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1 SANDPOINT, IDAHO, TUESDAY, JUNE 8, 1999, 7:00 P.M.
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4 COMMISSIONER SMITH: Good evening, ladies
5 and gentlemen. This is the time and place set for a
6 public hearing before the Idaho Public Utilities
7 Commission on the matter of the rate increase for
8 Washington Water Power, now called Avista. My name is
9 Marsha Smith. The sound system is acting up. I'm one of
10 the three Commissioners on the Idaho Public Utilities
11 Commission and I'll Chair tonight's hearing. On my left
12 is Commissioner Dennis Hansen who is also president of
13 the Commission and on my right is Commissioner Paul
14 Kjellander. The three of us are the entire Commission.
15 Our purpose here tonight is to take comment
16 from members of the public on the rate increase that
17 Avista has requested. First, let a few of the key
18 players here introduce themselves and we'll begin with
19 Mr. Meyer who is an attorney for Avista.
20 MR. MEYER: Thank you. Am I on? I never
21 seem to know. I'm on. Thank you for the introduction.
22 We have several individuals here from Avista. I won't
23 introduce them all, but there are three certainly key
24 individuals that if you have questions during a break or
25 at the end of the session, please address them to at
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1 least one of those three. There are others as well.
2 Mr. Thomas Matthews, would you stand,
3 please? Mr. Matthews is our chairman and CEO; Edward
4 Turner to his left, vice president of energy delivery;
5 and lastly, Will Menghini who is a Sandpoint area
6 manager; so, please, if you have questions, we're here to
7 answer those questions during a break or at the end.
8 Thank you.
9 COMMISSIONER SMITH: The way we conduct our
10 hearings is through a sign-up sheet and I notice the
11 first person and someone we're happy to recognize is
12 State Senator Shawn Keough and, Senator Keough, did you
13 wish to make a statement before the Commission?
14 MS. KEOUGH: I did.
15 COMMISSIONER SMITH: Okay. Our procedure
16 is you need to come forward, Commissioner Kjellander will
17 ask you to raise your right hand and promise to tell the
18 truth and then we'll have you sit at the witness table.
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1 SHAWN KEOUGH,
2 appearing as a public witness, having been first duly
3 sworn, testified as follows:
4
5 COMMISSIONER SMITH: And then the other key
6 player here tonight which I haven't yet introduced would
7 be Mr. Woodbury who is the Deputy Attorney General on
8 behalf of the Commission Staff and he'll ask you a few
9 questions to get you on the record.
10
11 EXAMINATION
12
13 BY MR. WOODBURY:
14 Q Senator Keough, if you could please state
15 your full name, spell your last name for the record and
16 give your address, your full address, with a zip because
17 our consumer Staff keeps track of these things and they
18 do some follow-up.
19 A Great. My name is Shawn Keough and that's
20 spelled S-h-a-w-n and the last name K-e-o-u-g-h. I am
21 the State Senator for Legislative District 1. My address
22 is P.O. Box 101, Sandpoint, Idaho, 83864.
23 Q Thank you. You may give your statement.
24 A Great. Thank you very much. I have to
25 tell you that despite the service in the legislature,
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1 this is very intimidating. I'm used to facing our fellow
2 legislators and --
3 COMMISSIONER SMITH: We sometimes feel that
4 way in the Statehouse.
5 THE WITNESS: Do you? Well, great, then
6 we're both in the same situation. I want to thank you
7 for this opportunity to visit with you and I feel so
8 formal and what I want to share with you is more some
9 background. I fully expect that my comments tonight will
10 probably bore the legal minds here and quickly be fluffed
11 away and I anticipate that and accept that, but I felt it
12 important to share with you some of the thoughts of some
13 of the people I represent.
14 First of all, I wanted to thank you for
15 being here, for taking the time to travel here to this
16 area and bring your Staff and listen to the people here
17 about this issue on all sides of the issue, I really
18 appreciate that. There is concern that tonight's hearing
19 is merely a formality and that the Commission has already
20 determined that the utility will be granted its request,
21 but I'm hopeful and feel confident from one public
22 official to another that you have maintained an open mind
23 waiting to hear from all sides of the issues before
24 making a determination and, again, I thank you for this
25 opportunity.
