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Page 1 IDAHO PUBLIC UTILITIES COMMISSION 2001
ANNUAL REPORT
Introduction
The commission shall make and submit to the governor on or before the
first day of December of each year, a report containing a full and complete
account of its transactions, and proceedings for the preceding fiscal year,
ending June thirtieth, together with such other facts, suggestions, and
recommendations as it may deem of value to the people of the state.
The Public Utilities Law
Idaho Code 61-214
With this report, the Idaho Public Utilities Commission has satisfied Idaho Code
61-214; this is a “full and complete account” of the most significant cases to
come before the commission from July 1, 2000 through June 30, 2000. (Some
cases that were filed before June 30, 2000, but completed by November 30,
2001 are also included.) An accounting of each and every action taken by the
commission for this time period may be referenced through the commission’s
Summary of Utilities Activities and Summary of Rail Activities compiled monthly
by the commission’s Utilities and Rail divisions. These summaries provide a
chronological list of all applications, orders, notices, errata and tariff actions and
are available upon request.
Anyone with access to the Internet may also review the commission’s agendas,
notices and decisions by visiting the IPUC’s World Wide Web home page at:
http://www.puc.state.id.us. E-mail may be sent to the commission at:
[e-mail]. Commission records are also available for public inspec-
tion at the commission’s Boise office Monday through Friday, 8 a.m. to 5 p.m.
A nominal fee of 5 cents per page may be charged for the cost of copying.
The Idaho Public Utilities Commission, as outlined in its 1997 Strategic Plan,
serves the citizens and utilities of Idaho by determining fair, just and reasonable
rates for utility commodities and services which are to be delivered safely,
reliably and efficiently. During the period covered by this report, the commission
also had responsibility for ensuring that all rail services operating within Idaho do
so in a safe and efficient manner. Motor carrier responsibilities have been
transferred to the Department of Law Enforcement and Idaho Transportation
Department, with the commission retaining its jurisdiction in rail carrier matters.
IDAHO PUBLIC UTILITIES COMMISSION Page 22001
ANNUAL REPORT
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Mailing Address:
P.O.Box 83720
Boise, Idaho 83720-0074
208/334-0300
Web site: www.puc.state.id.us
Commission Secretary 334-0338
[e-mail]
Executive Administrator 334-0330
Public Information Officer 334-0339
[e-mail]
Utilities Division 334-0368
Legal Division 334-0324
Rail Section and Pipeline Safety 334-0330
Consumer Assistance Section 334-0369
Outside Boise, Toll-Free Consumer Assistance 1-800-432-0369
Idaho Telephone Relay Service (available statewide)
Voice:1-800-377-1363
Text Telephone:[phone]
TRS Information: 1-800-368-6185
The Commissioners
Page 3 IDAHO PUBLIC UTILITIES COMMISSION 2001
ANNUAL REPORT
is serving his first term on the Idaho Public
Utilities Commission, to which Gov. Dirk
Kempthorne appointed him in January
1999. In April of this year, Kjellander was
elected president of the commission.
Commissioner Kjellander, a Republican,
was elected to three terms in the Idaho
House of Representatives, where he served
since 1994 as a member of the House State
Affairs, Judiciary and Rules, Ways and
Means, Local Government and Transporta-
tion committees. During his last term in
office, Commissioner Kjellander was
elected House Majority Caucus Chairman.
His legislative service includes membership
on the Legislature’s Information Technology
Advisory Council and the House/Senate
Joint Committee on Technology. He also
served as co-chairman of the Legislative
Task Force on the Federal Telecommunica-
tions Act of 1996 and vice chairman of the
Council of State Governments-West “Smart
States Committee.” His interim legislative
Paul Kjellander
committee assignments included the Optional Forms of County Government
Committee, Capital Crimes Committee and the Private Property Rights Com-
mittee.
Commissioner Kjellander served as director of Boise State University’s
College of Applied Technology Distance Learning, interim program head of
broadcast technology, station manager of BSU Radio Network, director of the
Special Projects Unit for BSU Radio, executive producer/newscaster for BSU
Radio and director of News and Public Affairs. His undergraduate degrees from
Muskingum College, Ohio, were in communications, psychology and art. He
holds a master’s degree in telecommunications from Ohio University.
