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Home My WebLink AboutIntro.pdfAnnual Report 2008 P a g e | 1 December 1, 2008 The Honorable C. L. “Butch” Otter Office of the Governor P.O. Box 83720 Boise, ID 83720‐0034 Dear Governor Otter: It is my distinct pleasure to submit to you, in accordance with Idaho Code §61‐214, the Idaho Public Utilities Commission 2008 Annual Report. This cover letter will summarize the year’s highlights and budget information. A more detailed, bound report will be issued in early January for your office and for the benefit of legislators serving on committees pertinent to PUC‐related issues. Idaho customers of major electric and gas utilities are learning that, unfortunately, we are not immune to the upward pressures on utility rates occurring nationwide. All four of the investor‐owned electric utilities we regulate experienced significant rate increases during 2008. Gas customers also had increases in their yearly gas supply cost adjustments, although late year declines in wholesale gas market prices reduced the sizes of those increases. Effective Jan. 1, customers of Rocky Mountain Power in eastern Idaho received an average 4.89 percent increase, nearly two percentage points less than the 6.7 percent originally sought by the company. On Sept. 19, Rocky Mountain filed with the commission for an average 4 percent increase. That case is anticipated to be resolved sometime next spring. On March 1, new rates became effective for Idaho Power customers as the result of a settlement between the company and all the parties to the case, including commission staff. The company sought an average 10.35 percent increase and was granted 5.2 percent. On June 1, Idaho Power customers received an average 10.7 percent increase in the annual Power Cost Adjustment, coupled with a 1.37 percent increase to pay for the Danskin natural gas plant near Mountain Home and a 1.5 percent increase in the Energy Efficiency Rider. Customers also received a nearly 1 percent decrease in our first‐ ever Fixed Cost Adjustment. On June 27, Idaho Power filed yet another rate case for an average 6.3 percent increase. That case is expected to be resolved in February, with public hearings scheduled for later this month. On Oct. 1, customers of Avista Utilities in north‐central and northern Idaho received increases in both their base electric and gas rates (the first since 2004) as well as increases in the one‐year Power Cost Adjustment (PCA) and Purchased Gas Cost Annual Report 2008 P a g e | 2 Adjustment (PGA). Base electric rates increased an average 12 percent and base gas rates increased by 4.7 percent. The one‐year Power Cost Adjustment increased from 0.267 cents per kWh to more than a half‐cent at 0.61 cents per kWh. The one‐year Purchased Gas Cost Adjustment was an increase of about 4 percent. Even the 75 customers of our smallest electric utility, Atlanta Power, experienced a 33.6 percent emergency surcharge to pay for system repairs and upgrades. A rate case to increase base rates by 60.6 percent was still pending at year’s end. On the natural gas side, customers of Intermountain Gas in southern Idaho received an increase in their annual PGA after two years of decreases. The increase was originally going to be about 18 percent, but declining wholesale market gas prices led the company to adjust their filing to reflect about a 9.2 percent increase. Avista’s original PGA increase was for 14 percent, but it later adjusted down to 4 percent. To help customers deal with what looks like may be annual increases in the near future, the commission opened a docket to examine energy affordability issues. Commission staff members, utilities, representatives of consumer groups and legislators are exploring ways to make it easier for customers to pay bills, to promote energy efficiency and to increase funding for low‐income assistance. A final report from staff with recommendations is due Jan. 16. Customer rates were also significantly impacted by a Ninth Circuit of Appeals ruling in 2007 that all but eliminated the Bonneville Power Administration’s Residential Exchange Program credit that customers of Idaho’s investor‐owned utilities have enjoyed for years. BPA has been forced by the court’s decision to take some steps that reduced the credit, but we believe the agency has overreached in its decision to require Idaho utilities to pay back some credits BPA believes it is owed. The net effect has been the elimination of the credit for most of Idaho’s residential and small‐farm customers of investor‐owned utilities. We believe that’s a violation of the Northwest Power Act and, in response, we are intervening in a BPA rate case now before the Federal Energy Regulatory Commission to protest BPA’s action. I am pleased to report that, after nearly three years of deliberation between Idaho’s regulated utilities, wind developers and state regulators, we were able to resolve three major cases involving how much it costs to add wind to utilities’ transmission grids have finally been resolved. Three orders issued in February established the amount of discounts utilities can assess against wind developers