20090317Vol I Technical Hearing re Stipulation.pdf

ORIGINAL.BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR APPROVAL OF CHANGES TO
ITS ELECTRIC SERVICE SCHEDULES
)
) CASE NO. PAC-E-08-07
)
)
)
) SETTLEMENT STIPULATION
)
)
BEFORE
::~
-J
,
COMMISSIONER JIM D. KEMPTON (Presiding)
COMMISSIONER MACK A. REDFORD
COMMISSIONER MARSHA H. SMITH
-0:i
caoo
.~
PLACE:Commission Hearing Room
472 West Washington
Boise, Idaho
DATE:March 11, 2009
VOLUME I - Pages 1 - 105
.
CSB REPORTING
Constance S. Bucy, CSR No. i 87
23876 Applewood Way * Wilder, Idaho 83676
[phone] * [phone]
Email csb(Ðheritagewifi.com
.
.
.
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1 APPEARANCES
2
3 For the Staff:Scott Woodbury, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83720-0074
Daniel E. Solander, Esq.
and Mark C. Moench, Esq.
Rocky Mountain Power201 South Main Street
Suite 2300
Salt Lake City, Utah 84111
RACINE, OLSON, NYE, BUDGE
& BAILEY
by Eric L. Olsen, Esq.
Post Office Box 1391
Pocatello, Idaho 83204-1391
Brad M. Purdy, Esq.
Attorney at Law
2019 North 17th Street
Boise, Idaho 83702
4
5
For Rocky Mountain Power:
6
7
8
9 For Idaho Irrigation
Pumpers Association:
For the Community Action
Partnership of Idaho:
CSB REPORTING
[phone]
APPEARANCES
1 I N D E X.2
3 WITNESS EXAMINATION BY PAGE
4 J.Ted Weston Commissioner Kempton 6(Rocky Mountain Power)Mr.Solander (Direct)8
5 Commissioner Redford 9CommissionerSmith13
6 Commissioner Kempton 16
Mr.Solander (Redirect)18
7 Mr.Woodbury (Cross)20
Commissioner Smith 21
8 Prefiled Direct Testimony 23
9 Randy Lobb Mr.Woodbury (Direct)45(Staff)Prefiled Direct Testimony 48
10 Commissioner Redford 82
Commissioner Smith 8311Commissioner Kempton 84
12 Teri Ottens Mr.Purdy (Direct)87
(CAPAI)Prefiled Direct Testimony 89
13 Commissioner Smith 100.Commissioner Kempton 101
14 Mr.Purdy (Redirect)103
15
16
17
18
19
20
21
22
23
24.25
CSB REPORTING INDEX
(208 )890-5198
.
.
.
17
18
19
20
21
22
23
24
25
1 EXHIBITS
PAGE
103
103
103
103
103
2
3 NUMBER DESCRIPTION
4 FOR ROCKY MOUNTAIN POWER:
5 29 - Table A - By Rate Schedule Premarked
Admitted6
7
30 - Billing Determinants Premarked
Admitted
8 31 - Monthly Billing Comparisons _
By Rate Schedule Premarked
Admitted9
10
11 FOR THE STAFF:
12 101 - Settlement Stipulation Premarked
Admitted13
14
102 - Proposed Rates for PacifiCorp
Settlement Premarked
Admitted
15
16
CSB REPORTING
Wilder, Idaho 83676 EXHIBITS
.1 BOISE, IDAHO, WEDNESDAY, MARCH 11,2009, 9:30 A. M.
2
3
4 COMMISSIONER KEMPTON: Good morning. It i s
5 March 11th, 2009, and it is 9:30 a.m. at the Idaho Public
6 Utilities Commission i s Hearing Room, the time, date and
7 place to conduct a technical and evidentiary hearing on
8 the j oint motion for approval of a settlement stipulation
9 filed by Rocky Mountain Power , Community Action
10 Partnership Association of Idaho, the Idaho Irrigation
11 Pumpers Association and Commission Staff as noticed in
12 Commission Order No. 30727 dated February 11th, 2009,
13 more specifically, the application of Rocky Mountain.14 Power for approval of changes to its electric service
15 schedules and a price increase of 5.9 million or 4
16 percent as indicated in Idaho Public Utilities Case
17 No. PAC-E-08-07.
18 I i II be the Chair this morning. 11m Jim
19 Kempton. I i m one of the Commissioners. Marsha Smith on
20 my left is a Commissioner and Mack Redford on my right is
21 president of the Commission. The proceedings in the case
22 are being conducted in accordance with Commission
23 jurisdiction under Title 61 Idaho Code and Commission
24 Rules of Procedure under the Idaho Administrative.25 Procedures Act 31.01.01. The right to participate in the
CSB REPORTING
[phone]
1 COLLOQUY
.
.
.
1 hearing today is limited to intervenors and Applicant.
2 The meeting is open, however, to interested parties. It
3 is a public meeting or hearing I should say.
4 In the matter of appearances, if we could
5 go through first for Rocky Mountain Power.
6 MR. SOLANDER: Thank you, Chairman
7 Kempton, Commissioner Redford, Commissioner Smith. My
8 name is Daniel Solander. I i m appearing on behalf of
9 Rocky Mountain Power and I have with me at the counsel
10 table Mark Moench, senior vice president at Rocky
11 Mountain Power.
12 MR. WOODBURY: Scott Woodbury, Deputy
13 Attorney General, for Commission Staff.
14 MR. PURDY: Brad Purdy on behalf of the
15 Community Action Partnership Association of Idaho
16 MR. OLSEN: Eric Olsen on behalf of the
17 Idaho Irrigation Pumpers Association.
18 COMMISSIONER KEMPTON: Okay, and just out
19 of curiosity, do we have anybody here from either
20 Monsanto or Agrium? Okay.
21 MR. WOODBURY: Mr. Chairman?
22 COMMISSIONER KEMPTON: Mr. Woodbury.
23 MR. WOODBURY: As sort of a procedural
24 housekeeping matter regarding the record in this case, I
25 would like to -- in reading through the filed testimony
CSB REPORTING
[phone]
2 COLLOQUY
.
.
.
1 of Rocky Mountain Power, there is in support of the
2 stipulation, there is reference to the underlying
3 testimony that was filed in the application and so I
4 would request, I guess, that the Commission pursuant to
5 the power that it has under Procedural Rules 292 and 282
6 and 283 that the Commission take notice and include
7 within the record for decision the prepared testimony and
8 exhibi ts that were filed by the Company, and I would also
9 note that in the notice of this hearing and the
10 scheduling, it called for filing of testimony by the
11 stipulating parties and testimony was filed by Rocky
12 Mountain Power, Commission Staff and Community Action
13
14
Partnership Association of Idaho, but the Irrigators have
filed instead comments in support of the stipulation, and
15 I would also note a filing by Rocky Mountain Power on
16 February 3rd, a letter filing which was received by the
17 Commission on February 5th, regarding Monsanto IS
18 non-opposi tion, I guess, to the stipulation and I would
19 like to have both the comments of the Pumpers and the
20 letter of Monsanto included in the record for the
21 Commission.
22 COMMISSIONER KEMPTON: Okay, if there's no
23 objection, it will be so ordered. Seeing none, it i s so
24 ordered. The hearing procedures, what I would like to do
25 today since the Applicant has pretty well set the stage
CSB REPORTING
[phone]
3 COLLOQUY
.
.
.
1 in the stipulation that foundation is best presented by
2 Rocky Mountain Power and so I would like when we start
3 the witness procedure to have Rocky Mountain Power begin
4 and then I will go ahead and call the following
5 intervenors in the order of Staff, the Idaho Irrigation
6 Pumpers Association, Community Action Partnership of
7 Idaho, CAPAI, and in the examination of witnesses, I
8 think probably the only examination that will take place
9 will be through the Commissioners here. If there should
10 occur a circumstance where cross-examination is
11 requested, it will be granted; however, the Commissioners
12 at any time through the Chair can request to examine the
13 witness.
14 The procedures will be standard. I will
15 have the witness take the stand and the oath will be
16 administered. We will request a spelling of your name
17 for the recorder so that we have that established and
18 during the course of the hearing if everybody would stick
19 wi th last names in the process of addressing persons or
20 parties in the matter, that will help because it will
21 assist the recorder in keeping names straight. Are there
22 any preliminary matters before we begin the witness
23 process? Okay, Rocky Mountain Power.
24 MR. SOLANDER: Thank you, Chairman
25 Kempton. Are we going to take opening statements or
CSB REPORTING
[phone]
4 COLLOQUY
.
.
.
1 would you just prefer to move directly to our witness?
2 COMMISSIONER KEMPTON: It i S your choice
3 if you'd like to make an opening statement, recognizing
4 it is a settlement.
5 MR. SOLANDER: I don i t believe we need to
6 make one. I just wanted to check with the Commission for
7 your preference.
8 COMMISSIONER KEMPTON: Right, it's your
9 choice, and we can move right to the witness if that i s
10 what you would like to do.
11 MR. SOLANDER: That would be very good.
12 We'd like to call Mr. Ted Weston, Rocky Mountain Power's
13 manager of Idaho regulatory affairs, as our only
14 witness.
15 COMMISSIONER KEMPTON: Okay.
16
17
18
19
20
21
22
23
24
25
CSB REPORTING
[phone]
5 COLLOQUY
.
.
.
1 J. TED WESTON,
2 produced as a witness at the instance of Rocky Mountain
3 Power, having been first duly sworn, was examined and
4 testified as follows:
5
6 EXAMINATION
7
8 BY COMMISSIONER KEMPTON:
9 Mr. Weston, do you have a copy of yourQ
10 statement with you, your settlement testimony? If you
11 don i t, would you acquire one?
12 A I have one with me.
13 Q Because before I would ask if you have any
14 changes to make to your statement, I would like to
15 address your attention to your testimony on page 10 and
16 when you get there, I i II give you the line, but I want to
17 inquire.
18 A Okay.
19 Okay, starting with basically line 15 , itQ
20 addresses the Idaho average residential customer Schedule
21 1 use, power use, at 850 kilowatt-hours a month and then
22 it goes on and it says, "At that usage level residential
23 customers would experience a $3.09 increase per month to
24 their summer bills and $2.38 per month to their winter
25 bills. "I i m suggesting that rather than including that
CSB REPORTING
[phone]
6 WESTON (Com)
Rocky Mountain Power
.
.
.
1 as a multiplier, which is the way the language reads,
2 that it should be an addition of $3.09 to the current
3 summer bills and $2.38 to the current winter bills, which
4 is in addition to that amount to each of those monthly
5 bills. It's your choice to accept whether you would
6 accept that change or not or any words like that, but
7 right now that particular sentence is not something that
8 we could use in an Order if we were writing it ourselves
9 because it indicates a multiplier and not an addition.
10 I agree with that correction. It's anA
11 additional $3.09 per month for the summer bill and $2.38
12 per month for the winter bill.
13 Are there any other changesQ Thank you.
14 you have to your testimony?
15 Yes, there is. I have one additionalA
16 change.
17 (Pause in proceedings.)
18 COMMISSIONER KEMPTON: Commissioner Smith
19 advises me that I should have asked Mr. Solander to
20 identify the witness and establish his qualifications and
21 I was remiss in that aspect, if you would go ahead and do
22 that.
23 MR. SOLANDER: Certainly. Would you like
24 me to walk through the additional correction?
25 COMMISSIONER KEMPTON: Please.
CSB REPORTING
[phone]
7 WESTON (Com)
Rocky Mountain Power
.
.
.
20
21
1 DIRECT EXAMINATION
2
3 BY MR. SOLANDER:
4 Q Would you please state your name and spell
5 it for the record?
6 A My name is Ted Weston. It's T-e-d
7 W-e-s-t-o-n.
8 Q And by whom are you employed?
9 A I'm employed by Rocky Mountain Power as a
10 regulatory affairs manager for the State of Idaho.
11 Q Mr. Weston, do you have any corrections to
12 your prefiled testimony?
13 A Yes, I do. I have one additional
14 correction. On page 9 of my testimony, line No. 4 refers
15 to Exhibit NO.1. That should read Exhibit No 29.
16 Q And is there another reference to Exhibit
17 1 further in that paragraph?
18 A No.
19 Q I must have an earlier version.
A No.
