20071119Rigby.pdf

ORIGINAL.BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE FILING BY )
PACIFICORP DBA ROCKY MOUNTAIN ) CASE NO.PAC-E-07-05
POWER FOR AUTHORITY TO INCREASE )
ITS RATES FOR ELECTRIC SERVICE )
TO ELECTIC CUSTOMERS IN THE STATE)OF IDAHO )
)
HEARING BEFORE
COMMISSIONER MACK REDFORD (Presiding)
COMMISSIONER JIM KEMPTON
COMMISSIONER MARSHA H. SMITH
Place: Jefferson County Courthouse
2 1 0 Courthouse Way
Hearing Room
Rigby, Idaho.Date: October 30, 2007
POST OFFICE BOX 578
BOISE. IDAHO 83701
20-336-9208.HEDRICK
COURT REPORTING
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APPEARANCES
For the Staff:
For Rocky Mountain Power:
For the Intervenor:
OFFICE OF ATTORNEY GENERAL
Neil Price, Esquire
Deputy Attorney General
472 W. Washington Street
Boise, Idaho 83720
JUSTIN BROWN, Esquire
201 South Main Street
Suite 2300
Salt Lake City, Utah 89411
KEVIN HOMER, Esquire
Post Office Box 51015
Idaho Falls, Idaho 83405
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PROCEEDINGS
OCTOBER 30, 2007
MR. REDFORD: This will be hearing a hearing
by the Public Utilities Commission in the matter of the rate
case filed by Pacific Power -- or Rocky Mountain Power, who is
the electrical provider in this part of Idaho.
The time is seven 0' clock on October 30th. And we're
meeting in the Jefferson County Courthouse. And my name is Mack
Redford. And I would like to introduce you to the other
commissioners. They are Marsha Smith and Jim Kemp. We three
make up the Idaho Public Utili ties Commission.
I would like to tell you a little bit about what's
going to go here tonight so it might make it little bit easier
for you. If you didn't have a chance to or want to review some
of the information regarding this rate case, which has been left
on tables out -- just outside the door here, feel free to do so.
I'm sorry they haven't been here longer, but there were public
hearings or public workshops I believe in Rexburg and Soda
Springs previously where folks would have an opportunity to ask
questions and discuss the matter with not only Rocky Mountain
Power, but also with the Idaho Public Utilities staff.
A little bit more instruction, this is a proceeding
where we take testimony under oath on the record. It will be
recorded by the court reporter, Holly. And there will be a
transcript available if it is transcribed. Sometimes it is,
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sometimes it isn't.
COMMISSIONER SMITH: It always is.
COMMISSIONER REDFORD: It always is. Excuse me.
I'm fairly new on the Commission, so Marsha will correct me as
need be.
So we -- when we take your testimony, we would like to have
you come up and staiid at the podium if you would. And once the
testimony -- you have finished your testimony or even during
some of the testimony, the Commissioners might ask you some
questions, clarifying questions; or if we don't understand
something that you are saying, might ask you to clarify that.
At the conclusion of your testimony then the staff lawyer
for the Idaho Public Utili ties Commission may ask you some
questions as well as the attorney for Rocky Mountain Power~
At this time I would like to take the appearances of the
counsel, if you could do so.
MR. PRICE: My name is Neal Price. I represent
the Commission staff.
MR. BROWN: My name is Justin Brown. I'm an
attorney with Rocky Mountain Power.
INTERVENOR: Commissioner, I have my attorney
here. I'm the intervenor.
COMMISSIONER REDFORD: Okay.
INTERVENOR: We will be permitted to also
question, will we not?
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COMMISSIONER REDFORD: And--
MR. HOMER: I'm Kevin Homer.I'm the attorney
for Tim Shultz, who is an intervener.
COMMISSIONER REDFORD: What is your name again,
sir?
MR. HOMER: Kevin Homer, H-O-M-E-R.
COMMISSIONER REDFORD: Okay. And at this hearing
the public is invited to give testimony. And we had a sign up
sheet. And as I call your name, you will have -- we request
that you come up to the podium. Commissioner Kemp will take
your oath -- or Commissioner Smith will take your oath and you
will be free to make your comments as you see fit. So I will
call the first witness.
Am I doing okay?
COMMISSIONER SMITH: You are doing great.
COMMISSIONER REDFORD: Russell Spain.
RUSSELL SPAIN was first duly sworn
MR. PRICE: Mr. Spain, could you please say your
name and spell it for the court reporter as well as your
address.
MR. SPAIN: Certainly.
My name is Russell Spain, R-U-S-S-E-L-L, S-P-A-I-N. 2792
Barns Way, Idaho Falls 83401.
MR.. PRICE: And are you a customer of Rocky
Mountain Power?
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MR. SPAIN: Yes, I am.
MR. PRICE: Thank you.
COMMISSIONER REDFORD: Please proceed, sir.
MR. SPAIN: My name is Russell Spain, and I am a
executi ve director of Eastern Idaho Community Action Partnership
in Idaho Falls. Our agency serves the nine-county Eastern Idaho
region with services that includes the Low Income Heating Energy
Assistance Program or LIHEAP and weatherization programs among
others to help low income individuals in our area become
self-sufficient and independent. In the 2006 program year, our
agency helped 712 Rocky Mountain Power households with energy
assistance with a total outlay of $253,886.
