intro.pdf

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

--PAGE 1--

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.

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, 2003
through June 30, 2004. (Some cases that were filed before June 30, 2004, but completed by November 30,
2004 are also included.)

Anyone with access to the Internet may also review the commission’s agendas, notices and decisions by
visiting the IPUC’s Web site at: www.puc.state.id.us. E-mail may be sent to the commission at:
[e-mail]. Commission records are also available for public inspection at the commission’s
Boise office, 472 W. Washington St., 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, typically for 30 or more pages.

The Idaho Public Utilities Commission, as outlined in its 2001 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.

--PAGE 2--

The Commissioners

Paul Kjellander
is serving his first term on the Idaho Public Utilities Commission, to which Gov.
Dirk Kempthorne appointed him in January 1999. His term expires in 2005. In April
2003, Kjellander was re-elected to a second term as 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
Transportation 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
Telecommunications Act of 1996 and vice chairman of the Council of State Governments-West “Smart
States Committee.” His interim legislative committee assignments included the Optional Forms of County
Government Committee, Capital Crimes Committee and the Private Property Rights Committee.
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.

--PAGE 3--

Dennis Hansen
was appointed to the commission in February 1995 by Gov. Phil Batt and re-appointed
by Gov. Dirk Kempthorne in 2001. His current term expires in 2007.
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 Commissioners (NARUC) and served on
the Federal Railroad Administration’s Safety Advisory Committee. He is president of
the Western Conference of Public Service Commissioners and, as such, will host the
Western Conference of Public Service Commissioners’ annual meeting in Boise June
19-22, 2005.
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.
A third-generation Idahoan, Commissioner Hansen and his wife, Marianne, have six children: Shelli,
Kristi, Chad, Heather, Ryan and Nikki.

--PAGE 4--

Marsha H. Smith
is serving her third term on the commission, to which she was appointed by Gov. Cecil
Andrus in January 1991, re-appointed by Gov. Phil Batt in January 1997 and re-
appointed by Gov. Dirk Kempthorne in January, 2003. Her term expires in 2009. A
Democrat, Commissioner Smith served as commission president from November 1991
to April 1995.
Commissioner Smith is a member and immediate past chair of the Electricity
Committee of the National Association of Regulatory Utilities Commissioners
(NARUC). She is on the NARUC Board of Directors and the Western Systems
Coordinating Council Board of Directors. She chairs the Western Interstate Energy
Board’s Committee for Regional Electric Power Cooperation and is a member of the Compliance and
Certification Committee of the North American Electric Reliability Council. She is also a member of the
Western Conference of Public Service Commissioners, the National Council for Electricity Policy, the
Harvard Electricity Policy Group and the Idaho State Bar.
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 biology/education from Idaho State University.
Before her appointment to the PUC, 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
have a small farm in southwestern Ada County.

--PAGE 5--

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

--PAGE 6--
Financial Summary

IPUC FISCAL YEAR 2000 - FISCAL YEAR 2004

Description FY 2000 FY 2001 FY2002 FY2003 FY2004
Personnel Costs $2,992,650 $3,137,426 $3,249,510 $3,314,191 $3,481,404
Travel $118,205 $140,713 $143,612 $137,710 $157,869
Consultants $144,316 $246,841 $137,211 $45,924 $25,197
Subscriptions $17,625 $19,389 $21,651 $18,603 $19,804
Emp. Training $26,920 $26,161 $26,646 $18,876 $30,447
Postage $18,819 $15,073 $15,611 $13,086 $11,265
Telephone $22,009 $37,276 $29,287 $24,580 $29,009
Office Supplies $16,678 $16,453 $17,965 $13,240 $15,063
Office Rent $231,821 $240,787 $232,247 $227,965 $226,441
Maintenance $21,694 $16,532 $25,494 $14,613 $9,666
Insurance $4,429 $6,464 $6,349 $6,084 $4,930
Office Equip. $2,873 $3,251 $59,799 $0.00 $0.00
Computer Eqpt. $45,096 $41,207 $40,944 $0.00 $0.00
Comm.’s Eqpt. $1,035 $1,503 $5,863 $0.00 $0.00
Other Expenses $77,928 $112,743 $114,588 $97,093 $99,264
============================================================
Total
Expenditures $3,742,098 $4,062,269 $4,144,006 $3,931,965 $4,110,359

Appropriations $4,123,500 $4,241,500 $4,433,100 $4,399,400 $4,581,800
--------------------------------------------------------------------------------------------------------
Unexpended
Balance $381,402 $179,231 $289,094 $467,435 $471,441

--PAGE 7--

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 sufficient rates.
The commission does not regulate publicly owned, municipal or cooperative utilities.
In setting rates, the commission must consider the needs of both the utility and its customers.
Customers must be ensured of paying a reasonable rate and utilities must be allowed to recover their
legitimate costs of serving of their customers and earning a fair rate of return. IPUC decisions can be
appealed to the Idaho Supreme Court.
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
that are 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. The commission conducts
its business in two types of meetings: hearings and decision meetings.
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-examination 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.

--PAGE 8--

To provide for more public input in a less formal setting, commission staff members have begun
traveling to areas impacted by potential commission decisions to conduct workshops. Unlike a formal
hearing where members of the public testify but cannot ask questions of commissioners, a workshop
allows citizens to ask questions and offer suggestions to commission staff.
The commission also conducts regular decision meetings to consider issues on an agenda prepared by
the commission secretary and posted in advance of the meeting. These meetings are usually held Mondays
at 1:30 p.m., although by law the commission 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.

--PAGE 9--

Commission Staff

To help ensure its decisions are fair and workable, the commission employs a staff of about 50
people - engineers, rate analysts, attorneys, accountants, 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 commission
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 research 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 commission 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.
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,
preparing materials that allow for effective public participation in IPUC proceedings and preparing the
annual report.

--PAGE 10--
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 investigates all railroad-crossing
accidents and makes recommendations for safety improvements to crossings.
As part of its regulatory authority, the commission evaluates the discontinuance and abandonment
of railroad service in Idaho by conducting an independent 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 pipeline safety section oversees the safe operation of the intrastate natural gas pipelines and
facilities in Idaho.
The commission’s pipeline safety personnel verify compliance of state and federal regulations by
on-site inspections of intrastate gas distribution systems operating in the state. Part of the inspection
process includes a review of record-keeping practices and compliance with design, construction,
operation, maintenance and drug/alcohol abuse regulations.
Key objectives of the program are to monitor accidents and violations, to identify their
contributing factors and to implement practices to avoid accidents. All reportable accidents will be
investigated and appropriate reports filed with the U.S. Department of Transportation in a timely manner.

--PAGE 11--
Legal Division
Five deputy attorneys general are assigned to the commission from the Office of the Attorney
General and have permanent offices at IPUC headquarters. 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 attorneys 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 adequacy of utility services and
frequently help resolve customer complaints. The group develops computer models of utility operations
and reviews utility forecasts of energy usage and the need for new facilities.
The Telecommunications Section, which consists of five telecommunications 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 investigators 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 billing, deposits, line
extensions and other service problems.
Consumer Assistance monitors Idaho utilities to verify they are complying 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.

--PAGE 12--

Commission Website

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.
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. Most of the major utilities’ tariffs are also available to the public on our Web
site.
Citizens can subscribe to a multitude of e-mail lists allowing them to receive 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 commission is also available from the website.
The commission is committed to meeting the information needs of our citizens and is working
toward making most public documents available online. We encourage participation in the commission
process via the Internet.

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Idaho Public Utilities Commission
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