MR. SOLANDER: Sorry about that. We have
22 no further questions for Mr. Weston subj ect to the
23 Commission's further examination.
24
25
COMMISSIONER KEMPTON: Okay, thank you,
Mr. Solander. Are there any questions from the
CSB REPORTING
[phone]
8 WESTON (Di)
Rocky Mountain Power
.
.
.
1 Commission?
2 COMMISSIONER REDFORD: Yes, I have one
3 question.
4
5 EXAMINATION
6
7 BY COMMISSIONER REDFORD:
8 Q This is the first time that I've
9 participated in a case that involves the black box and it
10 kind of threw me a little bit, so I'm going to ask you a
11 few questions. First of all, if the rates that are
12 allowed in the stipulation were in effect in the year
13 2007 or, for that matter, 2008, do you have any idea what
14 your revenue requirements and/or your return on equity
15 would have been?
16 A Yes, a rough estimate of what it would
17 have been. The Company's application was based on
18 calendar year 2007, historical data, and based on that
19 usage, if we added the proposed settlement amount of
20 $4,380,000 of additional revenues, that would increase
21 the Company's earnings just under 100 basis. 100 basis
22 points in the State of Idaho is about $4.5 million. The
23 Company's application demonstrated that it was earning
24 6.5 percent in the State of Idaho, I believe, so if we
25 added the additional $4.4 million from this stipulation
CSB REPORTING
[phone]
WESTON (Com)
Rocky Mountain Power
9
.
.
.
20
21
1 as proposed by the parties, the overall return on equity
2 for the State of Idaho would be approximately 7.5
3 percent.
4 Q Still under your authorized return on
5 equity?
6 A Yes, significantly below that.
7 Q Just one other question. Notwithstanding
8 the fact that 2007 was your test year, the events of the
9 last few months have been quite dynamic and I'm wondering
10 if you've done any calculations as to the impact of these
11 dynamic times regarding finances, you know, property,
12 anything that you've done, just give me an opportunity to
13 see how much in the hole they are, if they are.
14 A I personally haven't prepared any
15 calculations.I know I'm aware that the Company has
16 taken the downturn in the economy into consideration and
17 while we don't see an overall reduction in our load, the
18 downturn has definitely slowed the growth proj ected by
19 the Company in the future years.
Q Has it also slowed the usage of power in
Idaho? Are people I guess the question is are people
22 trying more to conserve or is your demand side management
23 program affecting the amount of power used by your
24 customers in Idaho?
25 A Yes, we believe that our demand side
CSB REPORTING
[phone]
10 WESTON (Com)
Rocky Mountain Power
.
.
.
19
1 programs are effective in encouraging customers to use
2 energy more wisely, but even with those efforts of the
3 Company and our customers to curb their usage, for 2008
4 we still experienced just over a one percent increase in
5 our usage in the State of Idaho.
6 Q And that one percent is less than previous
7 numbers for other years?
8 A It is down. Idaho has typically averaged
9 between one-and-a-half and two percent growth per year
10 over the last few years.
11 Q In reading the stipulation, it appears
12 that you settled fairly rapidly and, again, I want to get
13 back to these economic times. Do you have a bond or a
14 credi t rating or does your money come from your parent
15 company?
16 A It comes through the parent company.
17 Q So whatever the rating is, it's not very
18 significant to Rocky Mountain Power?
A Well, certainly, Rocky Mountain Power's
20 earnings are taken into account in the development of
21 that.
22 Q Well , it seems to me that given the times
23 and given your application and the stipulation, which
24 your application was done before it really hit the
25 bottom, would you say that this, these rates and this
CSB REPORTING
[phone]
11 WESTON (Com)
Rocky Mountain Power
.
.
.25
1 return and your revenue requirement and return on equity
2 probably are not sufficient to put the Company back to
3 its authorized rate of return and its return on equity,
4 in other words, still in the hole?
5 A That's correct. I would point out one of
6 the nuances in this case was because of the service
7 agreement that Rocky Mountain Power has with its two
8 large industrial customers, Monsanto and Agrium, the
9 revenue requirement associated with those customers was
10 not impacted by this case.
11 Q Is there some reason that you excluded
12 Monsanto and Agrium? I guess that's how you pronounce
13 it.
14 A Yes. In the last case that Rocky Mountain
15 Power had before the Commission, Case PAC-E-07-05, the
16 Company entered into an agreement with the parties, with
17 Monsanto and Agrium, for a three-year service agreement.
18 Those parties received an increase as part of that
19 service agreement effective January 1 of each year from
20 '08,' 09 and 2010 until the end of that service agreement
21 which is December 31st, 2010.
22 COMMISSIONER REDFORD: Okay, I appreciate
23 that. I have no further questions for you, Mr. Weston.
24 COMMISSIONER KEMPTON: Commissioner Smith.
COMMISSIONER SMITH: Thank you, just a
CSB REPORTING
[phone]
12 WESTON (Com)
Rocky Mountain Power
.
.
.
1 couple.
2
3 EXAMINATION
4
5 BY COMMISSIONER SMITH:
6 Q On page 3 of your testimony, Mr. Weston,
7 you note that the Company has requested an April 18th
8 effective date for the changed rates and I noted that
9 today is March 11th and this could theoretically be done
10 long before April 18th, so are you still sticking with
11 that date or do you want it for administrative reasons or
12 do you want it earlier, if possible, or is that your
13 date?
14 A We would certainly accept an earlier
15 effecti ve date.The April 18th date was just based on
16 the Company's original application and the time lines
17 from when we filed.
18 Q Okay, thank you.On page 6 of your
19 testimony at line 10, I note that you're talking about
20 the 3.1 percent revenue requirement increase to
21 non-contract customers and that almost seems to
22 correspond to the 3 percent, I think it was, increase
23 that Monsanto and Agrium both experienced on January 1st.
24
25
A That's correct.
Q So under the terms of their agreements,
CSB REPORTING
[phone]
13 WESTON (Com)
Rocky Mountain Power
.
.
.
20
1 their rates are actually just sort of keeping pace with
2 what's happening to the tariffed customers?
3 A That's correct.
4 Q In response to a question by Commissioner
5 Redford, you talked about a one percent usage in Idaho,
6 one percent increase in usage in Idaho, and was that on a
7 per customer basis or is that just an overall load?
8 A That was just the overall load in the
9 state.
10 Q Do you keep track of whether customers on
11 a per customer basis are increasing or decreasing their
12 usage?
13 A I'm not aware of that information.
14 Q All right, thank you, and on page 7 of
15 your testimony, you discuss the proposal in the
16 stipulation of a funding allocation to Community Action
17 Partnership Association of Idaho of $50,000.Do you see
18 that testimony?
19 A Yes, I do.
Q And when you provide that money to them,
21 will that be -- it's my recollection that your service
22 area in Idaho is kind of interspersed among a number of
23 public power entities, cities and co-ops.
24
25
A That's correct.
Q And I don't know if these Community Action
CSB REPORTING
[phone]
14 WESTON (Com)
Rocky Mountain Power
.
.
20
1 Partnerships, do they service, then, perhaps a population
2 that includes customers or people that are not customers
3 of Rocky Mountain Power?
4 A No, the agreement was that that money
5 would be provided to the Community Action Partnership who
6 would allocate that between -- Rocky Mountain Power has
7 two groups in our service terri tory, the Southeast Idaho
8 Action program and
9 Q But those aren't actually Rocky Mountain
10 Power groups?
11 A No, they're groups associated with the
12 Communi ty Action fund that administers those programs in
13 Rocky Mountain Power's service terri tory.
14 Q Okay, I'LL ask Ms. Ottens whether they
15 administer more than your service terri tory.My
16 question mainly was is this money being used for your
17 customers or is there a broader group of people in
18 eastern Idaho who may benefit from this, but maybe I'll
19 ask her that, and I think my last question --
A Sorry, that was the Southeastern Idaho
21 Community Action Agency and the Eastern Idaho Community
22 Action Partnership.
23 Q Okay, thank you. On Exhibit 30, actually
24 Exhibit 29 and 30, you set out the rates for the.25 residential customers in your service area in Idaho; is
CSB REPORTING
[phone]
15 WESTON (Com)
Rocky Mountain Power
.
.
.
1 that correct?
2
3
A Yes.
8
9
10 A
Q And can you tell me what percentage of
11 Q
4 your Idaho customers take off of Schedule 1 as compared
5 to what percentage take off the optional time of day
6 tariff? I mean, just a ball park. Do most people take
7 Schedule 36 or are most people on Schedule 1?
A Most of them are on Schedule 1.
13 A
Q One?
14
15
Yes.
And the rate for Schedule 1 is, it's over
12 nine cents a kilowatt-hour, isn't it?
Yes.
COMMISSIONER SMITH: Pretty high.That's
all the questions I have.Thank you.
Q
17 Commissioner Smith.
COMMISSIONER KEMPTON: Thank you,
18
19
20
16
EXAMINATION
21 BY COMMISSIONER KEMPTON:
22 Mr. Weston, one last question from me
23 sort of to formally remove the mysticism of the black box
24
25
concept in the settlement.All of the intervenor
testimony and your own prefiled testimony are clear in
CSB REPORTING
[phone]
16 WESTON (Com)
Rocky Mountain Power
.
.
20
21
22
1 terms of the general agreement on revenue requirement,
2 but I wondered if you would just please address the
3 general concept of the black box as you see it and as was
4 exercised during the course of negotiations with the
5 other intervenors.
6 A Certainly.I think the general concept
7 as understood by the Company and the parties was as the
8 parties met to negotiate a settlement, each individual
9 party had different adjustments or positions in mind and
10 while the group as a whole was not able to reach an
11 agreement on which adjustments and at what level were
12 appropriate, each party was able to reconcile in their
13 own positions a comfort level that the overall agreement
14 was a reasonable outcome to the case.
15 COMMISSIONER KEMPTON: Okay, any other
16 questions?
17 COMMISSIONER REDFORD: No.
18 COMMISSIONER KEMPTON: Mr. Weston, you're
19 excused.
THE WITNESS: Thank you.
(Pause in proceedings.)
COMMISSIONER KEMPTON: Commissioner Smith
23 advises me -- if it hasn't come to your attention yet,
24 this is actually my first rate case hearing and so the.25 procedures are a little bit foreign to me having been a
CSB REPORTING
[phone]
17 WESTON (Com)
Rocky Mountain Power
.
.
.
1 legislator prior to the time that I've taken this
2 position, so, Mr. Solander, do you have any concluding
3 remarks, questions?
4 MR. SOLANDER: I had one redirect question
5 for Mr. Weston if that would be okay.
6 COMMISSIONER KEMPTON: Absolutely,
7 Mr. Solander.
8
9 REDIRECT EXAMINATION
10
11 BY MR. SOLANDER:
12 Q Mr. Weston, does the Company believe that
13 the stipulation represents a fair, just and reasonable
14 compromise of the issues and is in the public interest?
15 A Yes, it does. The Company, as I
16 mentioned, the Company believes that its filed position
17 of a $5.9 million increase was justified. The Company
18 has made significant investment over the last couple of
19 years to meet the service requirements of our customers.
20 Since about 2006, the Company has invested over $2
21 million in new generation resources bringing
22 approximately 1,600 megawatts of additional natural gas
23 resources on line and 760 megawatts new wind resources.
24 In addition, as you mentioned, the Company has increased
25 its focus on demand side management programs to encourage
CSB REPORTING
[phone]
18 WESTON (Di)
Rocky Mountain Power
.
.
.
20
1 efficient use of energy in the state and one of the large
2 areas is with our -- with Idaho Irrigation Pumpers
3 Association where they've increased the dispatchable
4 program from approximately 50 megawatts under control to
5 over 200 megawatts of load currently under control, so
6 the Company has made a conscientious, focused effort to
7 control costs and invest to meet our customers' needs.
8 At the same time, we recognize the impact
9 that increasing rates has on our customers and are making
10 significant efforts to try to control those costs and
11 minimize them as much as we possibly can while assuring
12 that we provide safe, adequate and reliable service to
13 our customers, so in an effort, as I mentioned earlier,
14 to reach an overall agreement amongst parties, the
15 Company negotiated with the other parties in good faith
16 to reach an overall settlement of $4.4 million which we
17 believe is just, reasonable and in the public interest.