to account for the cost of integrating wind into their systems. The orders also removed a cap on the size of small‐power projects that can qualify for a rate published by the commission. We’re hoping these actions can encourage more wind development in Idaho at costs that won’t be excessive for utilities or customers. Annual Report 2008 P a g e | 3 All of our utilities report that they are behind in generation and transmission investment. They’re looking to catch up in future years, which could further impact customer rates. During 2008, we received many comments from Rocky Mountain Power customers in southeastern Idaho regarding a new transmission line from a new substation at Downey south to a substation near the Salt Lake airport. We can tell from the nature of those comments that any transmission expansion is going to be tracked closely by customers. Idaho Power and Rocky Mountain Power are collaborating on the Gateway Transmission Project that will bring energy from Wyoming through southern Idaho. Though the commission does not have siting authority for these projects, we do examine them to ensure they are needed and beneficial to customers of our regulated utilities. We had a number of very significant water cases this year involving smaller, rural water companies. A major goal for the Commission continues to be to get a better handle on the service quality of our smaller water companies. Internally, I am also pleased to report that we continue to maintain our current staff level despite a growing caseload. Fortunately, we’ve had no employee turnover in the last calendar year and only one retirement. We have many employees with college degrees and advanced degrees who could do well in the private sector, so we are gratified by their continued service to Idaho. Finally, one of Idaho’s own, Commissioner Marsha Smith, completed a successful and productive year as president of the National Association of Regulatory Utility Commissioners. She brought honor to the state with her dedicated service. While she continues to be very active in the national association, we are glad to have her back in Idaho on a more frequent basis. I am pleased to present you with this summary of the commission’s activities during 2008. Attached is our annual Financial Summary. It has been a privilege and an honor serving the people of Idaho this year. Sincerely, Mack A. Redford President Annual Report 2008 P a g e | 1 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.idaho.gov Commission Secretary 334‐0338 jean.jewell@puc.idaho.gov Executive Administrator 334‐0330 Public Information Officer 334‐0339 gene.fadness@puc.idaho.gov. 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: 1‐800‐377‐3529 TRS Information: 1‐800‐368‐6185 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 during the 2008 calendar year. (The financial report on Page 8 covers Fiscal Year July 1, 2007 through June 30, 2008.) Anyone with access to the Internet may also review the commission’s agendas, notices, case information and decisions by visiting the IPUC’s Web site at: www.puc.idaho.gov. 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 Strategic Plan, serves the citizens and utilities of Idaho by determining fair, just and reasonable rates for utility commodities and services that are to be delivered safely, reliably and efficiently. During the period covered by this report, the commission also had responsibility for ensuring all rail services operating within Idaho do so in a safe and efficient manner. The commission also has a pipeline safety section that oversees the safe operation of the intrastate natural gas pipelines and facilities in Idaho. Annual Report 2008 P a g e | 2 The Commissioners Mack A. Redford Commisisoner Redford was appointed to the commission in February 2007 by Gov. Butch Otter. He has since served as president of the commission. His term expires in 2013. At the time of his appointment, Commissioner Redford practiced law for the Boise‐based firm of Elam & Burke PA, specializing in commercial transactions, construction and engineering law, mediation, real estate and general business. Redford grew up in the Weiser and Caldwell areas, graduating from Caldwell High School. He received both his bachelor’s and law degree from the University of Idaho and in 1967 became a deputy in the Idaho attorney general’s office. In 1977, he became a deputy attorney general for the Trust Territory of the Pacific Islands, headquartered in Saipan, Northern Mariana Islands. The territory included a chain of 2,000 islands stretching from Hawaii to the Philippines. In 1981, Redford became general counsel for Morrison Knudsen Engineers and Morrison Knudsen International, a position that took him to Saudi Arabia where MK was building the King Khalid Military City. In 1990‐91, Redford was based in Folkestone, England, where he was legal counsel for the Channel Tunnel Contractors, the builders of the 31‐mile Channel Tunnel connecting England and France. It is the second‐largest rail tunnel in the world. In 1992, Commissioner Redford joined the Boise firm of Park & Burkett. In 1993, he was retained by the World Bank of the Government of Nepal as contract and claims counsel for the Arun Ill Hydroelectric Project. In 1996, he became general counsel for Micron Construction, which was later acquired by Kaiser Engineers. He joined Elam & Burke in 2001. Commissioner Redford and his wife, Nancy, are the parents of two children. Jim D. Kempton Commissioner Kempton began his service on the commission on Oct. 22. 