As a member of the National Association of Regulatory Commissioners,
Commissioner Kjellander serves on the Telecommunications and Consumer
Affairs Committees. He and his wife, Radelle, are the parents of a daughter,
Allison, and two sons, Sky and Justus.
IDAHO PUBLIC UTILITIES COMMISSION Page 42001
ANNUAL REPORT
The Commissioners, continued
was appointed to the commission in February
1995 by Gov. Phil Batt and re-appointed by
Gov. Dirk Kempthorne in 2001.
Commissioner Hansen, who served as
commission president from April 1997 to April
2001, is a member of the Committee on Gas
and the Committee on Water of the National
Association of Regulatory Utility Commission-
ers (NARUC) and served on the Federal
Railroad Administration’s Safety Advisory
Committee.
Before his appointment to the commission,
he was an accountant with Monsanto Co. in
Soda Springs, Idaho.
Commissioner Hansen, a Republican, was
elected five times to the Idaho State Senate,
where he served from 1987 to 1995. He
chaired the Senate Transportation Committee
from 1991 to 1995 and was a member of the
Agricultural Affairs and Finance committees.
His colleagues elected him to service on the
Legislative Council from 1993 to 1995. From
1973 to 1977, Commissioner Hansen served on the Soda Springs City Council.
He received a bachelor of science degree in business management from
Brigham Young University in Provo, Utah. He also attended Ricks College
(BYU-Idaho) in Rexburg, in 1960-61.
A third-generation Idahoan, Commissioner Hansen and his wife, Marianne,
have six children: Shelli, Kristi, Chad, Heather, Ryan and Nikki.
Dennis S. Hansen
Page 5 IDAHO PUBLIC UTILITIES COMMISSION 2001
ANNUAL REPORT
The Commissioners, continued
is serving her second term on the commission,
to which she was ap-pointed by Gov. Cecil
Andrus in January 1991 and re-appointed by
Gov. Phil Batt in January 1997. A Democrat,
Commissioner Smith served as commission
president from November 1991 to April
1995.
Commissioner Smith chairs the Electricity
Committee of the National Association of
Regulatory Utilities Commissioners
(NARUC). She also serves on NARUC’s
Board of Directors and Ad Hoc Committee
on Electric Industry Restructuring. Smith also
chairs the Committee for Regional Electric
Power Cooperation of the Western Interstate
Energy Board and is a member of the Harvard
Electricity Policy Group.
Commissioner Smith received a juris
doctorate degree from the University of
Washington in 1980. She has a master of
library science degree from Brigham Young
University and a bachelor of science degree in
Marsha H. Smith
biology/education from Idaho State University.
Prior to her appointment, Commissioner Smith worked as a deputy attorney
general for the commission and in the business regulation and consumer affairs
division of the Idaho Office of the Attorney General.
A fourth-generation Idahoan, Commissioner Smith is married and has two
sons. She and her husband operate a small farm in southwestern Ada County.