18 MR. SOLANDER: Thank you, Chairman
19 Kempton.That's all I have.
MR. WOODBURY: Mr. Chairman, may I ask a
21 clarifying question for purposes of the record?
22
23
24
25
COMMISSIONER KEMPTON: You may.
CSB REPORTING
[phone]
19 WESTON (Di)
Rocky Mountain Power
.
.
.
1 CROSS-EXAMINATION
2
3 BY MR. WOODBURY:
4 Q Mr. Weston, prefiled on behalf of the
5 Company was your stipulation testimony and that was
6 consisting of 11 pages and three exhibits of 29, 30 and
7 31?
8 A Yes.
9 Q And apart from the corrections to that
10 testimony made under questioning from Mr. Solander, if
11 the questions were asked, would your answers be the
12 same?
13 A Yes, they would.
14 MR. WOODBURY: Thank you. Nothing
15 further.
16 THE WITNESS: And I would like to just add
17 one additional comment maybe to Commissioner Smith. She
18 noted that our energy rate to Residential 1 was a little
19 over nine cents, you know, when you look at rates, you
20 have to look at all components.Rocky Mountain Power is
21 unique in Idaho in that we don't have a demand charge for
22 our customers and if that was taken into account, it
23 would lower the overall energy rate, so that's one area
24 in which as part of the stipulation, the Company
25 committed to look at tiered rates in the next option.
CSB REPORTING
[phone]
20 WESTON (X)
Rocky Mountain Power
.1 While the Company does have a customer charge that's
2 $10.00 for the first 100 kilowatt-hours of usage, the
3 combination of those two needs to be taken into account
4 when looking at the overall rates.
5 COMMISSIONER KEMPTON: Commissioner Smith.
6
7 EXAMINATION
8
9 BY COMMISSIONER SMITH:
10 Q So the customer charge is $10.00 a month,
11 so is that more like a minimum bill?
12 A It's a minimum bill..13 Q It includes some usage?
14 A For the first 100 kilowatt-hours.
15 Q And do you know of any residential
16 customers who pay a demand charge?
17 A No, but there are service charges.
18 COMMISSIONER SMITH: Thank you very
19 much.
20 COMMISSIONER KEMPTON: Mr. Solander.
21 MR. SOLANDER: I believe Commissioner
22 Smi th 's question covered what I was going to respond
23 with.
24 COMMISSIONER KEMPTON: Okay, Mr. Weston,.25 you may be excused.
CSB REPORTING
[phone]
21 WESTON (Com)
Rocky Mountain Power
.1
2
3
4
THE WITNESS: Thank you.
(The witness left the stand.)
(Pause in proceedings.)
COMMISSIONER KEMPTON: The Chair notes
5 that the prefiled testimony of Mr. Weston will be spread
6 on the record as if read.
7 (The following prefiled testimony of Mr.
8 J. Ted Weston is spread upon the record.)
.
.
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
9
CSB REPORTING
[phone]
22 WESTON (Com)
Rocky Mountain Power
.
.
1 Q.Please state your name, business address and
2 present position with Rocky Mountain Power (the
3 "Company"), a division of PacifiCorp.
4 A.My name is J. Ted Weston and my business
5 address is 201 South Main, Suite 2300, Salt Lake City,
6 Utah, 84111. I am currently employed as the Manager of
7 Idaho Regulatory Affairs for the Company.
8 Qualifications
9 Q.Briefly describe your educational and
10 professional background.
11 A.I received a Bachelor of Science Degree in
12 Accounting from Utah State University in 1983. I joined
13 the Company in June of 1983 and I have held various
14 accounting and regulatory positions prior to my current
15 position. In addition to formal education, I have
16 attended various educational, professional and electric
17 industry related seminars during my career with the
18 Company.
19 Q.What are your responsibilities as Manager of
20 Regulatory Affairs?
21 A.My primary responsibilities include the
22 coordination and management of Idaho regulatory filings,
23 communications with the commission and staff, and
24 oversight of reporting requirements for the Company with.25 the Idaho Public Utilities Commission.
23 Weston, Stip - 1
Rocky Mountain Power
.
.
20
21
22
23
24.25
1 Q.Have you testified in previous regulatory
2 proceedings?
3 A.Yes. I have testified before the Washington
4 Transportation and Utilities Commission and the Wyoming
5 Public Service Commission.
6 Purpose of Tes timony
7 Q.What is the purpose of your testimony in this
8 proceeding?
9 A.The purpose of my testimony is to present and
10 support the Stipulation in the
11
12 /
13
14 /
15
16 /
17
18
19
24 Weston, Stip - 1a
Rocky Mountain Power
.
.
.
1 Company's 2008 general rate case entered into by and
2 among Rocky Mountain Power, a division of PacifiCorp
3 ("Rocky Mountain Power" or the "Company"); Staff for the
4 Idaho Public Utilities Commission (" Staff"); the Idaho
5 Irrigation Pumpers Association, Inc. (" IIPA"); and the
6 Communi ty Action Partnership Association of Idaho
7 ("CAPAI"), collectively referred to in my testimony as
8 the Parties.I will provide an overview of the Company's
9 2008 Idaho rate case and an explanation of the terms and
10 condi tions of this Stipulation. I will also demonstrate
11 that this Stipulation represents a fair, just and
12 reasonable compromise of the issues in this proceeding
13 and that this Stipulation is in the public interest. My
14 testimony supports the Company's recommendation that the
15 Idaho Public Utilities Commission ("Commission") approve
16 the Stipulation and all of its terms and conditions.
1 7 Background
18 Q.What price increase did the Company request in
19 this case?
20 A.On September 19, 2008, Rocky Mountain Power
21 filed an Application seeking authority to increase the
22 Company's base rates, excluding the current service
23 agreement with Monsanto and Agrium, for electric service
24 by $5.9 million annually, which represented an average
25 increase of approximately 4.0 percent. Rocky Mountain
25 Weston, Stip - 2
Rocky Mountain Power
.
10
11 /
12.13
. 25
1 Power sought a rate effective date of October 19, 2008.
2 The Application did not include changes to the
3 rates charged by Rocky Mountain Power to Monsanto or
4 Agrium. The rates for these two customers are subject to
5 the stipulation filed in Case No. PAC-07-05 approved by
6 the Commission in Order 30482. Monsanto and Agrium
7 recei ved a three percent
8
9 /
/
14
15
16
17
18
19
20
21
22
23
24
26 Weston, Stip - 2a
Rocky Mountain Power
.1 price increase on January 1, 2009 as a result of that
2 stipulation and order.
3 On October 3, 2008 the Commission suspended the
4 rates that were the subj ect of the Application for a
5 period of thirty (30) days plus five (5) months making
6 the rate effective date April 18, 2009. Parties to the
7 Stipulation did not propose revising this date and the
8 Company is respectfully requesting that the Commission
9 approve this Stipulation with April 18, 2009 as the rate
10 effective date.
11 As part of Staff's audit of this Application
12 several meetings were held with Company representatives.13 during the weeks of October 27th through the 31st in
14 Portland, Oregon and November 10th through the 14th in
15 Salt Lake City, Utah. In addition hundreds of discovery
16 requests were asked and responded to.
1 7 Representatives of the intervening parties,
18 (with the exception of Agrium) met on January 15, 2009
19 wi th the Company at the Commission's office, pursuant to
20 IDAPA 31.01.01.271 and 272, to engage in settlement
21 discussions with a view toward resolving the issues
22 raised in Rocky Mountain Power's Application in this
23 proceeding. Based upon the discussions between the
24 Parties, as a compromise of the positions in this.25 proceeding a settlement was reached.
27 Weston, Stip - 3
Rocky Mountain Power
.
10 /
11
12 /.13
14
.
1 Test Period
2 What Test Period did the Company use toQ.
3 determine revenue requirement in this case?
4 The Test Period for this Application was basedA.
5 on the historical twelve-month period ending December 31,
6 2007, adj usted for known and measurable changes through
7 December 31, 2008.The Test Period was prepared
8 consistent with past
9
/
15
16
17
18
19
20
21
22
23
24
25
28 Weston, Stip - 3a
Rocky Mountain Power
1 Commission practice and the Company's general rate cases.2 filed previously in Idaho. Due to the significant
3 capital investment being made and the regulatory lag
4 associated with i t relative to the Idaho test year
5 conventions, the Company relied on and included rate base
6 on an end-of-period basis.
7 Q.What guided the development of the Test Period
8 in this case?
9 A.The primary obj ecti ve in determining the Test
10 Period was to develop normalized result of operations
11 which best reflect the conditions during which time the
12 new rates will be in effect. The Company relied on.13 historical data with known and measurable events to
14 reflect as closely as possible the rate effective period
15 that will exist in 2009.
16 To partially overcome the effect of regulatory
17 lag, the Company filed rate base on an end-of-period
18 basis. Actual rate base at December 31, 2007 plus maj or
19 capital additions planned to go into service by December
20 31, 2008. Adjusting to end-of-period rate base provides
21 more certainty while reducing the recovery lag associated
22 wi th the Company's significant capital investment. All
23 of these capital additions were in service and used and
24 useful prior to the anticipated date of the price change.25 associated with this rate case.
29 Weston, Stip - 4
Rocky Mountain Power
.
10
11 /
12.
.
1 Q. How do the rate base and net power costs
2 included in the Company's filing compare to actual
3 results through December 31, 2008?
4 As noted in the direct testimony of Mr. A.A.
5 Richard Walj e the Company's requested rate increase was
6 dri ven by two key factors: first, the Company is in the
7 midst of an unprecedented, and necessary capital
8 investment cycle; and second, rising costs of fuel and
9 purchased power to serve our customers.
13 /
14
15 /
16
17
18
19
20
21
22
23
24
25
30 Weston, Stip - 4a
Rocky Mountain Power
.
.
1 On a total -Company basis, the Company's
2 Application included gross electric plant in-service
3 balance of $17.4 billion. The actual balance at December
4 31, 2008 was $18.2 billion, $800 million higher than
5 requested in the Application. This additional capital
6 would increase Idaho's revenue requirement approximately
7 $7.5 million.
8 Net power costs continue to trend upward,
9 remain volatile, and are one of the primary cost drivers
10 in this general rate case. On a total-Company basis, net
11 power costs in this application were $982 million during
12 the test year, an increase of more than $120 million
13 above the level supported by the Company in the 2007
14 general rate case. Actual net power costs for the twelve
15 months ended December 31, 2008 were approximately $1.1
16 billion, $118 million higher than the amount included in
17 the case. Absent some sort of power cost adj ustment
18 mechanism the use of historic test periods for ratemaking
19 under the current industry conditions, combined with the
20 volatility of the market and fuel prices and uncertainty
21 of generation resources , results in persistent
22 under-recovery of the actual level of power costs
23 incurred during the period that rates are in effect.
24 Terms of the Stipulation.25 Q.Please describe the terms of the stipulation
31 Weston, Stip - 5
Rocky Mountain Power
.
10 /
11
12 /.
.
1 entered into by the Parties.
2 A. While the Parties to the stipulation agreed
3 that this would be a "black box" settlement with no party
4 accepting a specific methodology for the revenue
5 requirement determination, the Stipulation did identify
6 eight specific items that I will address in my testimony.
7 First, the Parties agreed to support an overall
8 revenue requirement increase
9
13
14 /
15
16
17
18
19
20
21
22
23
24
25
32 Weston, Stip - 5a
Rocky Mountain Power
.
.
.
1 in this case of $4.8 million, excluding the contract
2 customers, before grossing that amount up to produce a
3 total Idaho revenue requirement. Parties to the
4 stipulation agreed that the $4.8 million would be divided
5 by 36.0553 percent, (the ratio of non-contract to
6 contract customers cost of service from page 2 of Rocky
7 Mountain Power's Exhibit 20 from the Company's direct
8 testimony) to get to an Idaho total revenue requirement
9 increase of $13,312,883.
10 Second, the Parties agreed not to make any
11 adjustments to the Company's Cost of Service analysis.
12 The $13,312,883 increase to Idaho's revenue requirement
13 was input into Staff's cost of service model to run the
14 class allocation. This produced a $4.38 million or a 3.1
15 percent revenue requirement increase to non-contract
16 customers , resulting in approximately a $1.5 million
17 reduction to the Company's original request.