2007. Kempton was appointed by Gov. C.L. “Butch” Otter to fill the unexpired term of Commissioner Paul Kjellander. Gov. Otter appointed Kjellander to head the newly created Office of Energy Resources. Before he was appointed to the commission, Kempton was one of two Idaho representatives on the Northwest Power and Conservation Council, appointed to that post by former Idaho Gov. Dirk Kempthorne. While on the council, he also acted as a natural resource cabinet member for Gov. Otter. Annual Report 2008 P a g e | 3 Kempton, of Albion, was a member of the Idaho House of Representatives from 1991‐ 2000, where he served on the House Revenue and Taxation Committee and chaired the Transportation and Defense Committee. Earlier, he served for two years on the Environmental Affairs Committee. Kempton earned his bachelor's and master's degrees in physics from the University of Idaho. He was a fighter pilot in the United States Air Force and an assistant professor of physics at the United States Air Force Academy. He also worked in the Pentagon as Department of Defense liaison between the Secretary of Commerce and Secretary of Defense on international co‐production programs. His Pentagon assignments included Air Force research and development responsibilities in the F‐16 fighter program and coordinating Iranian Program Review briefings to the Secretary of the Air Force. He returned to Idaho in 1981 and was engaged in ranching until 1990, when he was elected to the Idaho Legislature. He is a former member of the "Idaho EPSCoR" Board, a National Science Foundation experimental program to stimulate competitive research. He and his wife, Susan, are the parents of two grown daughters. Marsha H. Smith Commissioner Smith is serving her third term on the commission. Her current term expires in January 2009. Smith, a Democrat, served as commission president from November 1991 to April 1995. In November 2007, Commissioner Smith was elected president of the National Association of Regulatory Utility Commissioners (NARUC) for a one‐year term. She serves on the NARUC Board and Executive Committee, is a member of NARUC’s Committee on Energy Resources and the Environment and past chair of NARUC’s Electricity Committee. She is an elected member of the Western Electricity Coordinating Council Board of Directors, co‐ chair of the National Action Plan for Energy Efficiency and co‐chair of the Steering Committee of the Northern Tier Transmission Group. She represents Idaho on the Western Interconnection Regional Advisory Body and chaired the Western Interstate Energy Board’s Committee for Regional Electric Power Cooperation from October 1999 to October 2005. She is a member of the Electric Power Research Institute's Advisory Council, the National Council for Electricity Policy Steering Committee, the Harvard Electricity Policy Group, the Consortium for Electric Reliability Technology Solutions, the Western Conference of Public Service Commissioners and the Idaho State Bar. Smith received a bachelor of science degree in biology/education from Idaho State University, a master of library science degree from Brigham Young University and her law degree from the University of Washington. Before her appointment to the commission, Commissioner Smith served as deputy attorney general in the business regulation/consumer affairs division of the Office of the Idaho Attorney General and as deputy attorney general for the Commission. She was the commission's director of Policy and External Affairs and chair of the NARUC Staff Subcommittee on Telecommunications. A fourth‐generation Idahoan, Commissioner Smith has two sons. Annual Report 2008 P a g e | 4 IDAHO PUBLIC UTILITIES COMMISSION, 1913‐2008 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 Feb. 19, 2007 Paul Kjellander Feb. 15, 1999 Oct. 19, 2007 Mack Redford Feb. 19, 2007 Now serving Jim Kempton Oct. 22, 2007 Now serving Annual Report 2008 P a g e | 5 Financial Summary FISCAL YEARS 2004 ‐ 2008 Description FY2004 FY2005 FY2006 FY2007 FY2008 Personnel Costs $3,481,404 $3,561,082 $3,637,402 $3,467,401 $3,898,109 Travel $157,869 $154,345 $144,840 $146,491 $181,275 Consultants $25,197 $590 $40,518 $13,949 $16,041 Subscriptions $19,804 $21,574 $21,722 $28,321 $27.036 Emp. Training $30,447 $35,553 $34,424 $28,827 $33,190 Postage $11,265 $10,798 $8,408 $8,027 $7,174 Telephone $29,009 $32,517 $31,497 $28,007 $27,335 Office Supplies $15,063 $17,309 $14,709 $12,824 $17,697 Office Rent $226,441 $226,357 $115,468 $355,643 $236,497 Maintenance $9,666 $17,724 $8,652 $14,223 $15,817 Insurance $4,930 $1,407 $1,487 $2,702 $5,976 Office Equip. $0.00 $0.00 $0.00 $8,690 $5,279 Computer Equip. $0.00 $38,049 $22,874 $26,809 $15,934 Comm.’s Equip. $0.00 $0.00 $3,973 $0.00 $0.00 Other Equip. $0.00 $0.00 $20,082 $0.00 $0.00 Other Expenses $99,264 $114,470 $108,604 $113,671 $122,130 ================================================================== Total Expenditures $4,110,359 $4,231,955 $4,214,660 $4,255,596 $4,609,484 Appropriations $4,581,800 $4,612,300 $4,754,600 $4,545,300 $4,944,400 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Unexpended Balance $471,441 $380,345 $539,940 $289,704 $334,916 Annual Report 2008 P a g e | 6 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. 