IDAHO PUBLIC UTILITIES COMMISSION Page 62001
ANNUAL REPORT
IDAHO PUBLIC UTILITIES COMMISSION
1913 - 1999
Commissioner From To
J. A. Blomquist May 8, 1913 Jan. 11, 1915
A. P. Ramstedt May 8, 1913 Feb. 8, 1917
D. W. Standrod May 8, 1913 Dec. 1, 1914
John W. Graham Dec. 1, 1914 Jan. 13, 1919
A. L. Freehafer Jan. 14, 1915 Jan. 31, 1921
George E. Erb Dec. 8, 1917 April 14, 1923
Everett M. Sweeley May 23, 1919 Aug. 20, 1923
J. M. Thompson Feb. 1, 1921 Dec. 20, 1932
Will H. Gibson April 16, 1923 June 29, 1929
F. C. Graves Sept. 7, 1923 Nov. 12, 1924
Frank E. Smith March 6, 1925 Feb. 25, 1931
J. D. Rigney July 2, 1929 Sept. 30, 1935
M. Reese Hattabaugh March 2, 1931 Jan. 26, 1943
Harry Holden March 27, 1933 Jan. 31, 1939
J. W. Cornell Oct. 1, 1935 Jan. 11, 1947
R. H. Young Feb. 1, 1939 March 19, 1944
B. Auger Feb. 1, 1943 March 9, 1951
J. D. Rigney March 30, 1944 April 30, 1945
W. B. Joy May 1, 1945 March 9, 1951
H. N. Beamer Jan. 17, 1947 Dec. 31, 1958
George R. Jones March 12, 1951 Jan. 31, 1957
H. C. Allen March 12, 1951 Feb. 28, 1957
A. O. Sheldon March 1, 1957 June 30, 1967
Frank E. Meek Feb. 1, 1957 Feb. 5, 1964
Ralph H. Wickberg Jan. 14, 1959 Feb. 23, 1981
Harry L. Nock May 1, 1964 Sept. 30, 1974
Ralph L. Paris July 1, 1967 Oct. 5, 1967
J. Burns Beal Dec. 1, 1967 April 1, 1973
Robert Lenaghen April 1, 1973 April 15, 1979
M. Karl Shurtliff Oct. 1, 1974 Dec. 31, 1976
Matthew J. Mullaney Jan. 2, 1977 Feb. 15, 1977
Conley Ward, Jr.March 7, 1977 Feb. 9, 1987
Perry Swisher April 16, 1979 Jan. 21, 1991
Richard S. High Feb. 24, 1981 April 30, 1987
Dean J. Miller March 16, 1987 Jan. 30, 1995
Ralph Nelson May 4, 1987 Feb. 12, 1999
Marsha H. Smith Jan. 21, 1991 Now Serving
Dennis S. Hansen Feb. 1, 1995 Now Serving
Paul Kjellander Feb. 15, 1999 Now Serving
The Commissioners, continued
Only 39 people have
served as commission-
ers of the Idaho PUC.
2001
ANNUAL REPORTPage 7 IDAHO PUBLIC UTILITIES COMMISSION
Financial Summary
IPUC FISCAL YEAR 1997 - FISCAL YEAR 2001
Description FY 1997 FY 1998 FY 1999 FY2000 FY2001
Personnel Costs $2,746,215 $2,975,862 $3,197,151 $2,992,650 $3,137,426
Travel $101,062 $115,090 $125,805 $118,205 $140,713
Consultants $196,833 $99,006 $47,786 $144,316 $246,841
Subscriptions $22,660 $23,459 $23,520 $17,625 $19,389
Emp. Training $22,240 $22,670 $37,622 $26,920 $26,161
Postage $29,479 $12,692 $30,301 $18,819 $15,073
Telephone $34,576 $34,465 $32,017 $22,009 $37,276
Office Supplies $23,866 $23,896 $19,960 $16,678 $16,453
Office Rent $200,315 $231,972 $238,767 $231,821 $240,787
Maintenance $29,866 $22,265 $21,744 $21,694 $16,532
Insurance $4,631 $3,093 $2,023 $4,429 $6,464
Automobiles $18,680 $22,442 - --
Office Equip.$43,579 $9,457 $5,506 $2,873 $3,251
Computer Eqpt.$59,236 $44,132 $46,323 $45,096 $41,207
Comm.’s Eqpt. -$175 $41,222 $1,035 $1,503
Other Expenses $231,098 $99,449 $116,039 $77,928 $112,743
Total Expend.$3,788,208 $3,739,125 $3,985,786 $3,742,098 $4,062,269
Appropriations $3,889,300 $3,952,500 $4,324,300 $4,123,500 $4,241,500
Unexpnded Bal.$101,092 $213,375 $342,404 $381,402 $179,231
IDAHO PUBLIC UTILITIES COMMISSION Page 82001
ANNUAL REPORT
... assuring
adequate
service and
affixing just,
reasonable
and sufficient
rates.
Commission Structure
and Operations
Under state law, the Idaho Public Utilities Commission supervises and
regulates Idaho’s investor-owned utilities - electric, gas, telecommunications
and water - assuring adequate service and affixing just, reasonable and suffi-
cient rates.