18 Third, the Parties agreed to establish the
19 total Company base net power cost level being recovered
20 in rates as a result of this Stipulation at $982 million,
21 as filed in the Application and associated testimony in
22 this Case, which will be necessary for calculation
23 purposes in Rocky Mountain Power's currently pending
24 Application for approval of an Energy Cost Adjustment
25 Mechanism in Case No. PAC-E-08-08, if such a mechanism is
33 Weston, Stip - 6
Rocky Mountain Power
.
10
11 /
.
.
1 established and approved by the Commission.
2 Fourth, the Parties agreed that Rocky Mountain
3 Power's acquisition of the Chehalis generating plant in
4 Chehalis, Washington was a prudent decision and in the
5 public interest, and costs related to the plant
6 acquisi tion and operation included in this case are
7 reasonable and are included in the Company's rates.
8
9 /
12
13 /
14
15
16
17
18
19
20
21
22
23
24
25
34 Weston, Stip - 6a
Rocky Mountain Power
.
.
.
1 Fifth, the Parties agreed that the Company had
2 complied with Commission Order No. 30543 to "provide the
3 information necessary for a prudency determination in its
4 next general rate case." The Parties agree that the
5 demand-side management programs proposed by Rocky
6 Mountain Power in Case No. PAC-E-08-01 are prudent.
7 Sixth, the Parties agreed that a total of
8 $50,000 of demand-side management program funds will be
9 made available to SouthEastern Idaho Community Action
10 Agency and Eastern Idaho Community Action Partnership to
11 be used to support conservation education as a component
12 of Rocky Mountain Power's low income weatherization
13 program (Schedule 21). Parties agree that it is the
14 responsibili ty of the Community Action Partnership
15 Association of Idaho to propose said education program to
16 Rocky Mountain Power by May 1, 2009. Community Action
17 Partnership Association of Idaho's proposal will contain
18 a funding allocation proposal of the $50,000 between the
19 two agencies, obj ecti ves and any savings estimates to
20 assist in program evaluations and reporting requirements.
21 The Parties agree that the low income weatherization
22 program (Schedule 21) and the conservation education
23 component of the program is in the public interest and is
24 determined to be cost-effective even though the explicit
25 quantification of benefits may not be possible, and
35 Weston, Stip - 7
Rocky Mountain Power
.
.
. 25
1 furthermore, the Parties agree to support the
2 justification and recovery of these costs through the
3 demand-side management surcharge funding.
4 Seventh, the Parties agreed that the issue
5 raised in Company testimony related to the Energy Trust
6 of Oregon Funding of the Goodnoe Hills wind
7
8 /
9
10 /
11
12 /
13
14
15
16
17
18
19
20
21
22
23
24
36 Weston, Stip - 7a
Rocky Mountain Power
.
.
23 /
24.25
1 generation plant will be deferred to Rocky Mountain
2 Power's next filed general rate case.
3 Eighth, Rocky Mountain Power agrees that it
4 will include an inverted tier rate design proposal or
5 option for residential customers in its next filed
6 general rate case for the Commission's consideration.
7 Ra te Spread
8 Q.Did the Stipulation specify how the $4.38
9 million revenue requirement increase would be spread
10 between customer classes?
11 A.Yes. The Parties agreed to calculate the rate
12 spread based on the ratio of Rocky Mountain Power's
13 requested revenue requirement increase of $5.87 million
14 to the settled revenue requirement increase of $4.38
15 million. This amount was ratably applied to Rocky
16 Mountain Power's original proposed price change by
17 customer class. Details of the rate spread are included
18 as Exhibit No. 29 of my testimony. A summary of the rate
19 spread is presented in the following table:
20
21 /
22
/
37 Weston, Stip - 8
Rocky Mountain Power
1 Rate Spread Comparison.2
Customer Class Proposed _Settled
3 Residential -Schedule 1 4.73%3.53%Residential -Schedule 36 4.73%3.53%
4 General Service
Schedule 23/23A 0%0%
5 Schedule 6/6A/8/35 7.96%5.94%Schedule 9 7.96%5.94%
6 Schedule 19 2.31%1. 73%Irrigation
7 Schedule 10 2.31%1. 73%Public Street Lighting
8 Schedules 7/7A,11,12 0%0%
9
10 /
11
12 /.13
14 /
15
16
17
18
19
20
21
22
23
24.25
38 Weston, Stip - 8a
Rocky Mountain Power
.
.
.
1 Q. Why does the rate spread filed with the
2 Stipulation differ slightly from Exhibit No. 29?
3 A.The rate spread filed in the Stipulation and in
4 this table are composite rates consolidating one or more
5 rate schedules. Exhibi t No. 29 lists individual rate
6 schedules which may differ from the composite rates
7 listed in the Table. The price change by customer class
8 in the rate spread filed in this table is the same as
9 provided in the Stipulation, which equals the composite
10 of the price change by customer class in Exhibit No. 29.
11 Q.Is the rate spread proposed in the stipulation
12 consistent with Company witness Mr. Michael J.
13 Zimmerman's direct testimony?
14 A. Yes. The Company proposed in Mr. Zimmerman's
15 testimony to follow the cost of service results with the
16 caveat that no rate schedule receive an increase of more
17 than two times the overall average increase and that no
18 rate schedule receive a price decrease. As shown in
19 Exhibit No. 29, the overall average increase to
20 non-contract customers is 3.1 percent. Consistent with
21 Mr. Zimmerman's direct testimony and as a result of this
22 settlement, Exhibit No. 29 confirms that no customer
23 class will receive an increase more than two times the
24 overall average and that no customer class will receive a
25 price decrease.
39 Weston, Stip - 9
Rocky Mountain Power
.
.
.
14
15
16
17
18
19
20
21
22
23
24
25
1 Rate Design
2 Q. Did the Stipulation address rate design?
3 A.Yes. Paragraph 12 under Section III, Terms of
4 the Stipulation, states, "Parties agree that the design
5 of rates by rate schedule (rate design) shall be
6 consistent with the Company's filed proposals as adj usted
7 for the revenue requirement in
8
9 /
10
11 /
12
13 /
40 Weston, Stip - 9a
Rocky Mountain Power
.
.
.
1 this settlement."
2 Billing Determinants
3 Q.Please explain Exhibit No. 30.
4 A.Exhibi t No. 30 details the billing determinants
5 used in preparing the pricing proposals in this
6 Stipulation. It shows billing quanti ties and prices at
7 present rates and proposed rates based on the
8 Stipulation.
9 Monthly Billing Comparisons
10 Q.Please explain Exhibit No. 31.
11 A.Exhibit No. 31 details the customer impacts of
12 the Company's proposed' pricing changes. For each rate
13 schedule, it shows the dollar and percentage change in
14 monthly bills for various load and usage levels.
15 Q.How will the Stipulation impact residential
16 customers?
17 A.For residential customers (Schedules 1 and 36),
18 the Monthly Billing Comparisons show that the Company's
19 rate design proposals produce uniform percentage impacts
20 across usage levels. Idaho's average residential
21 customer on Schedule 1 uses 850 kWh a month. At that
22 usage level residential customers would experience a
23 $3.09 increase per month to their summer bills and $2.38
24 per month to their winter bills.
25 Conclusion
41 Weston, Stip - 10
Rocky Mountain Power
.
10
11 /
12.
.
1 Q. Does the Company believe the Stipulation
2 represents a fair, just and reasonable compromise of the
3 issues and is in the public interest?
4 Yes. All Parties to the Stipulation believeA.
5 they negotiated in good faith to reach a reasonable
6 outcome. The Company believes that its initial request
7 of $5.9 million
8
9 /
13 /
14
15
16
17
18
19
20
21
22
23
24
25
42 Weston, Stip - lOa
Rocky Mountain Power
1 was justified to meet the cost of serving the.2 non-contract customers in Idaho. As pointed out the two
3 dri ving factors of the Company's rate case, capital
4 addi tions and net power costs, for the twelve months
5 ended December 2008 are at levels significantly higher
6 than the Company requested in this Case. However, in an
7 effort to reach an agreement with Parties, the Company
8 was willing to reduce that request and stipulate to a
9 $4.4 million price increase. This Stipulation reduces
10 the Company's requested revenue requirement increase by
11 approximately twenty-five percent. The Stipulation
12 should also allow the Company to maintain its current.13 level of earnings and continue to be an excellent
14 provider of energy services in Idaho. Rocky Mountain
15 Power has continued to procure demand-side as well as
16 supply-side resources. These resources represent
17 significant investment the Company is making on behalf of
18 its customers to meet their energy needs on a prudent and
19 cost-effective basis. Customers will benefit from these
20 efforts during the rate-effective period and, therefore,
21 should pay the costs associated with these resources.
22 The Company has been prudent in securing resources for
23 the benefit of its Idaho customers and should be granted
24 cost recovery'. The Company will continue to work to.25 control its costs while implementing mechanisms and
43 Weston, Stip - 11
Rocky Mountain Power
.
10 /
11
.
.
1 pricing proposals to help customers use electricity more
2 efficiently. For these reasons the Company supports the
3 Stipulation entered into and requests that the Commission
4 approve it as filed.
5 Does this conclude your direct testimony?Q.
6 A.Yes.
7
8 /
9
12 /
13
14
15
16
17
18
19
20
21
22
23
24
25
44 Weston, Stip - 11a
Rocky Mountain Power
.1
2 open hearing.)
(The following proceedings were had in
COMMISSIONER KEMPTON: So, Mr. Woodbury,
4 would you introduce your witness?
3
5 MR. WOODBURY: Thank you. Staff would
6 call Randy Lobb to the stand.
7
8 RANDY LOBB,
9 produced as a witness at the instance of the Staff,
10 having been first duly sworn, was examined and testified
.
11 as follows:
12
13
14
15 BY MR. WOODBURY:
16 Q
DIRECT EXAMINATION
Mr. Lobb, will you please state your full
17 name for the record?
18 A My name is Randy Lobb.
How do you spell your last name?
L-o-b-b.
And for whom do you work and in what
23 A I work for the Idaho Public Utilities
19 Q
24 Commission. I am the administrator of the utili ties.
20 A
21 Q
22 capaci ty?
25 division.
CSB REPORTING
[phone]
45 LOBB (Di)Staff
.
.
.
20
21
22
23
1 Q And in that capacity did you assign Staff
2 to oversee case development and direct Staff in its
3 investigation of PacifiCorp' s proposed rate increase?
4 A Yes, I did.
5 Q And in your capacity as director of the
6 utili ties division, did you have responsibility for
7 coordinating Staff settlement negotiations with
8 PacifiCorp and other intervening parties?
9 A Yes.
10 Q And have you reviewed the settlement
11 documents that have been presented in this case?
12 A Yes, I have.
13 Q And do the terms accurately and completely
14 reflect Staff's agreement?
15 A Yes, they do.
16 Q And have you prepared and filed testimony
17 and exhibits in support of the stipulation consisting of
19 pages and two exhibits,Exhibits 101 and 102?
A Yes,I have.
Q And have you reviewed the testimony and
exhibits and is it necessary to make any changes?
18
19
A I have no corrections to the testimony.
Q And if I were to ask you the questions set
24 forth in the testimony, would your answers be the same?
25 A Yes, they would.
CSB REPORTING
[phone]
46 LOBB (Di)Staff
.
.
.
1 MR. WOODBURY: Mr. Chairman, I would ask
2 that the testimony and exhibits be spread on the record
3 and I'd present Mr. Lobb for Commission questions.
4 COMMISSIONER KEMPTON: So ordered.
5 (The following prefiled direct testimony
6 of Mr. Randy Lobb is spread upon the record.)
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CSB REPORTING
[phone]
47 LOBB (Di)Staff
1 Q. Please state your name and business address for.2 the record.
3 A.My name is Randy Lobb and my business address
4 is 472 West Washington Street, Boise, Idaho.
5 Q.By who are you employed?
6 A.I am employed by the Idaho Public Utilities
7 Commission as Utilities Division Administrator.
8 Q.What is your educational and professional
9 background?