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 Tell them no! One of the most frequent questions we get after a utility files a rate increase application is, “Why can’t you just tell them no?” For much of the last 90 years, public utility regulation has been based on the theory of a regulatory compact between utilities and regulators: In return for an exclusive franchise (territory) granted by regulators, utilities agree to serve all those requesting service; and in return for agreeing to invest capital in plant and facilities, utilities are given a reasonable opportunity to earn a fair return on that capital. In setting rates, the commission must consider the needs of both the utility and its customers. The commission serves the public interest, not the popular will. It is not in customers’ best interest, nor is it in the interest of the State of Idaho, to have utilities that do not have the generation, transmission and distribution infrastructure to provide safe, adequate and reliable electrical, natural gas and water service to private residences, farms and to places of business. This is a critical, even life‐saving, service for Idaho’s citizens and essential to the state’s economic development and prosperity. Unlike unregulated businesses, utilities cannot cut back on service as costs go up. As demand for electricity, natural gas and water grows, utilities must meet that demand. In Idaho recently, and across the nation, a continued increase in demand as well as a number of other factors have contributed to rate increases on a scale that we have not witnessed before. It is not unusual now for Idaho’s three major investor‐owned electric utilities to file annual rate increase requests. In light of these continued requests for rate increases, the Commission walks a fine line in balancing the needs of utilities to serve customers and customers’ ability to pay. When a rate case is filed, our staff of auditors, engineers and attorneys will take up to six months to scrupulously examine the request. If we find the added expense incurred by utilities was prudently incurred and needed to serve customers, we have no choice but to allow the utility to recover that expense. However we can, and often do, deny the utilities’ recovery of expenses if we are confident we have the legal justification to do so. All Commission decisions can be appealed to the state Supreme Court. Customers must be ensured of paying a reasonable rate and utilities must be allowed to recover their legitimate costs of serving their customers and earn a fair rate of return. Annual Report 2008 P a g e | 7 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 and rules 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. 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. Annual Report 2008 P a g e | 8 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, public agencies and organizations. (Contact Lou Ann Westerfield, 334‐0323, and Wayne Hart, 334‐0354, policy analysts.) 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. (Contact Jean Jewell, commission secretary, at 334‐0338.) 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. (Contact Ron Law, executive administrator, at 334‐0331.) 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. (Contact Gene Fadness, public information officer, at 334‐0339.) Annual Report 2008 P a g e | 9 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. (Contact Don Howell, legal division director, at 334‐0312.) Utilities Division The Utilities Division, responsible for technical and policy analysis of utility matters before the commission, is divided into three sections. (Contact Randy Lobb, utilities division administrator, at 334‐0350.) 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. (Contact Terri Carlock, accounting section supervisor, at 334‐0356.) The Engineering Section, which includes seven 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. (Contact Dave Schunke, engineering section supervisor, at 334‐0355.) The Telecommunications Section includes three analysts who handle issues involving telecommunications. (Contact Joe Cusick, section supervisor, at 334‐0333.) 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. (Contact Beverly Barker, administrator for the Consumer Assistance section, at 334‐0302.) 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 Annual Report 2008 P a g e | 10 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. 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. (Contact Ron Law, rail section supervisor, at 334‐ 0331.) 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. (Contact Ron Law, pipeline safety program supervisor, at 334‐ 0331.)