Under the Rocky Mountain Power Lend-a-Hand Program, which
should be a model for all Idaho utili ties, we served a 53
households at a total cost of $8,587.00.
Low income households in Eastern Idaho fit the state and
national norm. They are not the product of mismanagement, over
consumption of luxury items, or other stereotype flaws. It is
just a matter of the available household financial resources are
not sufficient to meet financial obligations associated with
obtaining basic human needs. Because they are stretching their
limited financial resources to pay for housing, utility service,
heal thcare, and food, the balancing act they perform inevitably
leads to underpayment of bills and sometimes foregoing necessary
goods and services to the detriment of health and safety.
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Because of these issues, our agency supports testimony you
have already received from Terry Autens of the Community Action
Partnership Association of Idaho and John Kovat of the National
Consumer Law Center. Their testimony regards the companies
proposed changes to Regulation 10, specifically adding language
to Regulation 10R.8 that would specify that individual customers
will be responsible for, quote, any reasonable costs associated
with the collection of unpaid accounts including but not limited
to court costs, attorney fees, and other collection agency fees,
end quote. The perspective collection changes would increase
the likelihood that low income households would suffer
protracted loss of necessary service. It is very possible that
the, quote, reasonable, unquote, fees and costs could actually
exceed the total amount of the arrearage.
Eastern Idaho Community Action Partnership, as advocates
for the low income individuals in this region, categorically
proposes the addition of language to regulation 10R. 8. A
combination of the loss of the BPA credit this summer, this
proposed increase and proposed language in Regulation 10R.8 may
be the catalyst for keeping the low income in a poverty
si tuation for a much longer period of time. The addition would
put a further burden on the limited financial resources of the
low income and would potentially extend the length of time
customers are without the energy supply needed to maintain a
heal thy living environment for themselves and their families.
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Thank you for the opportunity.
COMMISSIONER REDFORD: Thank you. You may step
3 down.
4 Are there any questions from attorneys?
5 MR. PRICE: I have no questions.
6 COMMISSIONER REDFORD: Sir, Thank you very much.
7 The next person Lynn Young.
8 LYNN YOUNG was duly sworn.
9 MS. YOUNG: Thank you for this opportunity to
10 speak.
11 COMMISSIONER REDFORD: Just a second. We need to
12 have our attorney --
MR. PRICE: Would you, please state your name and'
spell it as well as your address.
15 MS. YOUNG: Yes, I will. My name is Lynn Young.
16 First name, L-Y-N-N, last name Y-O-U-N-G, 2786 South Denali
17 Place, D~E-N-A-L-I, Place, Meridian, Idaho 83642.
18 MR. PRICE: And are you a customer of Rocky
19 Mountain Power?
20 MS. YOUNG: I am not.
21 MR. PRICE: Thank you.
22 MS. YOUNG: Thank you for the opportunity to
23 speak today. I am here appearing here today on behalf of AARP
24 in its more than 180,000 members in Idaho. Many of them are
Rocky Mountain Power customers.
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AARP would like to make three recommendations to the PUC
regarding this case. Recommendation No. 1 is to rej ect Rocky
Mountain Power's proposed rate increase. No. 2 is to rej ect
their proposal to charge individual customers for collection
costs. And No. 3 is to rej ect their proposal to increase fees
for reconnection of service.
And I would like to take just a moment and give you some
reasons why we feel this way.Rocky Mountain Power is proposing
a rate increase of 6.7 percent or about $5.56 per month for
residential customers. The PUC staff is recommending a more
modest increase 3.42% based on their review and recommendations
regarding Rocky Mountain's revenue requirement. Ensuring
consumers, especially low income and seniors have access to
affordable energy is a top priority to for AARP.Energy is
unaffordable when consumers on limited incomes are forced to
choose between using energy for basic heating and cooling and
other necessities such as food and medication.
According to the Bureau of Labor Statistics Consumers
Expendi ture survey, older Americans consume about the same
amount of electricity as younger people do, but they devote a
larger percentage of their total spending to energy costs. And
aithough. five dollars a month may not seem like a lot to many,
to some it means -- and if may be many in that category, it
means a skipped meal or a prescription not picked up. We
encourage the PUC to rej ect Rocky Mountain's proposal and
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carefully consider the al ternati ve offered by staff.
Our. Recommendation 2 regarding the charge to individual
customers for collection costs, Rocky Mountain Power is asking
the commission to allow them to charge individual customers the
costs for collection of unpaid accounts. These costs include
attorney fees, court costs, and other collection agency fees.
AARP Idaho agrees with the PUC staff and the Community Action
Partnership Association that this proposal should be rejected.
A disproportionate number of those affected because they end up
in payment trouble would be low-income customers. An additional
concern is the way the proposal is written. There are no
controls on the level of the collection costs and fees charged
to an individual customer. So the company could and would be
able to incur and pass along costs that it might otherwise try
to avoid under the traditional ratemaking approach. The new
credit and collection costs are in addition to existing security
costs, late payment fees, and reconnect ion fees, which also
Rocky Mountain Power is as king for an increase to.
In 2006 Rocky Mountain reported that fees paid to
collection agencies total about $24,000, which is less than two
one-hundredths of one percent of base revenues. So that means
that shifting these costs on individual customers would have no
percei vable impact on lowering rates for other customers a month
yet the impact on the individuals who are already in a budget
crisis would be significant and possibly keep them from getting
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service restored at all. Adding to the burdens of people who
aren't able to pay their bills on time doesn't make sense. An
al ternati ve solution should be explored. AARP Idaho urges Idaho
Public Utility Commissioners to deny this request.
