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HomeMy WebLinkAboutSection I 2022 Annual Report.pdf ANNUAL REPORT 2022 Suite 201-A Boise, ID 83714 PO Box 83720-0074 208.334.0300 www.puc.idaho.gov Idaho Public Utilities Commission Page 1 Table of Contents COMMISSIONERS ................................................................................... 4 FINANCIAL SUMMARY FUND 0229* ............................................................. 7 Fiscal Years 2018 – 2022 ......................................................................... 7 COMMISSION STRUCTURE AND OPERATIONS .................................................. 8 Administration ................................................................................... 10 Legal .............................................................................................. 11 Utilities Division ................................................................................. 11 Railroad and Pipeline Safety Section ......................................................... 12 WHY CAN’T YOU JUST TELL THEM NO? ..................................................... 13 ELECTRIC ......................................................................................... 14 WATER…………………………………………………………………………………………………………………………….20 TELECOMMUNICATIONS………………………………………………………………………………………………….24 NATURAL GAS .................................................................................... 26 CONSUMER ASSISTANCE ........................................................................ 33 REGULATING IDAHO’S RAILROADS ........................................................... 34 REGULATING IDAHO’S PIPELINES ............................................................. 35 Idaho Public Utilities Commission Page 2 Idaho Public Utilities Commission Contact us: 208-334-0300 www.puc.idaho.gov Commission Secretary 1-208-334-0338 Public Information 1-208-334-0339 Utilities Division 1-208-344-0367 Legal Division 1-208-334-0324 Rail Section and Pipeline Safety 1-208-334-0338 Consumer Assistance Section 1-208-334-0369 Outside Boise, Toll-Free Consumer Assistance 1-800-432-0369 Voice: 1-800-377-3529 Text Telephone: 1-800-368-6185 TRS Information: 1-800-368-6185 This report and all the links inside can be accessed online from the Commission’s Website at www.puc.idaho.gov. Click on “File Room,” then “Reports” from the drop down, and then on “IPUC 2022 Annual Report.” Front cover photograph courtesy of Idaho Power Company. Hells Canyon Power Plant in Hells Canyon. Idaho Public Utilities Commission Page 3 Idaho Public Utilities Commission December 1, 2022 The Honorable Brad Little Governor of Idaho Statehouse Boise, ID 83720-0034 Dear Governor Little: It is our distinct pleasure to submit to you, in accordance with Idaho Code §61-214, the Idaho Public Utilities Commission’s 2022 Annual Report. This report is a detailed description of the most significant cases, decisions and other activities during 2022. The financial report on page seven is a summary of the Commission’s budget through the conclusion of Fiscal Year 2022, which ended June 30, 2022. It has been a privilege and honor serving the people of Idaho this past year. Sincerely, Eric Anderson President, Idaho Public Utilities Commission John Chatburn Commissioner John R. Hammond, Jr. Commissioner Idaho Public Utilities Commission Page 4 COMMISSIONERS Commissioner - President Eric Anderson was appointed to his current six-year term in January 2019 by Gov. Brad Little. It is his second term on the Commission, having been initially appointed in December 2015 by former Gov. C.L. “Butch” Otter. Commissioner Anderson serves on the National Association of Regulatory Utilities Commissioners (NARUC) Committee on Water as well as its Committee on International Relations. In November 2019 Commissioner Anderson was appointed Chair of NARUC’s Committee on Water. Before joining the Commission, Anderson served five terms in the Idaho Legislature, from 2004-2014, and was chairman of the House Ways and Means Committee. As a member of the Idaho House of Representatives, Anderson served on a number of committees, including Environment, Energy and Technology, Commerce and Human Resources, Resource and Conservation, Business, and State Affairs. He also chaired a legislative Interim Subcommittee on Renewable Energy. Anderson received a Bachelor of Art degree in political science and government from Eastern Washington University. A general contractor and real estate broker, Anderson also served as director and vice president of Sandpoint- based Northern Lights Inc., an electric cooperative. He has also served as a director of the Idaho Consumer-Owned Utilities Association, the National Rural Electric Cooperative Association and the Idaho Energy Resources Authority. He is a past member to the Pacific States Marine Fisheries Advisory Council and the Pacific Northwest Economic Region’s Executive Council. Idaho Public Utilities Commission Page 5 Commissioner John Chatburn was appointed to the Commission by Governor Brad Little on January 10, 2022. Commissioner Chatburn serves on the National Association of Regulatory Commissioners (NARUC) Committee on Electricity, NARUC’s Nuclear Energy Partnership, the Western Energy Imbalance Market-Body of State Regulators, Western