The commission does not regulate publicly owned, municipal or coopera-
tive utilities. In setting rates, the commission must consider the needs of both the
utility and its customers.
The governor appoints the three commissioners with confirmation by the
Idaho Senate. No more than two commissioners may be of the same political
party. The commissioners serve staggered six-year terms. Vacancies that occur
when the Idaho Senate is not in session are filled by gubernatorial appointment
subject to confirmation by the Senate upon reconvening in regular session.
The governor may remove a commissioner before his/her term has expired
for dereliction of duty, corruption or incompetence.
The three-member commission was established by the 12th Session of the
Idaho Legislature and was organized May 8, 1913 as the Public Utilities
Commission of the State of Idaho. In 1951 it was reorganized as the Idaho
Public Utilities Commission. Statutory authorities for the commission are
established in Idaho Code titles 61 and 62.
The IPUC has quasi-legislative and quasi-judicial as well as executive
powers and duties.
In its quasi-legislative capacity, the commission sets rates and makes rules
governing utility operations. In its quasi-judicial mode, the commission hears
and decides complaints, issues written orders similar to court orders and may
have its decisions appealed to the Idaho Supreme Court. In its executive
capacity, the commission enforces state laws affecting the utilities and rail
industries.
Commission operations are funded by fees assessed on the utilities and
railroads it regulates. Annual assessments are set by the commission each year
in April within limits set by law.
The commission president is its chief executive officer. Commissioners meet
on the first Monday in April in odd-numbered years to elect one of their own to
a two-year term as president. The president signs contracts on the
commission’s behalf, is the final authority in personnel matters and handles other
administrative tasks.
Chairmanship of individual cases is rotated among all three commissioners.
Public meetings are conducted regularly. The commission conducts its business
in two types of meetings: hearings and decision meetings.
2001
ANNUAL REPORTPage 9 IDAHO PUBLIC UTILITIES COMMISSION
Structure and Operations, continued
Members of the
general public
may address the
commission at a
hearing without
prior notice or
formal interven-
tion. However,
those seeking the
full rights of par-
ties - such as the
right to cross-
examine other
witnesses or to
make and argue
motions - must file
a petition for
intervenor status.
Formal hearings on utility and railroad issues are held on a case-by-case
basis, often in the service area of the utility under consideration to allow maxi-
mum public participation. These hearings resemble judicial proceedings and are
recorded as well as transcribed by a court reporter. Formal parties to the case
under consideration present testimony and evidence, subject to cross-examina-
tion by attorneys and staff from the other parties and the commissioners.
Members of the general public may testify before the commission at a
hearing without prior notice or formal intervention. However, those seeking the
full rights of parties - such as the right to cross-examine other witnesses or to
make and argue motions - must file a petition for “intervenor” status.
The commission also holds decision meetings to consider issues set forth on
an agenda prepared by the commission secretary and posted in advance of the
meeting. These meetings are usually held weekly, although by law the commis-
sion is required to meet only once a month. Members of the public are welcome
to attend decision meetings.
Typically, decision meetings consist of the commission’s review of decision
memoranda prepared by commission staff. Minutes of the meetings are taken
and decisions reached at these meetings are preliminary, becoming final only
when issued in a written order signed by a majority of the commission.
Formal hearings on utility and railroad issues are held on a case-by-case basis,
often in the service area of the utility under consideration to allow maximum
public participation. These hearings resemble judicial proceedings and are
recorded as well as transcribed by a court reporter. Formal parties to the case
under consideration present testimony and evidence, subject to cross-examina-
tion by attorneys and staff from the other parties and the commissioners.
Members of the general public may testify before the commission at a
hearing without prior notice or formal intervention. However, those seeking the
full rights of parties - such as the right to cross-examine other witnesses or to
make and argue motions - must file a petition for “intervenor” status.
IDAHO PUBLIC UTILITIES COMMISSION Page 102001
ANNUAL REPORT
The commission
staff is organized
in three divisions -
administration,
legal and utilities,
plus two sections,
rail and pipeline
safety.