10 A.I received a Bachelor of Science Degree in
11 Agricultural Engineering from the University of Idaho in
12 1980 and worked for the Idaho Department of Water.13 Resources from June of 1980 to November of 1987. I
14 recei ved my Idaho license as a registered professional
15 Civil Engineer in 1985 and began work at the Idaho Public
16 Utilities Commission in December of 1987. I have
17 conducted analysis of utility rate applications, rate
18 design, tariff analysis and customer petitions. I have
19 testified in numerous proceedings before the Commission
20 including cases dealing with rate structure, cost of
21 service, power supply, line extensions, regulatory policy
22 and facility acquisitions. My duties at the Commission
23 currently include case management and oversight of all
24 technical Staff assigned to Commission filings..25 Q.What is the purpose of your testimony in this
CASE NO. PAC-E-08-07
02/25/09
48 LOBB, R.(DI) 1
STAFF
1 case?.2 A.The purpose of my testimony is to describe the
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 49 LOBB,R.(DI)1a
02/25/09 STAFF
.
.
.
1 process leading to the filed Stipulation (the Proposed
2 Settlement) and to explain the rationale for Staff's
3 support. In this case the Company is PacifiCorp as the
4 corporate entity doing business in Idaho as Rocky
5 Mountain Power. The Proposed Settlement is signed by
6 Rocky Mountain Power, the Idaho Irrigation Pumpers
7 Association, Community Action Partnership Association of
8 Idaho and Commission Staff. The Stipulation does not
9 impact or propose any changes to the rates of Monsanto or
10 Agrium, whose rates are controlled by a separate
11 Stipulation approved in 2007, Case No. PAC-E-07-5, Order
12 No. 30482.
13
14
Q.Please summarize your testimony.
A.Based on its review of Rocky Mountain Power's
15 rate case filing, a comprehensive audit of PacifiCorp
16 test year results of operations and consideration of
17 outstanding rate case issues, Staff believes that the
18 comprehensive Proposed Settlement is in the public
19 interest and should be approved by the Commission. The
20 Company originally proposed a revenue increase of $5.9
21 million for an overall revenue requirement increase to
22 Idaho's retail customers excluding Monsanto and Agrium of
23 4.0%. The Proposed Settlement provides an annual revenue
24 requirement increase of $4.38 million or 3.1% spread to
25 the various specified Idaho customer classes based on the
CASE NO. PAC-E-08-07
02/25/09
LOBB, R.(DI) 2
STAFF
50
1 Company's proposed cost of service..2 There are four primary issues that Staff
3 believes
4
5 /
6
7 /
8
9 /
10
11
12
13.14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 51 LOBB,R.(DI)2a02/25/09 STAFF
.
.
.
1 makes negotiated settlement a reasonable option in this
2 case. 1) Most test year expenses and investments have
3 already been reviewed and adjusted by five other state
4 jurisdictions served by PacifiCorp. 2) Expense and
5 investment adj ustments made on a PacifiCorp system level
6 trickle down to affected Idaho retail customers in this
7 case at only 2.1% of the original adj ustment. 3)
8 Multi-State Process (MSP) jurisdictional allocation
9 commi tments already limit the level of revenue
10 requirement increase that can be passed on to Idaho
11 retail customers. 4) The Stipulated Settlement approved
12 by the Commission in Case No. PAC-E-07 -5 contains the
13 following terms:
14 Wi th respect to the rate plans for 2008
through 2010 for Agrium and Monsanto,
the Company agrees that in any rate
filing during the terms of such rate
plans it will not seek to recover any
revenue shortfalls related to Agrium
and Monsanto from other Idaho customers
when compared to cost of service studies
in those filings. (Stipulation, c: 10).
.
15
16
17
18
19 The cost of service methodology proposed
by the Company in this proceeding will
remain in effect as the accepted
methodology through the maximum duration
of the rate plans for Agrium and Monsanto
which expire December 31, 2010.
(Stipulation, c: 11).
.
20
21
22
23 As a result of its audit and in preparation of
24 direct testimony, a variety of adj ustments to the
25 Company's proposed revenue requirement were identified by
CASE NO. PAC-E-08-07
02/25/09
52 (DI) 3
STAFF
LOBB, R.
1 Staff.Areas subj ect to adjustment included authorized.2 return on equity,
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 53 LOBB,R.(DI)3a
02/25/09 STAFF
.
.
.
1 plant additions, wind integration costs, renewable energy
2 credi t revenue, line loss effects, working capital and
3 taxes associated with AFUDC. Staff also investigated
4 costs associated with the acquisition of the Chehalis
5 generating plant, demand side management tariff rider
6 expenditures and possible residential rate design
7 options.
8 Staff evaluated each adjustment individually
9 and all of the issues in total to arrive at an overall
10 settlement that provides 26% less revenue than that
11 originally requested by the Company. If identified
12 errors and undisputed adj ustments in the Company's favor
13 are included, the Settlement represents a reduction of
14 more than 32%. Moreover, the resulting revenue
15 requirement reduction reflects nearly all of the
16 adjustments that Staff would have presented through
17 testimony for Commission decision.
18 In addition to the adjustments identified
19 above, many other issues were evaluated by Staff in its
20 review of the Company's filing. All issues were included
21 in settlement discussion in order to arrive at a
22 negotiated agreement that Staff believes is in the
23 overall best interest of Rocky Mountain Power customers.
24 As part of the Stipulation, Staff specifically
25 agreed on appropriate levels of net power supply costs,
CASE NO. PAC-E-08-07
02/25/09
54 LOBB, R.(DI) 4
STAFF
.
.
.
1 that acquisition and operating costs of Chehalis
2 generating plant were prudently incurred and should be
3 included in rates, that
4
5 /
6
7 /
8
9 /
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CASE NO. PAC-E-08-07
02/25/09
55 LOBB, R. (DI) 4a
STAFF
.
.
.
1 DSM expenditures made from the DSM tariff rider were
2 prudently incurred and that $50,000 in tariff rider funds
3 should be used to support energy conservation education
4 in conj unction with the existing low income
5 weatherization program. Staff also agreed that a rate
6 spread and rate design for each retail class based upon
7 the Company's original proposals as adj usted for the
8 lower revenue requirement were reasonable. A provision
9 in the Stipulation recommended by Staff commits Rocky
10 Mountain to address an inverted tiered rate design
11 proposal for the residential class in its next general
12 rate case.
13 The Stipulation
14 Q. What factors did the Commission Staff consider
15 before pursuing negotiated settlement?
16 A.Staff identified several issues early on in its
17 investigation that are unique to Rocky Mountain Power's
18 general rate case filing. The first issue deals with the
19 proformed 2007 historic test year proposed by the
20 Company. The historic and proformed expense and
21 investments included in the Company's filing have already
22 been thoroughly reviewed in various regulatory
23 proceedings in the five other state jurisdictions in
24 which PacifiCorp operates. As a result of this review,
25 most of the expenses and investments that might have been
CASE NO. PAC-E-08-07
02/25/09 56 LOBB, R.(DI) 5
STAFF
1 subj ect to adj ustment by Staff in this case have already.2 been removed by the Company.
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 57 LOBB,R.(DI)5a
02/25/09 STAFF
1 Once Staff does identify an adjustment on a.2 PacifiCorp system cost basis, it must be reduced to an
3 Idaho jurisdictional amount and then to an Idaho retail
4 cost of service amount. In other words, an adj ustment of
5 $1 million on a system basis is reduced to just $21,000
6 or only 2.1% of the original adjustment when fully
7 allocated to Idaho retail customers subj ect to a rate
8 increase in this case.
9 Another unique consideration when assessing the
10 Company's filing in this case is the effect of the MSP
11 cap on costs allocated to Idaho. When the Revised
12 Protocol allocation methodology was approved by the.13 Commission, it included a commitment until March 31,
14 2009, that costs allocated to Idaho under the new
15 methodology would not exceed 101.67% of the cost
16 allocation that would have occurred under the existing
17 Rolled-In allocation methodology (Order No. 29708). The
18 effect of this cap in the Company-filed case is to limit
19 costs allocated to Idaho by $3.1 million. For other cost
20 adjustments identified by Staff to have any effect, they
21 must exceed this level of costs already removed.
22 The final unique consideration in assessing the
23 merits of pursuing settlement in this case was the cost
24 of service provision in the Stipulation approved by the.25 Commission in Case No. PAC-E-07 -5. That provision
CASE NO. PAC-E-08-07
02/25/09
58 LOBB, R.(DI) 6
STAFF
1 prohibi ted a change in rate case cost of service.2 methodology during the approved three-year rate contract
3 period between Rocky
4
5 /
6
7 /
8
9 /
10
11
12
13.14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 59 LOBB,R.(DI)6a02/25/09 STAFF
.
.
.
1 Mountain and Monsanto/Agrium. Maintaining cost of
2 service methodology is necessary during the rate contract
3 period to assure costs are not inappropriately shifted
4 between customer classes as part of a general rate case.
5 Consequently, this provision takes modification to cost
6 of service methodology off the table in this case.
7 Q.What are the key components of the Proposed
8 "Black Box" Settlement described in the Stipulation?
9 A.The key components include: 1) an annual Idaho
10 revenue requirement increase of $4.38 million or 3.1%;
11 2) total Company base power supply costs of $ 982 million;
12 3) including Chehalis acquisition and operation costs in
13 rates as prudently incurred; 4) accepting demand side
14 management (DSM) program costs requested in this case as
15 prudently incurred; and 5) allocating $50,000 of DSM
16 tariff rider funds for education associated with low
17 income weatherization.
18 The Stipulation also covers a variety of other
19 issues including the Oregon Energy Trust and its funding
20 of wind proj ects, a residential tiered rate design
21 proposal to be provided by Rocky Mountain in its next
22 rate case and a revenue/rate spread to Idaho retail
23 customers based on the cost of service principles
24 proposed by the Company in its original filing. The
25 Stipulation is attached as Staff Exhibit No. 101.
.
CASE NO. PAC-E-08-07
02/25/09
60 LOBB, R.(DI) 7
STAFF
.
.
.
1 Q.What is meant by a "Black Box" Settlement?
2 A.The parties agreed that the Settlement
3 represents a "black box" in that the position of the
4 parties on individual issues and resulting revenue
5 adj ustments are not specifically identified. Rather, the
6 gi ve and take during negotiations on all issues resulted
7 in a single overall revenue requirement that was
8 satisfactory to all parties. For example, while cost of
9 equi ty was a subj ect of discussion, it was agreed that it
10 would not be specifically identified in the Stipulation.
11 Likewise, issues such as the treatment of revenues from
12 renewable energy credits, the cost of wind integration
13 and the calculation of cash working capital were all
14 considered as part of the overall settlement package.
15 However, there was no specific position or revenue
16 adj ustment for these issues included in the Stipulation.
17 General Settlement in this way provides for
18 compromise to arrive at a mutually acceptable revenue
19 requirement. It does not set a precedent that commits
20 any party to a specific position on an issue that might
21 be more fully addressed in the future.
22 Revenue Requirement
23 Q.How did Staff identify revenue requirement
24 issues and what were the primary considerations in
25 reaching agreement on the stipulated revenue requirement?
CASE NO. PAC-E-08-07
02/25/09
(DI) 8
STAFF
61 LOBB, R.
1 A.Staff identified issues in this case by.2 reviewing
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 62 LOBB,R.(DI)8a
02/25/09 STAFF
1 the Company's rate case filing, conducting a.2 comprehensi ve audit of Company test year results of
3 operations and reexamining issues, recommendations and
4 Commission Orders associated with the Company's last
5 general rate case, Case No. PAC-E-07-5. Staff identified
6 10 potential adjustments with annual revenue requirement
7 impacts ranging from $50,000 to over $2 million. Other
8 issues such as the Energy Cost Adjustment Mechanism
9 (ECAM) and associated net power supply cost, the Chehalis
10 generating plant, DSM expenditures, renewable energy
11 credi ts, cost allocation for the irrigation load control
12 program and rate design were discussed at the settlement.13 workshop and had value in the negotiation process.
14 Staff evaluated each of the issues identified
15 above to determine the associated revenue requirement
16 adj ustment, if any, and to develop the justification for
17 the position Staff would likely present in testimony.
18 Staff established an overall revenue requirement target
19 that it believed could be achieved with reasonable
20 certainty and then negotiated additional less certain
21 adjustments in conjunction with the likely Staff position
22 on various disputed issues to arrive at an overall
23 revenue requirement compromise.
