaho 83676 Public
1 (The witness left the stand.)
2 COMMISSIONER SMITH: Anyone else? It looks
3 like this brings us to the close of tonight's hearing.
4 There's one thing I neglected to do earlier. Is Mrs. Lee
5 still in the audience?
6 MRS. LEE: Yes.
7 COMMISSIONER SMITH: I neglected to say,
8 would you please give our warmest regards to Senator
9 Lee? And while many times he and I didn't agree on
10 things, it was always a pleasure to work him. If you'd
11 please give him our regards, I'd appreciate it.
12 MRS. LEE: I certainly will.
13 COMMISSIONER SMITH: We were going to
14 announce that if you did not make a statement tonight and
15 something occurs to you, you have the opportunity to send
16 written comments to the Commission and we were trying to
17 figure out the date which Senator Geddes says is May 10th
18 and we'll --
19 SENATOR GEDDES: That's what was announced
20 in the workshop.
21 COMMISSIONER SMITH: Thank you, then that
22 has to be right. We will adjourn tonight's hearing and
23 we will reconvene at 1:00 p.m. tomorrow in Preston,
24 Idaho, for the technical hearing followed tomorrow night
25 by another public workshop and public hearing.
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CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 We thank you all very much for your
2 attendance.
3 (The Hearing recessed at 8:50 p.m.)
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CSB REPORTING COLLOQUY
Wilder, Idaho 83676