The staff acts as a
separate party to
a case, presenting
its own testimony,
evidence and
expert witnesses.
Commission Staff
To help ensure its decisions are fair and workable, the commission
employs a staff of about 50 people - engineers, rate analysts, attorneys, ac-
countants, investigators, economists, secretaries and other support personnel.
The commission staff is organized in three divisions - administration, legal and
utilities.
The staff analyzes each petition, complaint, rate increase request or
application for an operating certificate received by the commission. In formal
proceedings before the commission, the staff acts as a separate party to the
case, presenting its own testimony, evidence and expert witnesses. The com-
mission considers staff recommendations along with those of other participants
in each case - including utilities, public, agricultural, industrial, business and
consumer groups.
Administration
The Administrative Division is responsible for coordinating overall
IPUC activities. The division includes the three commissioners, two policy
strategists, a commission secretary, an executive administrator, an executive
assistant, a public information officer and support personnel.
The two policy strategists are executive level positions reporting
directly to the commissioners with policy and technical consultation and re-
search support regarding major regulatory issues in the areas of electricity,
telecommunications, water and natural gas. Strategists are also charged with
developing comprehensive policy strategy, providing assistance and advice on
major litigation before the commission and acting as liaison between the com-
mission and its staff, utility representatives, public officials and public agencies
and organizations.
The commission secretary, a post established by Idaho law, keeps a
precise public record of all commission proceedings. The secretary issues
notices, orders and other documents to the proper parties and is the official
custodian of documents issued by and filed with the commission. Most of these
documents are public records.
The executive administrator has primary responsibility for the
commission’s fiscal and administrative operations, preparing the commission
budget and supervising fiscal, administration, public information, personnel,
information systems, rail section operations and pipeline safety. The executive
administrator also serves as a liaison between the commission and other state
agencies and the Legislature.
The executive assistant is responsible for the commission’s Website,
electronic filings and other special projects assigned by the commissioners.
2001
ANNUAL REPORTPage 11 IDAHO PUBLIC UTILITIES COMMISSION
Commission Staff, continued
The public information officer is responsible for informing the public
and the media of commission decisions, meetings and activities; responding to
requests for information; coordinating public hearings; and preparing materials
that allow for effective public participation in IPUC proceedings.
Rail Section
The Rail Section oversees the safe operations of railroads that move
passengers and freight in and through Idaho and enforces state and federal
regulations safeguarding the transportation of hazardous materials by rail in
Idaho. The commission’s rail safety specialist inspects railroad crossings and
rail clearances for safety and maintenance deficiencies. The Rail Section investi-
gates all railroad-crossing accidents and makes recommendations for safety
improvements to crossings.
As part of its regulatory authority, the commission evaluates the discon-
tinuance and abandonment of railroad service in Idaho by conducting an inde-
pendent evaluation of each case to determine whether the abandonment of a
particular railroad line would adversely affect Idaho shippers and whether the
line has any profit potential. Should the commission determine abandonment
would be harmful to Idaho interests, it then represents the state before the
federal Surface Transportation Board, which has authority to grant or deny line
abandonments.
Pipeline Safety Program
The Idaho Public Utilities Commission continued development during
2001 of a state natural gas pipeline safety program to verify that public gas
utilities operating in the state are in compliance with federal regulations.
The commission hired a pipeline safety specialist who will conduct
on-site inspections of each intrastate operator of transmission or distribution gas
systems in Idaho. The inspector will review record-keeping practices and
compliance with design, construction, operation, maintenance and drug/alcohol
abuse regulations. Investigations of all reportable accidents will be made quickly.
The appropriate reports will be filed with the Department of Transportation in a
timely manner.
A key objective of the program is to monitor accidents and violations to
identify contributing factors and implement practices to avoid accidents.
IDAHO PUBLIC UTILITIES COMMISSION Page 122001
ANNUAL REPORT
Commission Staff, continued
Legal Division
Five deputy attorneys general are assigned to the commission from
the Office of the Attorney General and have permanent offices at IPUC head-
quarters. The IPUC attorneys represent the staff in all matters before the
commission, working closely with staff accountants, engineers, investigators and
economists as they develop their recommendations for rate case and policy
proceedings.