24 Staff believes that the stipulated increase in.25 revenue requirement of 3.1%, or approximately $1.5
CASE NO. PAC-E-08-07
02/25/09
63 LOBB, R.(DI) 9
STAFF
1 million less than that originally proposed by the.2 Company,represents a reasonable settlement in this case.
3 This is particularly
4
5 /
6
7 /
8
9 /
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 64 LOBB,R.(DI)9a
02/25/09 STAFF
.
.
.
1 true when tax errors and undisputed adj ustments totaling
2 some $ 600,000 were identified during the negotiations
3 that would have increased the Company's original revenue
4 requirement request. Staff also believes that the $4.38
5 million proposed revenue increase recognizes the unique
6 characteristics of the Company's filing while balancing
7 the needs of both the Company and its customers. Staff
8 notes that the Proposed Settlement incorporates almost
9 all of the adj ustments that Staff would have recommended
10 in testimony.
11 Q.The Stipulation states that the parties agreed
12 to a revenue requirement increase of $4.8 million yet the
13 actual increase is only $4.38 million. How was the lower
14 increase derived?
15 A.The lower revenue requirement increase for
16 Idaho retail customers of $4.38 million was derived by
17 establishing an Idaho jurisdictional revenue requirement
18 and then reallocating the total to Idaho retail customers
19 (excluding Monsanto and Agrium). The methodology
20 approved by the parties begins with the $4.8 million
21 revenue requirement increase and then divides by the
22 36.0553%, which represents the Idaho jurisdictional cost
23 responsibility of retail customers. The resulting $13.31
24 million Idaho jurisdictional revenue requirement is then
25 reallocated to all Idaho customer classes using the
CASE NO. PAC-E-08-07
02/25/09
LOBB, R.(DI) 10
STAFF
65
1 Staff's cost of service model incorporating proposed.2 revenue requirement adj ustments.The result of the
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 66 LOBB,R.(DI)lOa
02/25/09 STAFF
.
.
.
1 methodology is an increase to the impacted Idaho retail
2 customer classes of $4.38 million. The difference
3 between $4.8 million and $4.38 million is the additional
4 Idaho jurisdictional costs that are allocated to Monsanto
5 and Agrium.
6 Return on Equity
7 Why was return on equity not specified in theQ.
8 Proposed Settlement?
9 Return on equity (ROE) was not specified in theA.
10 Stipulation as a compromise to recognize the significant
11 difference in party positions. The Company had proposed
12 a ROE of 10. 75% and Staff believed the current ROE of
13 10.25% was all that was warranted. Staff ultimately
14 determined that it was not necessary for the Stipulation
15 to specify return on equity if the overall revenue
16 requirement was deemed reasonable. To the extent return
17 on equity is required for other purposes such as avoided
18 cost and AFUDC calculations, Staff supports continued use
19 of the last authorized return on equity (10.25%). Order
20 No. 30482.
21 Net Power Supply Cost
22 Why were net power supply costs specificallyQ.
23 established in the Stipulation?
24 Staff reviewed the calculation of net powerA.
25 supply costs as provided in the Company's filing and
CASE NO. PAC-E-08-07
02/25/09
67 (DI) 11
STAFF
LOBB, R.
1 determined that annual costs of $982 million were.2 reasonable.Staff would
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 68 LOBB,R.(DI)11a
02/25/09 STAFF
1 not have necessarily proposed any adj ustment to the.2 amount if the case had proceeded to hearing. However,
3 the parties agreed that the Commission must establish
4 normalized net power supply costs in this case in order
5 to properly evaluate the merits of the Company's proposed
6 ECAM. Staff has not agreed at this time to the Company's
7 ECAM proposal nor has it agreed that an ECAM mechanism is
8 warranted for Rocky Mountain Power in Idaho.
9 Chehalis
10 Q.Why did Staff agree in the Stipulation to allow
11 cost recovery for the Chehalis generating plant?
12 A.As part of its rate case review, Staff.13 investigated the Company's proposal to include the
14 acquisi tion and operating cost of the Chehalis generating
15 plant in base rates. The plant is a 500 MW natural
16 gas-fired combined cycle generation facility acquired by
17 PacifiCorp on September 15, 2008.
18 During its investigation, Staff verified that
19 PacifiCorp' s 2007 Integrated Resource Plan (IRP)
20 identified a future deficit between the Company's
21 proj ected peak capacity needs and its resources available
22 to serve peak demand. In April 2007, the Company issued
23 a Request for Proposal (RFP) seeking up to 1,700 MW of
24 cost-effective base load resources to address the needs.25 identified in the IRP. The Chehalis plant was not bid
into that RFP; instead, it became available
CASE NO. PAC-E-08-07
02/25/09
69 LOBB, R.(DI) 12
STAFF
.1 for a limited time in the market, outside of the RFP
2 bidding process. The time limitations on the
3 transactions were such that the completion of an RFP
4 under the procurement guidelines and laws in Oregon and
5 Utah would have resulted in the loss of the opportunity
6 to purchase the Plant. As a consequence, waivers of the
7 RFP regulatory requirements were obtained from each of
8 those states. Reports prepared by three independent
9 evaluators - Merrimack Energy Group, Bodington & Company,
10 and Boston Pacific Company - were submitted in support of
11 the Company' s waiver requests in Oregon and Utah. Each
12 of those reports supported the Company's acquisition of.13 the Plant, and concluded that even though the Chehalis
14 Plant was not bid into the 2012 RFP, it likely would have
15 been selected over other bids that were submitted. Staff
16 thoroughly reviewed these reports as part of its analysis
17 in this case.
18 The Company has used data and models from its
19 2007 IRP, 2008 business plan and information regarding
20 the Plant obtained from the then current owner in
21 analyzing whether to acquire the Plant. The capitalized
22 purchase price of the Chehalis Plant was $305 million, or
23 $610 per kW, not including the capitalization of the
24 legal and consulting costs and site licensing costs. The.25 resul ts of the Company's analysis show that acquisition
CASE NO. PAC-E-08-07
02/25/09
70 LOBB, R.(DI) 13
STAFF
1 of the Plant on the terms and conditions in the Purchase.2 and Sale Agreement reduces present
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 71 LOBB,R.(DI)13a
02/25/09 STAFF
1 value revenue requirement of the Company's portfolio by.2 about $142 million to $197 million versus a comparable
3 alternative resource from the 2012 RFP with an estimated
4 cost of $1,000 per kW to $1,150 per kW. Staff concurs
5 with the Company's analysis and believes that the
6 Company's customers are better off through acquisition of
7 the Plant now than acquisition of a similar resource in
8 2012 based on market pricing and responses to the 2012
9 RFP.
10 Based on its own analysis and a review of the
11 Company's analysis, Staff concludes that acquisition of
12 the Chehalis Plant is in the public interest and provides.13 a favorably-priced, flexible resource that will assist
14 the Company in meeting the resource needs of its
15 customers at the lowest reasonable cost.
16 Demand Side Management
17 Q.Why did Staff agree as part of the Stipulation
18 to accept PacifiCorp' s 2006-2007 DSM expenditures as
19 prudent?
20 A.Staff's review of Rocky Mountain's 2006-2007
21 demand side management (DSM) expenditures found that the
22 Company evaluates the cost-effectiveness of its programs
23 using the tot~l resource cost test (TRC), the utility
24 cost test (UCT), and the participant cost test (PCT)..25 The Company maintains and Staff has verified that its
CASE NO. PAC-E-08-07
02/25/09
72 LOBB, R.(DI) 14
STAFF
1 programs meet Commission approved cost-effective.2 criteria.Staff has also verified that the methodology
3 used by the Company to evaluate benefits
4
5 /
6
7 /
8
9 /
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 73 LOBB,R.(DI)14a
02/25/09 STAFF
1 and costs properly captures program energy savings..2 Addi tionally, Staff is satisfied that the Company
3 periodically reviews and updates its DSM business case
4 through its Integrated Resource Plan (IRP) and other
5 processes.
6 Finally, the Company periodically reviews its
7 DSM program assumptions and cost-effectiveness and makes
8 changes as necessary. Formal, third-party,
9 post-implementation impact and process evaluations have
10 been performed for some of the programs that have been
11 running longer in other PacifiCorp jurisdictions and
12 these evaluations have also resulted in changes to Idaho.13 programs. Al though the Company has not yet obtained
14 competi ti ve-bid, third-party evaluations in Idaho, it is
15 in the process of doing so, per its program evaluation
16 schedule, now that some of its programs have had
17 three-years of experience in Idaho.
18 Rocky Mountain has actively marketed its DSM
19 programs and education to its Idaho customers and many of
20 its customers have participated in them. Consequently,
21 Staff likely would have supported a prudency finding for
22 Rocky Mountain's two-year (2006-2007) DSM expenses in
23 testimony at hearing and concludes that it was reasonable
24 to support such a finding as part of the Stipulation..25 Cos t of Service
Q. What have the parties agreed to with respect to
CASE NO. PAC-E-08-07
02/25/09
74 LOBB, R.(DI) 15
STAFF
.
.
.
1 cost of service?
2 A.As a result of the Commission approved
3 Stipulation in the Company's last general rate case, Case
4 No. PAC-E-07-5, the cost of service methodology used to
5 allocate costs to the various customer classes could not
6 change in this rate case. Consistency in cost of service
7 methodology between rate cases was required due to the
8 rate contract with Monsanto and Agrium. While this case
9 establishes the Idaho jurisdictional revenue requirement,
10 the Company can only recover cost increases associated
11 with retail customers (excluding Monsanto and Agrium) .
12 Changing cost of service methodology in this case could
13 inappropriately increase costs allocated to retail
14 customers or shift costs allocated to Monsanto/Agrium
15 making those additional costs unrecoverable by the
16 Company in this rate case. Consequently, the cost of
17 service methodology used by the Company in its last
18 general rate case and proposed in this case was adopted
19 by the parties to establish class revenue responsibility.
20 Rate Spread and Rate Design
21 Q.Do the parties to the Stipulation agree with
22 the Class revenue spread and the rate relationships
23 proposed by the Company in its direct case?
24 A.Yes, as adj usted for the lower overall revenue
25 requirement. The cost of service study proposed by the
CASE NO. PAC-E-08-07
02/25/09 75 LOBB, R.(DI) 16
STAFF
1 Company and adopted as part of the Stipulation provides.2 the
3
4 /
5
6 /
7
8 /
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 76 LOBB,R.(DI)16a
02/25/09 STAFF
1 basis for the proposed revenue spread. The actual.2 revenue spread specified in the Stipulation for the
3 various customer classes range from no increase for the
4 lighting classifications to 5.94% for commercial
5 schedules 6 and 9. The residential schedule receives an
6 increase of 3.53% and irrigators receive 1. 73% . Staff
7 believes that the proposed revenue spread reasonably
8 applies the results of the cost of service study
9 previously approved by the Commission and accepted by the
10 parties in this case.
11 Absent a compelling rationale for maj or changes
12 in rate structure, the parties in this case agreed to.13 apply the general rate principals proposed by the Company
14 in its original filing. Residential customers will see
15 an across the board increase in rate components while
16 maintaining the differential between summer/winter and
17 peak/off peak energy rates.
18 The rate components for commercial, industrial
19 and irrigation schedules will also increase across the
20 board based on the overall revenue increase proposed for
21 the class. For example, the first block irrigation season
22 energy rate will increase by 1.73% from 7.0083 cents per
23 kWh to 7.1295 cents per kWh. Proposed rates for each of
24 the customer classes are attached as Staff Exhibit No..25 102.
CASE NO. PAC-E-08-07
02/25/09
77 LOBB, R.(DI) 17
STAFF
1 Q.Why is there a provision in the Stipulation for.2 Rocky Mountain to address residential tiered rate design
3 in
4
5 /
6
7 /
8
9 /
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 78 LOBB,R.(DI)17a
02/25/09 STAFF
.
.
.
1 its next general rate case filing?
2 A. While Staff has not proposed any rate structure
3 changes for the residential class in this case, it is
4 interested in whether a tiered rate design would be
5 beneficial to the Company and its customers. Tiered
6 rates have been proposed by Staff and approved by the
7 Commission for Idaho Power residential customers and may
8 be appropriate for Rocky Mountain customers as well.