The third recommendation that we had regards Rocky Mountain
Power's proposal to increase fees for reconnect ion of service.
They are proposing to make it a little more difficult and more
costly for consumers to get reconnected after a disconnection.
The company's proposing to increase reconnect ion fees from 25 to
30 dollars during normal business hours and to double the
charges from 50 to 100 dollars for after-hour services.
After-hour services are currently provided from 4 p. m. to 7 p. m.
The company also seeks to reduce the hours during which
after-hour services are available. AARP agrees that staff this
should be rej ected for the same reasons as the collection
proposal. It will disproportionately impact lower-income
households and make it more difficult for them to restore
service.
Finally, AARP joins with the Community Action Partnership
Association of Idaho in supporting a low-income energy
assistance program for Rocky Mountain Power. This has been
propose by the Community Action Partnership Association. We
agree that some type of energy assistance program is needed and
is a better alternative dealing with payment trouble than
increasing fees or charging new fees to those who are already in
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arrears. Data from the 2000 census shows that more than 21,000
Idaho households live with incomes of less than 50 percent of
the federal poverty rate. And recent research based on 2005
energy places estimated these pay a whopping 35 percent of their
income on energy bills. Existing sources of energy assistance
are not sufficient to meet the needs in Idaho. The Federal Low
Income Home Energy Assistance Program allocation for Idaho falls
far short of serving the eligible households in our state. AARP
would like to work with the Commission and other parties to
increase energy, affordability, and energy assistance in our
state.
Thank you.
MR. PRICE: Any questions from counsel?
No.
No questions, thanks.
COMMISSIONER REDFORD: Thank you very much.
Delray Holmes.
MR. HOLMS: Commissioner, I will defer my time to
someone else. Thank you very much.
COMMISSIONER REDFORD: Lynn Tominaga.
MR. TOMINAGA: Would it be okay to substitute
Mark Mickelson in?
COMMISSIONER REDFORD: Sure.
(Off the record.)
MR. TOMINAGA: My name is Lynn Tominaga, L-Y-N-N.
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Tominaga is spelled T as in Tom - T-O-M-I-N-A-G-A. My address
is P.O. Box 2624, Boise Idaho 83701. My physical address is
1109 West Main, Suite 300, Boise, Idaho.I am the executive
director of the Idaho Irrigation Pumpers Association. We are a
voluntary group of
COMMISSIONER REDFORD: Hang on just a second.
LYNN TOMINAGA was duly sworn.
COMMISSIONER REDFORD: Just a couple of
questions.
Have you filed prefiled testimony?
MR. TOMINAGA: No, I have not.
COMMISSIONER REDFORD: So you don't intend to be
a witness?
MR. TOMINAGA: No, I do not.
COMMISSIONER REDFORD: Okay, go ahead.
MR. TOMINAGA: What I would like to do is enter
into the record a summary of the proposed testimony for the
Commissioners and for this public hearing. It i s just a short
summary some of our technical information that we're planning on
providing at the technical hearing for next week. I'm only here
to enter that information but also try and emphasize to the
Commissioners of the impact this will have on irrigators in the
Rocky Mountain area.
If you will take a look, every little dot is a irrigation
well, every little yellow dot. So that's the ground water. So
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that the impact we're looking at when this potential BPA credit
and the rate increase is going to come through. So if you take
the Rocky Mountain area, which is half of Bingham County -- I
will just put it down for you guys. That way you can take a
cioser look at it. And that just shows you the number of
irrigation wells that are wi thin the terri tory of Rocky Mountain
power. And so we're just here just to emphasize that from our
technical information that we are providing we would like to see
a credit of $51 per kwfor the Irrigation Curtailment Program
that's presently before the commission. We believe that the
credit, the $51 per kw would offset a lot of the BPA credit
that's presently -- that's been taken away from the irrigation
class. And so we believe that the company benefits by having
that potential curtailment being able to be be there. And we
believe that it i S about the only way that folks that are wi thin
the irrigation class will be able to survive this next year
because we know that the BP -- and the Commissioners know that
the BPA credit is not coming back next year.It probably won't
be back until 2009. And then it i S only going to be a fraction
of the amount that they' presently are getting. So that's very
serious for the next coming year. And especially the folks that
are wi thin just the rate shock of what's going on.
Wi th that I would be open for questions.
MR. PRICE: Questions from counsel?
MR. BROWN: I have no questions, thanks.
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COMMISSIONER REDFORD: Thank you very much.
Do you want us to keep this?
MR. TOMINAGA: You can have it until the end
of the meeting. I can have a map reproduced for the technical
meeting next week.
COMMISSIONER REDFORD: Okay, thank you.
The next witness would be Tom -- is it Haines?
MR. . HAINES: I will defer my time to
somebody else.
COMMISSIONER REDFORD: Do we have any other
wi tnesses? Pardon me? Mr. Holm, you had deferred your time.
Do you want to testify at this time?
MR. HOLM: No.
COMMISSIONER REDFORD: Thank you.
Senator Bob Geddes. Welcome, Senator.
SENATOR BOB GEDDES, was first duly sworn.
MR. PRICE: Could you, please state your
fUll name, spell your name, and state your occupation.
COMMISSIONER GEDDES: My name is Robert
Geddes, G-E-D-D-E-S. I reside at 370 Mountain View Avenue, Soda
Springs, Idaho.