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1 I briefly reviewed the Idaho State code as
2 it relates to your duties and the decision before you on
3 this rate increase request. I am aware that, again, some
4 of the issues I may raise are perhaps only remotely
5 rooted in the law. I fully expect to be rebutted by the
6 Company and perhaps by the Commission as well; however, I
7 am compelled to share these issues with you as I believe
8 my community can ill afford these increases. To be sure,
9 some can, but many cannot.
10 In my review of the code, I was struck by
11 the very first section under the duties of public
12 utilities. Chapter 3, section 61-301 speaks to charges
13 being just and reasonable. Specifically, the law states
14 that all charges made, demanded or received by any public
15 utility shall be just and reasonable.
16 Here in Bonner County the most recent
17 employment figures released just last week show that we
18 suffer 9.8 percent unemployment. This is over double the
19 statewide average. In Bonner County alone we have lost
20 over 600 high-paying, one-income-per-family timber jobs
21 in just a few short years. In fact, across the area
22 proposed for this rate increase are the counties with the
23 highest unemployment rates in the state.
24 The business sector we have as well as the
25 unemployed and the underemployed can ill afford the rate
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1 increases in this proposal. For families, the rate
2 increase as I interpret it will be 15.4 percent. For my
3 household, I can then expect to pay about $200 more a
4 year in utility costs. My husband and I both work, in
5 fact I have two jobs, and $200 more a year, while not
6 much to some and more to others, for us means cuts
7 somewhere else, perhaps a cut in enrolling our boys on
8 the baseball team that they've just joined this week and
9 maybe a partial month without groceries and we are
10 fortunate.
11 For some, the choices become or can become
12 power versus medical bills, gas for the car, clothes for
13 the kids and other necessities. On a larger scale, our
14 local school district estimates that they can expect
15 around a $65,000 increase in the utility bill and this in
16 a community where we pull together and have fund-raising
17 drives to buy the simplest school supplies for our
18 children's classrooms, paper for their lessons as the
19 books they bring home are severely limited, pencils,
20 tissues, not to mention the leaky roofs we are
21 perpetually repairing.
22 The business community we have is working
23 hard to stay in business and I realize that the utility
24 company is as well. Our remaining large manufacturing
25 employers can anticipate, as I understand it, a 16.4
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1 percent increase. While many across the country look
2 here and envy our low power rates, they overlook the
3 things we do not have and struggle to obtain; adequate
4 roads, adequate infrastructure to attract new business
5 and retain existing ones, just and reasonable.
6 Although you the Commission members made
7 clear through your press person that you don't set the
8 salaries for CEOs, we all know that in the arena we work
9 in perception is reality. When we have an increasing and
10 documented number of people lining up at our local food
11 bank, it is easy to connect increased power rates with
12 huge salaries paid to the CEO of the company asking for
13 more money. The perception just became reality in the
14 food line, just and reasonable.
15 Buried in the proposal is the Company's
16 need for the increase due to costs associated with
17 relicensing of their dams. While the Company and in
18 particular several of their employees whom I respect are
19 to be commended and applauded for collaborative work on
20 relicensing, the larger general public did not have a
21 seat at the decision table when the agreements were
22 signed that promised millions and millions of dollars to
23 projects that range from pretty good to maybe not so
24 good, but we'll see.
25 We are being asked, then, to pay for
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1 something, quite a bit of something actually, and yet the
2 only opportunity we have to say whether we like, want or
3 can afford to pay for those projects is tonight here with
4 you.
5 I read in the paper that the Company can
6 and would like to make between a 9 percent to 10 percent
7 return for their investment. Currently it was again
8 reported they are making only 7 percent. The average
9 passbook savings account on my children's accounts is
10 around 2 percent. A short-term CD if I could find one at
11 7 percent, I haven't found one quite yet, let me know
12 where I can sign up to make a 7 percent return on the
13 savings we're trying to squirrel away for our children's
14 future. I'm especially interested in a 9 percent to
15 10 percent return.
16 I can choose not to belong to an
17 organization because the membership dues went up, I can
18 choose a different telephone company if I don't like the
19 rates, but I cannot choose my power company and most
20 people in my district cannot choose their power company
21 and I believe we should not be forced to choose or in
22 fact perhaps not be given any choice between feeding our
23 families and paying our power bill.
24 Again, I realize that a lot of these issues
25 may be outside the scope of the technical, analytical
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1 process that occurs here, but I want to bring to you the
2 people's side of this equation and it's my hope that you
3 will please keep the people who can least afford this
4 rate increase in mind as you weigh your difficult
5 decision. Please keep in kind our troubled economy, too
6 and try a decision that is just and reasonable.