9 There are however, some significant differences between
10 the two companies that make further evaluation of a
11 tiered rate design necessary. For instance, Rocky
12 Mountain already has a residential time of use rate and
13 Idaho represents only 6% of PacifiCorp' s customer base.
14 A tiered rate design will not have the impact on a system
15 basis for Rocky Mountain that it will have for Idaho
16 Power given that Idaho customers represent about 95% of
17 Idaho Power's customer base.
18 Consequently, the parties agreed that it is
19 reasonable for Rocky Mountain to further investigate and
20 to include an inverted tiered rate design proposal for
21 residential customers in its next filed general rate
22 case.
23 Miscellaneous Provisions
24 Q.Are there any other provisions in the
25 Stipulation that you wish to address?
CASE NO. PAC-E-08-07
02/25/09
LOBB, R.(DI) 18
STAFF
79
.1 A.Yes,there is one.The Stipulation includes a
2 paragraph regarding the Energy Trust of Oregon funding of
3 the
4
5 /
6
7 /
8
9 /
10
11
1L.13
14
15
16
17
18
19
20
21
22
23
24.25
CASE NO.PAC-E-08-07 80 LOBB,R.(DI)18a
02/25/09 STAFF
.
.
.
1 Goodnoe Hills wind generation plant. This issue deals
2 wi th how renewable energy credits generated from the
3 proj ect should be allocated among the j urisdictions given
4 that the Oregon Energy Trust contributed directly to
5 proj ect development. The parties did not agree on any
6 specific allocation methodology and therefore agreed to
7 defer this issue to Rocky Mountain's next general rate
8 case.
9 Q.Does this conclude your testimony in this case?
10 A.Yes it does.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CASE NO. PAC-E-08-07
02/25/09 81 LOBB, R.(DI) 19
STAFF
.
.
1 (The following proceedings were had in
2 open hearing.)
3 COMMISSIONER KEMPTON: Questions?
4 COMMISSIONER REDFORD: Yes, I have a
5 question.
6
7 EXAMINATION
8
9 BY COMMISSIONER REDFORD:
10 Q Mr. Lobb, we're offered the stipulation
11 which doesn't have the usual detail that a witness or
12 others would provide and what I'm asking you is in your
13 negotiation for the settlement, did you go through all
14 the same things that you would have done in a rate case
15 that was going to go to hearing, a general hearing?
16 A Absolutely. Our review of the Company's
17 filing, our audit of the Company books, our review of
18 past Commission Orders and investigations that other
19 state commissions have done were all included. We got to
20 the point where we had identified all of the issues that
21 we would address if we prefiled testimony and then we
.
22 negotiated from that standpoint, so we got to the point
23 where we would have filed testimony on all the issues
24 that we had identified and negotiated the settlement
25 rather than file testimony at that point.
CSB REPORTING
[phone]
82 LOBB (Com)
Staff
.
10
.
.
1 Q And you continue to have the belief that
2 this stipulation is fair and reasonable and in the public
3 good?
4 A I do.
5 COMMISSIONER REDFORD: Thank you. I have
6 no further questions.
7 COMMISSIONER KEMPTON: Commissioner Smith.
8
9 EXAMINATION
11 BY COMMISSIONER SMITH:
12 Mr. Lobb, I guess nine cents is prettyQ
13 high in my book, do you think that most Rocky Mountain
14 Power customers have access to natural gas for purposes
15 of heating because this area is probably where they get
16 more winter weather than we do here?
17 I think a lot of them do. Most of themA
18 do. I don't know which areas, isolated areas, that may
19 not have local gas distribution networks, but I think
20 most of them do. I think there are some areas that
21 probably have propane availability, but I know there are
22 some that do not.
23 As part of the Staff's review of thisQ
24 case, I know ordinarily one of the issues that comes out
25 in a rate case is customer service. Did the Staff
CSB REPORTING
[phone]
83 LOBB (Com)Staff
.
.
.
1 analyze the Company complaints, customer service issues
2 and did they reach any conclusions regarding that?
3 A Actually, we looked at that very closely.
4 We had a lot of production requests that we sent to the
5 Company regarding customer service issues. One of the
6 things that we've been doing all along is meeting with
7 the Company and going over their outage management. They
8 have a fairly sophisticated benchmark in tracking of
9 duration of outages, number of outages. They have a
10 program that pays customers for failure to reconnect in
11 certain time frames and respond accordingly, so we keep
12 up on that. I think they've done a pretty good job. We
13 did not identify issues that were of serious concern.
14 Customer complaints seemed to be down. Outages seemed to
15 be down, so that was not an issue that we identified as
16 being a problem.
17 COMMISSIONER SMITH: Thank you.
18
19 EXAMINATION
20
21 BY COMMISSIONER KEMPTON:
22 Mr. Lobb, I wondered if you could addressQ
23 briefly the mUlti-state process that put a cap on costs
24 allocated to Idaho.
25 The cap was a commitment as part of theA
CSB REPORTING
[phone]
84 LOBB (Com)Staff
.
.
.
1 multi-state process and it was really an agreement by the
2 parties that participated in the multi-state process. It
3 was -- when they changed the allocation method, the
4 allocation methodology that was approved in the
5 multi-state process and approved by the Commission which
6 is the revised protocol actually allocated more costs to
7 Idaho than had previously occurred under the rolled-in
8 method of allocation and so as part of that agreement,
9 the parties agreed that for a period of time, March of
10 this year in fact, the revised protocol would not
11 allocate more costs to Idaho than would have been
12 allocated under the fully rolled-in methodology, so it
13 was just a way to mitigate the impact of the changing
14 allocation process for a period of time while those costs
15 were transi tioned. That's pretty much the extent of it.
16 The effect on Idaho in this case was about 3.1 million.
17 COMMISSIONER KEMPTON: Okay. Are there
18 any other questions? Mr. Woodbury?
19 MR. WOODBURY: Staff has no redirect.
20 Thank you.
21 COMMISSIONER KEMPTON: Mr. Lobb, you may
22 step down.
23 (The witness left the stand.)
24 COMMISSIONER KEMPTON: Mr. Olsen, would
25 you introduce, your witness?
CSB REPORTING
[phone]
LOBB (Com)Staff85
.
.
.
1 MR. OLSEN: Mr. Chairman, we don't have
2 any witnesses to present at this time, so...
3 COMMISSIONER KEMPTON: You do have
4 prefiled testimony, however.
5 MR. OLSEN: A point of clarification. We
6 did file comments and Mr. Woodbury asked that that be
7 spread on the record, but to conserve expenses, we didn't
8 want to bring our expert out here and so we didn i t file
9 direct testimony in that form.
10 COMMISSIONER KEMPTON: Okay, let me ask,
11 though, nevertheless whether you have any changes to your
12 comments that were filed or do they stand as presented?
13 MR. OLSEN: I did note one clerical thing
14 in the beginning I could make an adjustment to on that.
15 On page 1, introductory paragraph, just the second line
16 here, it says, "hereby respectfully submits 'the'
17 following comments in support" and other than that, that
18 was one I know that I missed.
19 COMMISSIONER KEMPTON: All right.
20 Mr. Purdy, would you introduce your witness?
21 MR. PURDY: Yes, Mr. Chairman, Community
22 Action calls Teri Ottens.
23
24
25
CSB REPORTING
[phone]
86 COLLOQUY
.1
2
TERI OTTENS,
produced as a witness at the instance of the Community
3 Action Partnership Assocation of Idaho, having been first
4 duly sworn, was examined and testified as follows:
.
5
6
7
8 BY MR. PURDY:
9 Q
DIRECT EXAMINATION
Would you please state and spell your
Teri Ottens, O-t-t-e-n-s. First name
13 Q Thank you.By whom are you employed and
17 energy issues.
18 Q
10 name?
11 A
I am employed by the Community Action
16 Partnership Association of Idaho to work with them on
12 T-e-r-i.
14 in what capacity?
All right, and have you previously
19 prefiled testimony in this proceeding consisting of nine
15 A
20 pages?
21
22
23
24.25
A
Q
A
Q
I have.
Do you have any exhibits?
No.
Okay. If I were to ask you the same
questions as those contained in your prefiled testimony
CSB REPORTING
[phone]
87 OTTENS (Di)
CAPAI
.1 today, would your answers be the same?
2 A They would.
3 MR. PURDY: With that, Mr. Chair, I would
4 ask that the direct testimony of Teri Ottens be spread
5 upon the record as if read.
6 COMMISSIONER KEMPTON: So ordered.
7 (The following prefiled testimony of
8 Ms. Teri Ottens is spread upon the record.)
.
.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CSB REPORTING
[phone]
88 OTTENS (Di)
CAPAI
.1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
.
I. INTRODUCTION
Q. Please state your name and business address.
A. My name is Teri Ottens. I am the Policy
Director of the Community Action Partnership Association
of Idaho headquartered at 5400 W. Franklin, Suite G,
Boise, Idaho, 83705.
Q. On whose behalf are you testifying in this
proceeding?
A. The Community Action Partnership Association of
Idaho ("CAPAI") Board of Directors asked me to present
the views of an expert on, and advocate for, low income
customers of Rocky Mountain Power. CAPAI' s participation
in this proceeding reflects our organization's view that
low income people are an important part of Rocky Mountain
Power's customer base, and that these customers will be
adversely impacted by the proposed changes to the
Company's electric service schedules.
Q. Please describe CAPAI' s organization and the
functions it performs, relevant to its involvement in
this case.
A. CAPAI is an association of Idaho's six
Communi ty Action Partnerships, the Community Council of
Idaho and the Canyon County Organization on Aging,
Weatherization and Human Services, all dedicated to
promoting self-sufficiency through removing the causes
89 TERI OTTENS - DIRECT 2
.1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
.
and conditions of poverty in Idaho's communi ties.
Q. What are the Community Action Partnerships?
A. Community Action Partnerships ("CAPs") are
private, nonprofit organizations that fight poverty.
Each CAP has a designated service area. Combining all
CAPS, every county in Idaho is served. CAPS design their
various programs to meet the unique needs of communi ties
located wi thin their respective service areas. Not every
CAP provides all of the following services, but all work
wi th people to promote and support increased
self-sufficiency. Programs provided by CAPS include:
employment preparation and dispatch, education assistance
child care, emergency food, senior independence and
support,
/
/
/
90 TERI OTTENS - DIRECT 2a
.
.
.
1
2
3
4
5
6
clothing, home weatherization, energy assistance,
affordable housing, health care access, and much more.
Q. Have you testified before this Commission in
other proceedings?
A. Yes, I have testified on behalf of CAPAI in
numerous cases involving PacifiCorp, Idaho Power Company,
7 AVISTA, and United Water.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
II. SUMY
Q. Please summarize your testimony in this case?
A. The purpose of CAPAI' s testimony in this case
is to support the negotiated settlement stipulation
previously filed with the Commission and to which each
party is either a signatory or has no obj ection. The
details of CAPAI' s recommendations which were accepted by
all parties are set forth in the following section.
Q. Are there any exhibits to your testimony in
this case?
A. No, other than that I incorporate by reference
the Settlement Stipulation signed or undisputed by all
parties and previously filed with the Commission.
III. RECOMMNDATIONS
A. Background
Q. By way of background, why has CAPAI intervened
in this particular proceeding?
A. CAPAI is concerned that the combined proposed
91 TERI OTTENS - DIRECT 3
.
.
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
increases in fees and rates will add to the already
unwieldy energy cost burden that low income families in
Idaho face, particularly in these uncertain economic
times. This is of significant importance to low-income
Idaho customers and those who must provide services to
them.
Q. Can you provide poverty statistics for Idaho?
A. According to the Idaho Department of Commerce,
12.6% of the State's population, when using the 2006
Census data, falls within federal poverty guidelines and
an additional 12.4% fall wi thin the state guidelines set
at 150% of poverty levels. The 2006 Census reveals that
those living in poverty are categorized as 8.7% elderly,
15.1% children, 9.8% all other families, 28.5% single
mothers and 26.4% all others.
Q. How does this translate to energy
"affordability? "
/
/
/
92 TERI OTTENS - DIRECT 3a
.
.
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
A. According to the U. S. Department of Energy, the
"affordability burden" for total home energy is set
nationwide at 6% of gross household income and the burden
for home heating is set at 2% of gross household income.