MR. PRICE: Are you a customer of Rocky
Mountain Power?
24 SENATOR GEDDES: I am not. But as a state
.25' senator, I represent many who are.
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MR. PRICE: Thank you..1
2 SENATOR GEDDES: Thank you, Commissioners,
3 for being here tonight. I normally would not have driven to
4 Rigby to testi fy, but on Thursday I have some other commitments
5. that will make lt impractical for me to be at the hearing that
6 will be scheduled in Grace. I would also like to tell you once
7 again that through luck other some miracle our high school
8 football team will be playing in the state championship that
9 evening. So a lot of people have expressed concern to me that
10 they will not be able to be at the hearing because it seems to
11 be more fun and perhaps a once in a lifetime opportunity to
12 attend a football game of that magnitude. There are also many
.13. other acti vi ties that just happened to be scheduled that
14 evening. Even so there may not be a huge number of people
15 attending the hearing in Grace that i s later this week, please
16 don i t misinterpret that as a lack of interest.
17 Over my legislative career I have been in a number of
18 meetings where Scottish Power and Pacific Corp. representatives
19 have claimed that their rates were some of the lowest in Idaho.
20 That claim in my opinion was not accurate because the offset of
21 the BPA credit was not accurately represented. Now, we have
22 lost that BPA credit. And so with that loss and with the
23 proposed increase that has been requested by the utility, that
24 will without doubt provide significant hardship on many to pay
.25 their utility bill. In some instances, primarily the industrial
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customers of Rocky Mountain Power, rates were adj usted just last
January. Those were adj us ted under a mutual agreement by
industrial customers to the satisfaction of both the customer
and the utility company. And just five or six months later, the.
utility is now asking for more. And not just a little bit more,
but a significant amount more. In my opinion an increase of 24
percent -- or as some people have felt -- that number is not
reflecti ve of what the true impact will be.I have been told by
some people that the actual increase will be upwards of 32
percent. And if you can imagine power rates increasing by a
third, that would be a significant increase for our industries
in southeastern Idaho to be competi ti ve and remain competi ti ve.
Now, I understand the responsibility of the Commission that
you have the charge to determine what is just and fair and a
reasonable rate of return for the utility.I have heard from a
number of sources, primarily from Boise, that there is an effort
in the works to arrive at some settlement and that would
basically defer any action by the committee or the Commission.
In my opinion if that happens, there are certain segments of the
customer base that are left out, primarily the consumer who is
not represented in Idaho as they are in some other states; for
example, in Wyoming where there is an association that
represents homeowners and utility consumers.i would urge the
Commission to take that into account. And if there is a
settlement proposed, insure that the average citizen who
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consumes power and who is significant increase not only in this
rate case perhaps but also the loss of the BPA credits will feel
that in their monthly power bills. As I sat through the
workshop, I was a little bit concerned because as I heard the
comments and the explanation, the supply and demand is in
jeopardy because primarily from the growth in residential demand
that has dropped in new residences on the Wasatch front. And I
would certainly hope the Commission takes that into significant
consideration as you determine what Idaho's real impact is to
that pressure that's put on the supply.
Another point that I would like to make is with respect to
industrial customers, you know this offset of interruptible
power is perhaps a good thing, but those companies make money by
producing. And if their opportunity to produce is curtailed by
a company who can i t supply the power then their in essence
losing money because they don't make money by being idle. And
so as good as it sounds -- in my opinion and I have a little bit
of knowledge on how these companies make money. They make money
by producing product not by idling the processes and being
wi thout the power necessary to produce. And so I would hope
that you take that into consideration as you deliberate and
decide what is just, fair, and reasonable for the community and
23 companies to receive.
MR. PRICE: Thank you. Any questions from
counsel?
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MR. HOMER: I'm Kevin Homer. I'm the attorney
from Tim Shirts, who is an intervener in this case.
Senator, I'm an attorney and I want to ask you a
question. And I don't want to make it anymore complicated
than --
SENATOR GEDDES: It wouldn't be smart to make it
complicated.
MR. HOMER: Most of the testimony from the rate
payers is about the effect that this rate increase is going to
have on the rate payers directly: In other words, my power bill
is going to go up and therefore I will have less money to spend
on other things. But you apparently represent a lot of the
people down in the Soda Springs area. And I want to ask about
what would happen to those people independent of their power
bill going up if Mansanto to had to shut down completely, send
part of its operation someplace else, curtail its operation --
do whatever in order to continue to operate because of the power
increase. Do you .have any idea at all what that would do -- how
many people are employed by Mansanto; what would happen if a
particular branch of Mansanto had to stop doing something
because they could no longer afford the power.
Do you have any information about that?
COMMISSIONER GEDDES: Well, Mr. Chairman, I
don't really want to speak for Mansanto.
MR. HOMER: I'm asking you to speak for the
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indi vidual, the community -- the people that live in the
community who are employed at Mansanto. I wonder if you even
know how many people that is or how many employees Mansanto has
tha t live there in that area, etc..
A. Directly and indirectly Mansanto employs approximately
800 people. They are not the largest employer in the Soda
Springs area. Agrium employs more people than Mansantodoes. I
see those two industries as really being the backbone not only
to the Soda Springs economy, but of the Southeast Idaho economy.