In the hearing room, IPUC attorneys coordinate the presentation of the
staff’s case and cross-examine other parties who submit testimony. The attor-
neys also represent the commission itself in state and federal courts and before
other state or federal regulatory agencies.
Utilities Division
The Utilities Division, responsible for technical and policy analysis of
utility matters before the commission, is divided into three sections.
The Accounting Section of seven auditors audits utility books and
records to verify reported revenue, expenses and compliance with commission
orders. Staff auditors present the results of their findings in audit reports as well
as in formal testimony and exhibits. When a utility requests a rate increase,
cost-of-capital studies are performed to determine a recommended rate of
return. Revenues, expenses and investments are analyzed to determine the
amount needed for the utility to earn the recommended return on its investment.
The Engineering Section, which includes four engineers, reviews
the physical operations of utilities. Staff engineers determine the cost of serving
various types of customers, design utility rates and allocate costs between
Idaho and the other states served by Idaho utilities. They determine the cost
effectiveness of conservation and co-generation programs, evaluate the ad-
equacy of utility services and frequently help resolve customer complaints. The
group develops computer models of utility operations and reviews utility fore-
casts of energy usage and the need for new facilities.
The Telecommunications Section, which consists of five telecom-
munications analysts, reviews and recommends commission action on
telecommunications issues and new telecommunication services filed with the
commission. Telecommunications analysts propose ways to allocate revenue
among the various types of telecommunication services and recommend rates to
recover that revenue.
The Consumer Assistance Section includes six division investiga-
tors who resolve conflicts between utilities and their customers. Customers
faced with service disconnections often seek help in negotiating payment
arrangements. Consumer Assistance may mediate disputes over billings, depos-
The Utilities Division,
is divided into
four sections:
1. Accounting
2. Engineering
3. Telecommunica-
tions
4. Consumer
Assistance
2001
ANNUAL REPORTPage 13 IDAHO PUBLIC UTILITIES COMMISSION
Consumer Assistance
investigators resolve
conflicts between
utilities and their
customers.
its, line extensions and other service problems.
Consumer Assistance monitors Idaho utilities to verify they are comply-
ing with commission orders and regulations. Investigators participate in general
rate and policy cases when rate design and customer service issues are brought
before the commission.
Most consumers contact the commission by telephone or by e-mail, via
the commission’s Website. Staff members may negotiate payment arrangements
with utilities on behalf of consumers and, when appropriate, refer clients to
social service agencies, financial aid programs or budget counseling services.
As traditionally regulated services become deregulated, the Consumer
Assistance Section’s role of educating consumers and mitigating complaints with
non-regulated utilities has increased. The increase in companies providing
services equates to an increase in consumer inquiries and complaints. Also on
the increase are disputes between companies providing services, especially
among telecommunications providers.
The Consumer Assistance Section is also responsible for conducting
quality of service and compliance investigations and customer satisfaction
surveys.
Commission Staff, continued
Commission Web Site
http://www.puc.state.id.us
The commission was proud to be a leader in state government Web sites
and has been online since 1995. The commission recognizes the need to provide
information to the public in whatever media is available.
The commission Web site is currently undergoing a major overhaul, and
the goal is to allow citizens across the state equal access to commission records
and information 24 hours a day, seven days a week.
Currently, citizens can file complaints about a utility or comment on a
current case via our Web site. They can access our rules, statutes, annual report,
orders, press releases, commission agendas, and other special reports online. We
also have a pilot program in progress for filing of tariffs electronically. Most of the
major utilities in the state have electronic tariffs on file. These tariffs are available
to the public on our Web site.
Citizens can subscribe to a multitude of e-mail lists allowing them to re-
ceive information automatically via e-mail, including commission agendas, orders
and press releases. Consumer information, including a description of the
commission’s processes and how a consumer may provide input to the commis-
sion, is also available from the website.
The commission is committed to meeting the information needs of our
citizens and encourages participation in its process via the Internet.
IDAHO PUBLIC UTILITIES COMMISSION Page 142001
ANNUAL REPORT
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Commission Staff, continued