7 Thank you again for your time, I appreciate
8 that.
9 COMMISSIONER SMITH: Thank you, Senator.
10 Let's see if there are any questions.
11 Mr. Meyer, do you have any questions?
12 MR. MEYER: Other than to thank you for
13 your testimony, we have no questions.
14 COMMISSIONER SMITH: Mr. Woodbury?
15 MR. WOODBURY: Staff has no questions.
16 Thanks.
17 COMMISSIONER SMITH: Commissioner Hansen.
18
19 EXAMINATION
20
21 BY COMMISSIONER HANSEN:
22 Q Senator, I'd like to just ask you one. How
23 would you evaluate the quality of service that you and
24 your constituents that you represent in this area receive
25 from Avista Power? Would that be outstanding or good or
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1 average or poor? How would you rate the quality of
2 service?
3 A I would say for myself and my family and
4 speaking from that perspective that our service is good.
5 We are treated with prompt service and when we have
6 outages, we're able to communicate with the Company and
7 determine what is happening and what the anticipation of
8 return of power is; however, I've heard from some other
9 constituents fairly recently sparked by this that they
10 have concerns and they would rate their service lower
11 than that in terms of new construction, putting
12 infrastructure in at their expense which the Company
13 would then take on after the construction and having a
14 difficult and perhaps challenging time dealing with those
15 types of issues, but just a couple of different
16 perspectives, mine and some that have been shared with
17 me.
18 Q One other question. You mentioned at the
19 close of your statement that you really don't have the
20 choice to choose another supplier. Would you like that
21 opportunity or do you feel the people you represent would
22 like to be able to choose the power company to deliver
23 power to them rather than just being forced to take power
24 from the one company?
25 A That's an interesting question in the light
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1 of the deregulation we're seeing in some of our
2 utilities, but personally, if it came to a choice for me,
3 I would like to have a choice. I shop for the best
4 telephone rates, I shop for the best rates that I can.
5 We're a middle income family and we need to be budget
6 conscious and we weigh, of course, the services as well.
7 There are people in the area that would
8 also like the choice. I am certain there are also people
9 in the area that think that our utility company, that
10 Avista, is doing a fine job and would not. I know that
11 there's a broad range out there, but I know that there
12 are folks who would like to have an opportunity to
13 choose.
14 COMMISSIONER HANSEN: Thank you very much.
15 COMMISSIONER SMITH: Commissioner
16 Kjellander.
17
18 EXAMINATION
19
20 BY COMMISSIONER KJELLANDER:
21 Q Well, Senator, I just wanted to thank you
22 again for your comments and I wanted to address just one
23 point that you raised about some of your constituents
24 feeling that there may already be a done deal and the
25 Commission may already have made up its mind. I just
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1 wanted to assure you, I know you're familiar with the
2 bill books that you have down at the legislature, this is
3 just this case [indicating] and I know that it takes
4 about two months before you have this many bills sitting
5 on your desk at the Senate and I can assure you that
6 having gone through this once, I am nowhere near even
7 having an inclination of where I'm going to be when we
8 sit down and begin to deliberate and just wanted to let
9 you know coming from the legislature, the deliberation
10 process is very long and very detailed and the
11 proceedings that go on here have a very significant
12 impact in terms of when we sit down for our
13 deliberations, so I just wanted to assure you that for
14 constituents that may feel that we've made up our mind, I
15 can tell you at least from my perspective it will be
16 quite awhile before I actually get to a point where I can
17 see through a lot of the details and information that
18 we've seen in the testimony that we're picking up over
19 the next few days.
20 A Thank you for that, Commissioner, and if I
21 might respond, I appreciate hearing that and appreciate
22 the opportunity to share that with those constituents
23 that have voiced that concern and I do not envy you the
24 books in front of you and know that you will deliberate
25 and, as I mentioned, I feel confident that you will look
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1 at all aspects of the case before you make a
2 determination.
3 COMMISSIONER KJELLANDER: Thank you.
4 COMMISSIONER SMITH: Thank you very much,
5 Senator. We appreciate your coming out tonight.
6 (The witness left the stand.)