We have demonstrated that a lot of the people who work in
Caribou County reside out of Caribou County. There are people
who drive from Franklin, from Bannock County, from Oneida
County, Bear Lake County. And some even come in from Wyoming to
work at those facilities. And so the true impact to the those
facili ties if they are put to the point where they cannot be
competitive in what has become a very global market would be
severe not only to Eastern Idaho, but the entire state of Idaho.
MR. HOMER: Do you think the would be actually be
more widespread than even your legislative district?
SENATOR GEDDES: Well, my legislative district is
qui te large. It goes from the Utah boarder clear up to Teton
County so a lot of these residents outside of some of the cities
who have a municipal power supply and provide power to their
communities, it would be significant in my opinion. And it
comes on the back of a ¡ot of other significant increases.
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We're seeing record high fuel costs, and you know that not only
impacts the industries in the area but that impacts every
indi vidual household. And let me tell you from some personal
experience my neighborhood it wasn't long ago that banks were
offering very very low interest rates. And people were
refinancing their homes because they could see a little bit of
opportuni ty to increase their cash flow. And many people who
done that. Well, as is typical when most people have additional
cash flow, we find ways to spend that. At the same time car
manufacturers were offering little or very low interest rates to
purchase new cars. A lot of my neighbors have a lower house
payment, a new car in the garage, and now afford to put gas in
it. I think some of you probably feel that same pressure just
simply because we're not used to paying two dollars and
eighty-some cents for a gallon of gas. And when you live in a
rural like I represent, a rural community like I represent,
traveling is not a luxury, it's a necessity. And a lot of
people's income is spent on just going to and from work, taking
care of those necessary life demands that all costs money to
survive in a rural environment like Eastern Idaho supports. And
so any increase is going to put a burden on many of these
people's financial situations in my opinion.
MR. HOMER: Thank you.
MR. PRICE: Thank you, Senator.
SENATOR GEDDES: Lynn Burtenshaw.
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LYNN BURTENSHAW was first duly sworn.
MR. PRICE: Can you, please state your name
3 and spell your last a~ well as your address.
4 MR. BURTENSHAW: Lynn, L-Y-N-N,
5 B-U-R-T-E-N-S-H-A-W, 1758 North 1000, Eriton Idaho 83450.
6 MR. PRICE: And are you a customer of Rocky
7' Mountain Power?
8 MR. BURTENSHAW: I am.
9 MR. PRICE: Thank you.
10 MR. BURTENSHAW: Commissioners, I appreciate
11 the time you have given to come by. I don't have a whole lot of
12 facts for you. I just want to bring it down to my level.I
have a small farm, it around 800 acres. That's not a big farm
nowadays. It just barely makes the payments on the machinery.
15.And the difference in power this year -- last year I was able to
16 irrigate in the fall, make sure I had a good moist seed bed
17 hopefully for spring. So I did a lot of fall irrigation last
18 year. My power bill last year approximately $35, OOD. My power
19. bill is $50,000.I did' no fall irrigation.
20 The impact just of losing the BPA was tremendous to
21 us. My -- I have four mortgages on my farm and they total
22 approximately $100,000. And before I was about 30 percent of my
23 mortgage was about what my power bill is. Now it's almost 50
24 percent of what my mortgage is. You know, like I say, I'm a
small farmer. I don't have a lot. But there's a lot of small
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farmers that are about our size. And this is really hitting us
in the pocketbook. It's really difficult to keep paying the
payments and keep seeing these prices rise. I understand that
there is a need for infrastructure to be built and more
generation of power; but you know, I don't have a whole lot of
sympathy for that because I have put power lines into pumps in
the last five years. And two of them were approximately
three-quarters of a mile -- half to three-quarters of a mile.
Each one of those infrastructures cost me $50,000 apiece. Put
another one in that was about four miles. And we shared that
with others. Our share $160,000. And when five years is up, I
get the dubious honor of j ust giving that to Utah Power and
Light. And I know that they have put in a share there too -- I
mean to Rocky Mountain Power. I know they have put in a share
there too, but we have put in our share. And it gets a little
frustrating to be the ones who provide a large percentage of
that infrastructure and then have no share of ownership. So I
guess I would recommend that we take a long hard look at any
kind rate increase, that we do not allow it to happen if it's at
all possible. Those people that are building those houses and
requiring that extra generation, that costs be passed to them
just as we as irrigators or farmers are paying our share of the
cost when we require more. That's all I have.
MR. PRICE: Any questions?
COMMISSIONER REDFORD: Thank you very much.
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Merle Bugikomer.
MERRILL BUGIKOMER was first duly sworn.
MR. PRICE: Could you, please state and
spell your name as well as --
MR. BUGIKOMER: My first name is Merle,
M-E-R-L-E; Last name Bugikomer, B-U-G-I-K-O-M-E-R.I have a
house here.
MR. PRICE: What is your address?
MR. BUGIKOMER: Box 556, Rigby, Idaho.
I don't have any -- I didn't get any actual documents
together to show you, but I just want to give you a typical
power bill. This one little farm I got left on the desert west
of Roberts -- I sold all the rest because it was the thing to
do -- get out of it because there is nothing left. But anyway,
here's the typical power bill: I put that last piece of ground
into the (inaudible) program and they required me to plant some
cover crops and some things in there. And I did. But they
says, well, it's not coming good because we had a dry year and
so I had to irrigate.I run the water on that 160 acres
didn't have a pivot on it; it was eight hand lines there 17
days. The power bill was $6,500. Anybody that wants to do the
math on that can. But it's come to the point where it's better
to shut the pumps down than operate them. It's finally to that
point. I could see it coming. I'm glad that KEP (phonetic)
come along and helped me out. But I believe it would be better
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off to shut them down and quit then it would be to continue
purchasing that high priced electricity. That's just -- there
is no economics there left. It's just gone. Everything is
gone. And so I really believe it is cheaper to shut the pumps
off than it is to operate them. There are deep wells out there.