In Idaho, there was a gap in the 2006/2007 heating season
of over $123 million between what Idahoans can afford to
pay (based on federal standards) for energy and what they
actually paid. While this gap increased by $26. 7 million
from the previous year, the LIHEAP funding only increased
by $1.8 million. Currently, the LIHEAP program sends
approximately $12.2 million (for energy assistance,
weatherization and administration) to Idaho.
B. Settlement Stipulation
Q. Would you please provide an overall summary of
the settlement reached by the parties in this case?
A. The settlement is known as a "black box"
settlement in which not every party necessarily agreed to
every component of the agreement, but that all parties
support the proposed overall, across the board, increase
to the Company's revenue requirement of $4,382,632, with
an increase to the residential class of 3.53%, and that
the Stipulation is in the public interest.
Q. Did CAPAI actively participate in this
proceeding?
A. Yes, beginning with a thorough review of the
93 TERI OTTENS - DIRECT 4
.
.
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
lengthy filing itself to becoming a formal party and,
ul timately, to filing this testimony and participating in
the technical hearing to be conducted in this case, CAPAI
exercised all of its rights and responsibilities as a
full and formal party.
Q. Will you please identify those components of
the settlement that were of particular concern and
relevance to CAPAI?
A. Yes. First, CAPAI noted that unlike AVISTA and
Idaho Power, Rocky Mountain does not have tiered rates.
CAPAI strenuously argued for an enhancement or
enlargement of tiered rates in the recently concluded
Idaho Power general rate case hearing (Case No.
IPC-E-08-10). As the Commission is aware, Idaho Power
was ultimately ordered to increase its tiered rates
/
/
/
94 TERI OTTENS - DIRECT 4a
.1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
.
from a part-year basis to a full year, three-tier rate.
Given the lack of time for Rocky Mountain Power to revise
its application to propose tiered rates in advance of
Staff and Intervenor prefile deadlines, the parties
agreed that it would be reasonable for the Company to
commi t to "include an inverted tier rate design proposal
or option for residential customers in its next filed
general rate case for the Commission's consideration."
Stipulation, par.10, p.4.
Q. Has Rocky Mountain committed to a specific
filing date for its next general rate case?
A. No, but the Company has clearly indicated that
it will not be in the not-too-distant-future, perhaps
late this year or early next.
Q. What else did Rocky Mountain Power agree to in
its Stipulation of particular interest to CAPAI and the
Company's general body of ratepayers?
A. Following in the wake of AVISTA' s settlement
agreement to fund a low-income specific conservation
education program, and subsequently ordered by the
Commission in Idaho Power's recent rate case
(IPC-E-08-10), Rocky Mountain Power agreed to fund a
total of $50,000.00 for the two CAP agencies operating in
Rocky Mountain's certificated area. This is relatively
equivalent to the funding levels of AVISTA and Idaho
95 TERI OTTENS - DIRECT 5
.
.
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Power (i.e., $25,000.00 per CAP agency).
Q. Are there any conditions in the Settlement
Stipulation to the funding of the energy efficiency
education program?
A. Yes, the Stipulation provides that it shall be
the responsibility of CAPAI to propose the specifics of
the conservation program to the Company, and all parties,
as well as how the funding will be distributed between
the two CAP agencies, the Southeastern Idaho Community
Action Agency and the Eastern Idaho Community Action
Partnership.
Q. Does CAPAI intend to simply split equally the
$25,000.00 allocated for each CAP agency or is there some
other allocation method CAPAI has in mind?
A. Based on discussions with the utilities, the
preference seems to be to allocate the total amount of
funding given by each utility to the CAP agencies
operating in the utility's area based on the relative
customer population of the CAP agency in question. This
would avoid the inequity of allocating the same amount of
funding to two literally
/
/
96 TERI OTTENS - DIRECT 5a
.1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
.
adj acent CAP agencies even though their customer
populations might be significantly different.
Q. Are there any other requirements imposed on
CAPAI regarding low-income energy efficiency education?
A. All of the conditions described herein on the
part of CAPAI shall be concluded no later than May 1,
2009. In addition, CAPAI will explain in detail the
obj ecti ves of the energy efficiency programs and will
endeavor to provide savings estimates to assist the
Company in program evaluation and reporting requirements.
It is understood, however, that by virtue of its very
nature, estimating the savings resulting from an
educational program is not amenable to a high degree of
precision. In light of this, all parties agree that the
low-income energy efficiency education program is "in the
public interest and is determined to be cost effective
even though the explicit quantification of benefits may
not be possible." Stip. Par. 8, p. 4 . All parties further
support the justification and recovery of these costs.
Id.
Q. Do you believe that this low-income energy
efficiency education program is in the public interest
and, if so, why?
A. Energy efficiency is one of the most cost
effecti ve and long term methods to reduce overall energy
97 TERI OTTENS - DIRECT 6
.1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
.
.
costs for both individual households and nationally. The
effort can be stymied, however, by a lack of knowledge,
especially among a segment of population that often can
only concentrate on basic survival needs. An education
program provided by counselors that the low-income are
already reaching out to through the LIHEAP program can
provide essential education on effective, low cost ways
to achieve a reduction in their energy bill when it is
needed most and also provide a legitimate, system-wide
conservation resource.
V. CONCLUSION
Q: Does that conclude your testimony?
/
/
/
98 TERI OTTENS - DIRECT 6a
1 A:Yes it does..2
3
4
5
6
7
8
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
99 TERI OTTENS - DIRECT 7
.
.
1 (The following proceedings were had in
2 open hearing.)
3 MR. PURDY: And she is available for
4 cross.
5 COMMISSIONER KEMPTON: Commissioners?
6 COMMISSIONER REDFORD: I have nothing.
7 COMMISSIONER KEMPTON: Commissioner
8 Smith.
9
10 EXAMINATION
11
12 BY COMMISSIONER SMITH:
13 Q Just one, Ms. Ottens. You were present in
14 the room when I asked Mr. Weston that question. Could
15 you please help me understand how these two agencies work
16 and whether the money that's being provided by Rocky
17 Mountain Power if approved by the Commission would be
18 used and who it would serve?
19 A Sure. The two agencies that were
20 mentioned that we're talking about, EICAP and SEICAA, do
21 serve most of eastern Idaho. They do serve a variety of
22 customers from various utilities, including Idaho Power,
23 many of the co-ops, as well as Rocky Mountain Power. The
24 program that we're talking about, an education program,.25
.
because it's being funded by the utility would be
CSB REPORTING
[phone]
100 OTTENS (Com)
CAPAI
.
.
.
1 directed to the utility customers. We haven't come up
2 wi th a design of the program yet. We were waiting for a
3 ruling from you, of course, but our initial conversations
4 with Rocky Mountain Power, we believe that the funds
5 would be distributed based upon customer base and so what
6 each agency gets would depend upon the number of
7 customers, Rocky Mountain Power customers, that they have
8 in their area and then the materials would be developed,
9 hopefully, in conj unction with what Rocky Mountain Power
10 already has and is already doing in the area of energy
11 conservation and efficiency and then they would be
12 distributed mainly through when Rocky Mountain Power
13 customers come in for the LIHEAP assistance. We would
14 distribute it while they're there getting counseling for
15 LIHEAP. We would add energy efficiency counseling on top
16 of that for those Rocky Mountain customers that have come
17 in.
18 COMMISSIONER SMITH: Thank you. That's
19 all I have.
20
21 EXAMINATION
22
23 BY COMMISSIONER KEMPTON:
24 Q Ms. Ottens, I have -- it's a general
25 question. It's come up not only in this case but in
CSB REPORTING
[phone]
101 OTTENS (Com)
CAPAI
.
.
.
1 other considerations, but specifically directed to your
2 interests in this Rocky Mountain Power stipulation and
3 this case, the energy efficiency programs, are those
4 designed at the utility level and then provided to you
5 for application or are those elements of education
6 created in your office or through the LIHEAP office and
7 then provided to customers?
8 A They are -- it's a combination of actually
9 three sources. We work with Rocky Mountain Power and the
10 other utili ties. We develop our own materials, but we
11 also get certain things that are, I don't want to say
12 mandated, but come down from the federal government that
13 they would like to see us distribute as well, so it i S a
14 combination of the three in developing our materials and
15 our curriculum when we do our counseling.
16 Q The final face to face is through CAPAI,
17 though?
18 A Yes.
19 COMMISSIONER KEMPTON: Okay, any other
20 questions? Mr. Olsen, redirect?
21 MR. PURDY: Yes, Mr. Purdy here.
22
23
24
25
CSB REPORTING
[phone]
102 OTTENS (Com)
CAPAI
1 REDIRECT EXAMINATION.2
3 BY MR. PURDY:
4 I just had one point of clarification.
5 You used the names EICAP and SEICAA. Just for the
6 benefit of the record, could you spell those out and
7 explain what they mean?
8 A EICAP, Eastern Idaho Community Action
9 Partnership.. SEICAA is Southeastern Idaho Community
10 Action Agency.
11 Q Are those the only two CAP agencies in
12 Rocky Mountain Power's service terri tory?.13 A They are.
14 MR. PURDY: Thank you. I have nothing
15 further.
16 COMMISSIONER KEMPTON: And no other cross?
17 Okay, if there's no obj ection at this point, the Chair
18 would note that all previously filed direct testimony,
19 related documents and computer disks, together with filed
20 testimony in today's settlement hearing will be
21 incorporated into the record by reference.
22 (All exhibits previously marked for
23 identification were admitted into evidence.)
24 COMMISSIONER KEMPTON: Mr. Olsen?.25 MR. PURDY: My witness was asking if she
CSB REPORTING
[phone]
103 OTTENS (Di)
CAPAI
.
.
.
1 could step down.
2 COMMISSIONER KEMPTON: Ms. Ottens, there's
3 no reason that you can't be excused.
4 (The witness left the stand.)
5 COMMISSIONER KEMPTON: Hearing and seeing
6 no obj ection to that provision, it is so ordered on the
7 documents. We have in matters following this hearing, we
8 have a public hearing scheduled in Shelly City Hall on
9 Tuesday, March 17th, at 7:00 o'clock, weather permitting,
10 and the record will be closed after the Shelly hearing.
11 The Commission will subsequently deliberate and issue a
12 decision after that hearing is completed, and for
13 purposes of intervenor funding, Rule 164 which is the
14 provisionary tolling rule will commence with the
15 adj ournment of this stipulation hearing, so at the end of
16 this hearing, the tolling period for that, the 14-day
17 tolling period, will start as far as intervenor funding
18 requests.
19 Are there any additional matters to come
20 before the Commission? Seeing none, this settlement
21 hearing is adjourned.
22 (The Hearing adjourned at 10:25 a.m.)
23
24
25
CSB REPORTING
[phone]
104 COLLOQUY
.
.
20
21
22
23
24.25
1 AUTHENTICATION
2
3
4 This is to certify that the foregoing
5 proceedings held in the matter of the application of
6 PacifiCorp dba Rocky Mountain Power for approval of
7 changes to its electric service schedules, commencing at
8 9:30 a.m., on Wednesday, March 11, 2009, at the
9 Commission Hearing Room, 472 West Washington Street,
10 Boise, Idaho, is a true and correct transcript of said
11 proceedings and the original thereof for the file of the
12 Commission.
13 Accuracy of all prefiled testimony as
14 originally submitted to the Reporter and incorporated
15 herein at the direction of the Commission is the sole
16 responsibili ty of the submitting parties.
17
18
19 ~dÀ
CONSTANCE S. BUCY
Certified Shorthand Reporter
CSB REPORTING
[phone]
\\\11111"",\\\\ AN 'ii,.,'.~:t C~ i",. ~'; ~",
~":. O~ ,~\~Illrl"ii .1\,"', ".,,- T 1111 \I" ~.; 0 :c~"'~' 0 A ""'-:' ~ ~-' 'A'~ _ ~
:: f -s,% '-0 ~-;- -=-::;v ="'_
%, ~ ~\,'(,l) L \ (j ,/ J
"""'.. -rli "/¡i- \',...... ::r ,~ "IIIiUI\\\'\ 0 "'¿ (;0 d.' ,/" F IDP-P ",-'
JIJlJP\l\\\\
105 AUTHENTICATION