7 COMMISSIONER SMITH: Before we go any
8 further, I'd also like to recognize State Representative
9 John Campbell who is here this evening.
10 The next person who signed up to testify is
11 Bob Crump.
12 MR. CRUMP: I must have signed the wrong
13 sheet.
14 COMMISSIONER SMITH: Well, I have to say I
15 was surprised, Bob.
16 MR. CRUMP: I looked it over and I thought
17 for sure I signed the right one. No, I'm sorry.
18 COMMISSIONER SMITH: You don't wish to
19 testify.
20 MR. CRUMP: No, my mistake.
21 COMMISSIONER SMITH: How about Gary
22 Nieborsky?
23 MR. NIEBORSKY: It was just a test to see
24 if you could pronounce it.
25 COMMISSIONER SMITH: I can't.
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1 MR. NIEBORSKY: I'm in the same boat Bob
2 was, wrong sign-up sheet.
3 COMMISSIONER SMITH: Okay. Charlie Coen.
4
5 CHARLES COEN,
6 appearing as a public witness, having been first duly
7 sworn, testified as follows:
8
9 EXAMINATION
10
11 BY MR. WOODBURY:
12 Q Mr. Coen, will you please state your full
13 name and spell your last name for the reporter and give
14 your full address for the consumer division?
15 A Charles, C-h-a-r-l-e-s, Coen, C-o-e-n. My
16 address is 940 Mountain Creek Road, Sandpoint. I'm just
17 here briefly to make a statement. I've worked for
18 Litehouse Salad Dressing here in Sandpoint for 13 years
19 and I know the people that own the company have worked
20 hard and we're always pinching pennies trying to make it
21 and we have 250 people employed here in town, and I am
22 just concerned that the rate increase is going to affect
23 our business and, you know, we're in the five digit
24 figures every month paying our bills and the increase is
25 going to hurt our bottom line which we're struggling
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1 with, and the owners, the Hawkins, they worked 30 years
2 to get the business where it is today and they've really
3 worked hard and they've pinched pennies and I'm kind of
4 here on my own, just want to state what I think is fair
5 to the company and I want to see it keep going.
6 You know, I'm getting up in age, but we
7 have a lot of young employees and we want to keep working
8 here in Sandpoint, and that's about all I have to say.
9 Thank you.
10 COMMISSIONER SMITH: Let's see if there are
11 any questions for you.
12 Mr. Meyer?
13 MR. MEYER: I have none. Thank you.
14 COMMISSIONER SMITH: Mr. Woodbury?
15
16 CROSS-EXAMINATION
17
18 BY MR. WOODBURY:
19 Q And what is your position with the company?
20 A I'm a quality assurance director.
21 Q And do you have anything to do with the
22 electric consumption at the company?
23 A No, I'm just kind of given an extra duty to
24 see what we could do about controlling the utilities,
25 that's kind of a side job and actually, I have somebody
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1 from Avista coming Thursday morning to survey our company
2 and see what we can do there to save and I guess this
3 reminded me to do that because we're talking about an
4 increase while I'm trying to turn it around and maybe
5 make a decrease or keep it level or whatever.
6 MR. WOODBURY: Thank you.
7 COMMISSIONER SMITH: Commissioners? We
8 thank you very much, Mr. Coen, for taking the time to
9 give us your opinion.
10 THE WITNESS: Thank you.
11 (The witness left the stand.)
12 COMMISSIONER SMITH: That's the end of the
13 people who signed up on the sign-up sheet to testify. If
14 there are others here who wish to testify and didn't sign
15 up, you may please come forward now and we will take your
16 comments. This is your only chance.
17 Well, that being the case, then, if there
18 are no further public witnesses to testify before the
19 Commission tonight, we'll adjourn tonight's session and
20 we will commence tomorrow morning again at 8:30 for a
21 continuation of our technical hearing. Thank you all for
22 attending.
23 Mr. Woodbury.
24 MR. WOODBURY: Yes, there are quite a
25 number of Staff members here for the public that would
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1 like to speak to them; Randy Lobb who is head of our
2 engineering division, Rick Sterling who is an engineer,
3 Bill Eastlake who is an advisor to the Commission in the
4 area of electricity, Marj Maxwell who is in the consumer
5 division, Lynn Anderson who is an economist. Please feel
6 free to approach them.
7 COMMISSIONER SMITH: Thank you,
8 Mr. Woodbury.
9 We are adjourned until 8:30 a.m.
10 (The Hearing recessed at 7:25 p.m.)
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