Thank you very much.
COMMISSIONER REDFORD: Are there any
questions by counsel?
COMMISSIONER KEMP: Just one.
COMMISSIONER REDFORD: Commissioner Kemp.
COMMISSIONER KEMP: Very quickly. What size
pump are you using?
MR. BUGIKOMER: 250 horse power.
COMMISSIONER KEMP: And do you know what the
demands was on that?
MR. BUGIKOMER: I can't remember.
COMMISSIONER KEMP: Just roughly give me
some idea.
MR. BUGIKOMER: I can't remember what the
demands was, but it was significant. I should have brought that'
power bill. But I'm telling you the truth. But I don't know
what the -- I can't remember exactly what the demand was or the
kilowatt hours I used, but that was the bill. 17 days is all we
run it.
MR. PRICE: Any questions from Counsel?
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MR. BROWN: No questions. Thank you.
COMMISSIONER REDFORD: Thank you very much.
Tom Holm.
TOM HOLM was first duly sworn,
MR. PRICE: Please state your name and spell
your las t as well as your address.
MR. HOLM: Tom H-O-L-M. Address 3007 Newman
drive.
MR. PRICE: What city?
MR. HOLM: Idaho Falls.
MR. PRICE: Are you a customer of Rocky
Mountain Power?
MR. HOLM: Yes, I am.
MR. PRICE: Thank you, please proceed.
MR. HOLM: I would just like to say when I
signed that paper I wasn't wearing my glasses. I'm sorry, I
didn't know I was going to testify.
I want to tell you the truth: The farming situation
is difficult. And I'm sure you have heard. You know all that.
And all I want to do is just as a member of the Idaho Pumpers
Association, I would like to let you know that as farmers we
would like you to take a look at what we have got and throw our
23' support behind that. We run big pumps and have huge horsepowers
24 in the pumps. Our bills have almost doubled compared to last
.25 year. So needless to say the dryness, the poor quality of crops
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because of the heat more than effect the bottom line of our
crops. And so anyway, that's all I'm prepared to say.
MR. PRICE: Thank you, sir.
MR. HOLM: I know you guys have costs also.
MR. PRICE: Thanks. Any question from
çounsel?
COMMISSIONER REDFORD:I don't think so,
sir. All right, thank you very much.
Jeff Raybold.
JEFF RAYBOULD was first duly sworn.
MR. PRICE: Please state your name and spell
your last as well as your address.
MR. RAYBOULD: Jeff Raybould,
R-A- Y - B-()-U - L- D.
MR. PRICE: Are you a customer of Rocky
16 Mountain Power?
17 MR. RAYBOULD: Yes. Address is 301 North
18 1500 East, St. Anthony, Idaho 83445.
19 Just so give you a little general background, I farm a
20. partnership with my dad. and my son in the St. Anthony and
21 Rexburg area. We grow potatoes and barley. As many people have
22 indicated it's been a rather difficult season to irrigate.
23 Because of the heat, we're looking at some increased costs here
24 to irrigate because of the lost BPA credit. We're also looking
.25 at the increased costs that because of I believe it was a little
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over 5 percent increase from Rocky Mountain Power a year ago.
And now we're talking about an additional rate increase on the
heels of that this year. And you stack it all up and you are
looking at a power bill that is beginning to make it difficult
to make pressurized irrigation work for us.
And so it would be my hope that you would take all of
that into consideration as you evaluate what Rocky Mountain
Power has asked for. It is my understanding that they are
looking at what their return on what investment should be and
that they have evaluated what that should be and have come to
you and asked you to assess that and give them a rate increase
to give them that rate of return.
That would be nice if we could all go our
customers and say we would like to have a certain rate of return
and they would also say, yeah, that would be good, let's do
that. I understand that's a special set of circumstances
because they are the only providers. We all need to work
together to see we have a reliable supply of electricity. And
Rocky Mountain Power does an outstanding job to provide that
service to us as customers. But based on all the factors that
are out there, we .do need to limit those increases to the bare
minimum to those of us that are struggling with all the other
costs we have to deal with be able to have the return that we
need to stay in business and provide employment to our employees
and keep the businesses and business as well. That would
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conclude my comments.I would be happy to stand for questions.
MR. PRICE: Are there questions from
Counsel?
COMMISSIONER REDFORD: Are there any other
folks notwithstanding what is written here that would like to
gi ve testimony?
Yes, sir. Come right up.
DELL RAYBOULD was first duly sworn.
MR. RAYBOULD: My name is Dell Raybould.
Dell, D-E-L-L; Raybould, R-A-Y-B-O-U-L-D. I live 3215 North
2000 West in Rexburg. I am a customer of Rocky Mountain Power.
MR. PRICE: Thank you, sir.
MR. RAYBOULD: I wasn't going to say
anything here tonight; but in listening to the testimony here
I am a state representative, representing District 34. And I
have had numerous calls from my constituents concerning this
proposed increase. And I think most of it has come about from
the lost of the BPA credits. And we have seen what has happened
to our power bills the last half of July, August and September.
