20070621Hearing.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF BG & CM RAILROAD
OBJECTIONS TO ITS ANNUAL REGULATORY
MEETING FOR CALENDAR YEAR 2007
Place:
DATE:
CASE NO. BGR-R-07-
HEARING BEFORE
COMMISSIONER PAUL KJELLANDER (Presiding)
COMMISSIONER MAC REDFORD
COMMISSIONER MARSHA H. SMITH
Commission Hearing Room
472 W. Washington Street
Boise, Idaho
May 29 , 2007
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POST OFFICE BOX 578
BOISE, IDAHO 83701
208-336-9208
COURT REPORTING
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ARAN
For the Staff:OFFICE
Donald
Deputy
472 W.
Boise,
OF ATTORNEY GENERAL
Howell
Attorney General
Washington StreetIdaho 83720
For the Idaho Public Utili ties Commission:
WITNESS
Ellis Hire
EXAMINATION BY PAGE
Mr. Walker (Direct)
Commissioner Tj ellander
(Direct)
PROCEEDINGS
MAY 29, 2007
Good morning.This isCOMMISSION KJELLANDER:
the time and place for the hearing on Case No. BGR-R-07-01, In
The Matter of BG & CM Railroad Obj ections To Its Annual
Regulatory Meeting For Calendar Year 2007.
(No response.
My name is Paul Kj ellander.m the Chairman of
today s proceedings.To my right is Commissioner Mack Redford,
and to my left is Commissioner Marsha Smith.We comprise the
Commission.And following these proceedings and developing a
record, we will render a decision on this specific case.
As we prepare for the appearances of the parties,
let's go to the phone line first to see if Mr. Les Hancock from
BG & CM Railroad is on the line.
Mr. Hancock?
(No response.
COMMISSION KJELLANDER:We will note for the
record that Mr. Hancock is not on the line; however , if he
should join us during the proceeding via the telephonic portion
of our proceeding, we will certainly allow him an opportunity to
speak.
Okay, let's move now for the appearance of
parties.And we will go to Mr. Don Howell.
Mr. Don Howell.
Thank you, Mr. President.MR. HOWELL:
For the record my name is Donald Howell.
m the Deputy Attorney General representing the Commission
Staff today.
COMMISSIONER KJELLANDER:Mr. Howell , are there
any preliminary matters that you need to set before the
Commission?
MR. HOWELL:There are no preliminary matters
The Commission staffthat need to come before the Commission.
has one witness that is available to testify regarding his
evaluation or audit of the company, and that is Mr. Hattaway.
Would you likeCOMMISSIONER KJELLANDER:Okay.
to put Mr. Hattaway on the stand.ll get him sworn in and
ll move forward.
DAVID HATTWAY,
having been first duly sworn , testified upon examination as
follows:
EXAMINATION
BY MR. HOWELL:
Please state your name and your business address for
the record.
And my business address isMy name is David Hattaway.
472 West Washington Street, Boise, Idaho.
And, Mr. Hattaway, could you spell your last name for
the record, please?
Yes.It 's H-A-T-T-A-W-A-Y.
And whom are you employed by and in what capacity?
My employer is the Idaho Public Utilities Commission,
and my job title is Deputy Administrator.
And, briefly, what is your educational and experience
background?
I have a Bachelor s of Science degree in accounting
from Brigham Young Uni versi ty, a Master s degree in business
administration from Pepperdine Uni versi ty.I have worked in my
present position for 15 years
--
16 years.One of my
responsibilites is preparing the Annual Assessment Fee of the
Regulated Utilities for the Commission.
And what is the purpose of your testimiony today?
This testimony presents the Commission s staff
position regarding the official protest of assessment submitted
by BG & CM Railroad.
And what is your position as the staff?
The Staff believes that the company misstated its
gross interest and income revenue on its March 5, 2007 , report
A second amount was subsequentlyto the Commission as 667 422.
reported on April 26, 2007 , as $240,000.The correct amount is
$238,850.25.
And what is the amount of the difference between the
Annual Assessment Fee being protested and the corrected fee?
The difference is $3,267.Tha t's the annual
assessment fee of $5,087.76 less the corrected fee of $1 820.76.
And have you reviewed the source documents related to
these reports as instructed by the Commission in its order of
30316?
Yes.Les Hancock of BG & CM said he prepared the
reports that I looked at shortly after coming to work for the BG
& CM and was not familiar with the source of the information for
all of the reports that he had to file.He also stated that the
$667 422 was an amount that included revenues from other
companies other than BG & CM and was definitely not the correct
He furnished the worksheet to support the $240,000.amount.
reviewed that document.The report was not mathematically
correct and would only support $238,803.Mr. Hancock stated
that he subsequently learned that that worksheet was used to
estimate the 2006 revenues.
And what did you do to substantiate the accuracy of
the gross intrastate operating revenue?
Mr. Hancock referred me to BG & CM' s home office in
Richmond, Missouri.And I was able to speak with Luke Feighert,
who provided a printout from the general ledger to the Gross
Intrastate Operating Income for BG & CM.I was able to speak
wi th him, and he faxed me a copy of the ledger page.
And would you spell Mr. Feighert' s last name for the
record?
Yes.It's F-E-I-G-H-E-R-T.
And what does the general ledger account show for the
amount of revenues?
It shows the Gross Intrastate Revenues of $238,850.25.
And after your conversation and your review of the
documents, have you formed a conclusion whether BG & CM
misreported its gross intrastate operating revenue?
They did this report two times.Yes.The corect
amount is $238,850.25.
And do you recommend using this amount as the correct
Gross Intrastate Operating Revenue?
Yes.
Does that conclude your testimony?
Yes.
MR. HOWELL:And the witness is available for any
questions by the Commission.
MR. KJELLANDER:Thank you, Mr. Hattaway.
Are there any questions posed by the Commission?
COMMISSIONER REDFORD:No.
COMMISSIONER KJELLANDER:None.
Thank you, Mr. Hattaway.
Mr. Howell, anything further?
MR. HOWELL:, Mr. Chairman.That completes
the staff's investigation of this matter.
COMMISSIONER KJELLANDER:Thank you, Mr. Howell.
Well , given the fact that Mr. Hancock is not on the
line, we won I t have an opportunity to hear from BG & CM.
Mr. Howell, would you take it upon yourself to
maybe try to contact Mr. Hancock and inform him of the
proceedings that have transpired.
And to the extent that anything else needs to be
called to the Commission; otherwise, it will be our intent to
try and close this record and render a decision as soon as
possible.
MR. HOWELL:We will contact Mr. Hancock and
apprise him of the facts of this morning.
COMMISSIONER KJELLANDER:Thank you very much.
There being nothing further to come before us
today, we will adj ourn this portion of the hearing.
(Proceedings concluded.
A D A
I hereby certify that the foregoing transcript was
taken down , as stated in the caption, and the questions and
answers thereto were reduced to writing by me; that the
foregoing pages represent a true and correct transcript of the
evidence upon said hearing to the best of my ability;
I further certify that I am not of kin or counsel to the parties
in the case; am not in the regular employ of counsel for any of
said parties; nor am I interested in the result of said case.
WITNESS my hand and official seal this th day of
#,
2007.
Holly R. Cotney
Certified Court Reporter
And Notary Public in and for
The State of Idaho
My commission expires 1/31/2012
Idaho CSR No. 263
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