But one thing that brought it -- came to my mind, and
I think it's about ten years ago -- when Pacific Corp. came to
the Commission and asked for a very substantial rate increase.
And it was being offset by an increase in the BPA credits. And
I think it would be well for the Commission maybe to go back and
research the testimony of Pacific Corp. at the time and take a
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look at their testimony at how the increase in the BPA credits
was going to offset the increase in their rate in order to
assure their customers a stable rate base. And now we're losing
the BPA credit s .I'm wondering about that additional rate
increase that the power company got at that time if it was
totally justified. And maybe at this time that ought to be
looked into to see if that was maybe overly increased in view of
the fact that the BPA credits went up. And if that be the case,
maybe because the BPA credits have gone down now, and it looks
very doubtful -- in fact, completely doubtful that we will ever
get BPA credits back to where they were. Maybe a fraction of
them we would be happy if we could get those back this next
year. But because of that testimony, maybe you should take a
look at reducing the rates that Rocky Mountain Power has asked
for based on the reduction we have seen in the BPA credits.
I remember going to the hearing in Boise over at
the PUC office. It's been about ten years ago. I think we did
get a substantial increase in the BPA credits. And Pacific
Corp.Utah Power at the time -- ate that up with an increase
in their rates because it was justified because it was not going
to increase the consumer's rates. Now, I'm an irrigation
pumper. And I saw a substantial increase in our pumping bill.
And like it's been testified here, we did very fall irrigating
this year because of the lost BPA credits and the rates.
One think that I think you might take into
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consideration, and that is what's going to happen to the higher
value crops that are being grown that require a lot more
irrigation.I'm thinking maybe if this power increase goes
through along with the loss of the BPA credits that aggricul ture
will see a substantial shift maybe from the high value crops
such as potatoes, sugar beets, and corn to less valuable, the
grains, small grains, because of the less need for irrigation.
And that's going to have an effect on the economy of Eastern
Idaho and the state of Idaho.I serve on the Revenue and
Taxation Committee in the House. And I can see if our net gross
tax receipts start to recede and we're seeing additional
expenses in the state what the loss of these high price crops
and the loss of revenue from our machinery dealers, fertilizer
dealers and those kinds of things is going to do, not only to
the economy of the state, but to the state's budget. And what
it could do not only increase in power rates but an increase in
our taxes that might have to be assessed to provide the
education, our correction department, transportation, and all of
those things. That is a part of state government that we have
to be aware of. So this is much more far reaching than just a
farmer or two having to cut back -- or like it's been said here
before, take his farm out of production and put in crap or
something like that. The state itself, not just our citizens
but the state itself could suffer greatly from these large
increases.
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That's all I have. And I don't know what year to
tell you to go back and look at that, but I remember distinctly
that the power companies asked for a fairly substantial rate
increase that was going to be offset by the increase in the BPA
credi ts that kept everybody even.
COMMISSIONER REDFORD: Any questions?
MR. PRICE: Representati ve Raybould, I have one
question. You stated that a lot of -- a majority of the
questions from your constituents involved the loss of the BPA
credi t. Were there any questions involving the quality of
service or reliability?
MR. RAYBOULD: No.I believe that we're
satisfied in our area. I know at least in our operation I'm
very satisfied with the relationship we have had with Utah Power
-- Rocky Mountain Power, absolutely. But I think it's
unfortunate that this request from Rocky Mountain Power comes
substantially right on top of the huge increase that we saw from
the loss of the BPA credits. And that is what has alarmed my
consti tuents the people that has called me.
COMMISSIONER KEMP: Representative Raybould, one
question: Regardless of the time period in which the
conversation was had excuse me, between Pacific Corp. and the
rate payers on the BPA credit, the BPA credit actually comes
about because the rates Pacific Corps. had were higher than the
BPA. So Pacific Corp. And BPA basically exchanged power. There
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was a cash rebate because the power wasn't really set back and
forth; it was done as a monetary exchange so there was money
that came back to Pacific Corp. Distribution were given to
customers that qualified for that rebate. The point being that
for you to get a credit, you already had to have a higher rate
in BPA; and if it was considerable rate -- considerable credit
then it was a considerable rate difference that you already had.
And then as I understand it from Pacific Corp. said that we're
going to need additional money and you can offset that with what
you get back from the BPA residential exchange. But in fact all
you were doing in that case was receiving some money from the
fact your rates were already higher substantially in BPA and
then you had a race increase on top of that.
Is that a fair assessment of the conditions that
existed at that point in time? You already had high rates,
higher than certainly BPA has and then you had a rate increase
on top of that?
REPRESENTATIVE RAYBOULD: That's what I recall,
but it has been ten, twelve years ago. It has been quite some
time ago. But I do remember it was when Pacific Corp. was
getting an increase on the BPA rates, so they raised their rates
to offset it so everybody's power bill was going to be
substantially the same. And here again, that's why I'm
suggesting that maybe you research the minutes of those hearings
when Pacific Corp. /Utah Power asked for a rate increase and see
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what some of the testimony was. I remember being in the PUC
office when that testimony was given when Utah Power's delegates
were there.
COMMISSIONER KEMP: Okay.
MR. HOMER: Can I ask two questions?
Representative Raybould, you say you gotten a lot -- you had a
lot of contact: telephone calls from your constituents. How
many of those have been just rank and file residential
customers, not farmers but people who pay ordinary household
utility bills.
REPRESENTATIVE RAYBOULD: Well, I think this
comes up considerably when you are out in meetings and around
and tlaking about the legislature. And I serve on the resource
conservation committee. And, of course, water comes up and
energy. I'm chairman of the environment energy and technology
commi ttee in the House. And when we start talking about those
subjects, this thing losing the BPA credits has certainly
sparked people's interest in power rates. They saw what
happened to their power bills. And then they read in the
newspaper that there is going to be another increase on top of
that. And it's a very lively topic discussion amongst people
that I have been around.
MR. HOMER: Is it safe to say even the
residential customers are equally up in arms about that?
REPRESENTATIVE RAYBOULD: Absolutely.
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MR. HOMER: A different question: You were
talking what I would call a trickle-down effect, the consequence
of this rate increase and how it would be widespread literally
across the entire state. Do you know -- I don't. Do you know
out of all of the farms in the state of Idaho what percentage of
those will be affected by this rate increase?
REPRESENTATIVE RAYBOULD: I do not. And of
course, we're over here on the east side of the state. And
percentage wise it's probably small compared to the total
agricul tural acreage that is irrigated with electric power. But
nevertheless, when we take a look at the tax income of the state
and how the budgets are put together and what we have to come up
wi th with revenue to cover those budgets, even a small effect
can have a great deal of effect on the ability of the state to
fund the operations of the state and the different budgets of
the different departments.
MR. HOMER: Thank you.
COMMISSIONER REDFORD: Thank you, sir.
Is there anyone else that would like to make a
comment?
Thank you, sir.
SCOTT WRIGHT , was first duly sworn.
MR. PRICE: Would you please state your full name
as well as your address.
MR.' WRIGHT: Scott Wright, W-R-I-G-H-T. 365
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North 4450 East Rigby. And I am a Rocky Mountain Power
customer.
MR. PRICE: Thank you. Please proceed.
MR. WRIGHT: I would like to just maybe address
the group here as a rank and file customer. I appreciated your
comment there because I have probably a fairly microscopic view
of the situation regarding the rate increases. And I apologize
for that. But it's kind of my viewpoint that just because there
is a shortfall of income or something like that that seeking a
rate increase is not necessarily the best way to go for a
company especially when it's case of I can't go find power
anywhere else. There is no competitors to keep in check the
power rates. I heard on the news a couple nights ago they want
to raise -- or add some more fuel tax so they can fix some
roads. The post office it raises the rates on postage stamp
every once in awhi le. And it's become a more frequent
occurrence because why? They can. Are they competi ti ve? I
don't know. Can they compete with e-mail? Can they compete
with UPS? Can they compete with the different competitors?
Well, if they can't then they raise their rates. And has a rank
and file customer, my you know, I do a little irrigating. I
have a few acres that I run the pump on in the summertime. And
my bill has gone from 80 or 90 bucks a month to 130 or 140. So
compared to some of these others, it is not as much, but
percentage is probably there. And I'm just to the point where I
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think the lowest level, which is the rank and file, the how much
more can we be sucked out of by tax taxes, by rate increases,
by fuel costs, by milk prices, by grocery prices? I can't, in
my job, go out and say, you know, I'm going to start 20 percent
to sell and expect to get it. You can throw a rock and hit a
Realtor.Somebody else will do it for a lot cheaper.I'm out
and there is no -- there's not that kind of a situation. I
understand there are regulations and things in place for this
particular situations. We can't have power lines running
everywhere. But the point is just because we need power
increase, we're not making it, boom, doesn't work in my mind.
And that i s pretty much all I have got to say.
COMMISSIONER REDFORD:Thank you.
Are there any questions for the Commission?
Unless anyone else has a coment they would like to make, I
would like to thank you all for attending and giving us your
opinion on this matter. And we will be taking into this in
consideration. And there is a rate case starting next week
November 6th in Boise where testimony will be taken from the
power company, the staff, our staff, the interveners. And it
will go as long as it is necessary to complete the work. And
then after that the Commission will render its decision as to
whether to grant or partially grant or to modify; or for that
matter, not to give a rate increase at all. And that will come
in due course.
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We do have a public relations department that tries to
keep all of you informed as best we can; and, of course, we have
two very capable members of the Idaho Legislature who, one, keep
us honest; and, two, are very very cognizant of what's going
gone on in our area. So thank you for coming. We're all, on
the commission, from small towns in Idaho. And a lot of us are
from farming and ranching backgrounds. So we all understand to
a certain extent the economy and how you folks feel. And I
thank you for coming.
Hearing nothing else, we will be adj ourned.
(Proceeding concluded at 8 p.m.)
39
.AUTHENTICATION
I D A H 0
MAD ISO NCO U N T Y:
I hereby certify that the foregoing transcript was
taken down, as stated in the caption, and the questions and
answers thereto were reduced to writing by me; that the
foregoing pages represent a true and correct transcript of the
evidence upon said hearing to the best of my ability;
I further certify that I am not of kin or counsel to the parties
in the case; am not in the regular employ of counsel for any of
said parties; nor am I interested in the result of said case.
~ ~~~~~ss my hand and official seal this the ~ day of
HoI y . Co
Certifie urt epor
And Notary Public.' for
The State of Idaho
My commission expires 1/31/2012
Idaho CSR No. 263