Interconnection Regional Advisory Body, Co-Chair of the Committee on Regional Electric Power Cooperation, and the New Mexico State University Center for Public Utilities Advisory Council. Prior to being appointed to the Commission, Chatburn served as Administrator of the Idaho Governor’s Office of Energy and Mineral Resources (OEMR) beginning in September of 2014, He had served as Interim Administrator and Program Services Manager for OEMR from 2009 - 2014. During his career with the State of Idaho John has served as the Special Assistant for Energy under Governor Otter from 2007- 2009; Deputy Administrator, for the Idaho Department of Agriculture, in the Division of Animal Industries from 2002-2007; Special Assistant to the Director, Idaho State Department of Agriculture from 1999 – 2002; and Energy and Natural Resource Policy Advisor for Governor Phil Batt, 1995 – 1998. He is a graduate of Boise State University with a Bachelor of Arts degree in Political Science. Idaho Public Utilities Commission Page 6 Commissioner John R. Hammond, Jr. was appointed to his first term with the Idaho Public Utilities Commission by Governor Brad Little in January of 2022. Prior to being appointed to the Commission, John worked for the Idaho Office of the Attorney General as a Deputy Attorney General and later as the Commission’s lead Deputy Attorney General. During his career, John also worked in private practice and was a partner at Fisher Pusch LLP in Boise for eight years. John also served a law clerk to the Honorable Terry L. Myers, United States Bankruptcy Judge, United States Bankruptcy Court, District of Idaho. John earned his Bachelor of Science from the University of Idaho and his Juris Doctorate degree from the University of Idaho School of Law. Idaho Public Utilities Commission Page 7 Fiscal Years 2018 – 202 2 Financial Summary - Fund 0229 *This summary represents assessment funded expenses only. It does not include federal or other funds. Description FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Personnel Costs 3,962,400 3,990,800 3,576,800 3,356,200 3,618,600 Communication Costs 25,000 23,100 27,500 26,000 53,500 Total Expenditures Fund 0229-20 Appropriation Fund 0229-20 Encumbrances Unexpended Balance Idaho Public Utilities Commission Page 8 COMMISSION STRUCTURE AND OPERATIONS Under state law, the Idaho Public Utilities Commission (Commission or IPUC) 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. 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 Commission 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 – and . Decision meetings are typically held once a week, usually on Tuesday. Idaho Public Utilities Commission Page 9 Formal are held on a case-by-case basis, sometimes in the service area of the impacted utility. These hearings resemble judicial proceedings and are recorded and transcribed by a court reporter. There are and . At technical hearings, formal parties who have been granted “intervenor status” present testimony and evidence, subject to cross-examination by attorneys from the other parties, staff attorneys and the Commissioners. At public hearings, members of the public may testify before the Commission. In 2009, the Commission began conducting to save expense and allow customers to testify from the comfort of their own homes. Commissioners and other interested parties gather in the Boise hearing room and are telephonically connected to ratepayers who call in on a toll- free line to provide testimony or listen in. A court reporter is present to take testimony by telephone, which has the same legal weight as if the person testifying were present in the hearing room. Commissioners and attorneys may also direct questions to those testifying. The Commission also conducts regular to consider issues on an agenda prepared by the Commission Secretary and posted in advance of the meeting. These meetings are usually held Tuesdays 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. consist of the Commission’s review of decision memoranda prepared by Commission Staff (Staff). Minutes of the meetings are taken. Decisions reached at these meetings may be either final or preliminary, but subsequently become final when the Commission issues a written order signed by a majority of the Commission. Under the Idaho Open Meeting Law, Commissioners may also privately deliberate fully submitted matters. PUC hearing room PUC headquarters 11331 W. Chinden Blvd. Building 8, Suite 201-A, Boise, Idaho 83714. Idaho Public Utilities Commission Page 10 Commission Staff OUR MISSION - Determine fair, just and reasonable rates and utility practices for electric, gas, telephone and water consumers. - Ensure that delivery of utility services is safe, reliable and efficient. - Ensure safe operation of pipelines and rail carriers within the state. To help ensure its decisions are fair and workable, the Commission employs a Staff of about 55 people – engineers, utility analysts, attorneys, auditors, investigators, economists, secretaries and other support personnel. The Staff is organized in three divisions – administration, legal and utilities. Administration The Administrative Division is responsible for coordinating overall IPUC activities. The division includes the three Commissioners, three policy strategists, a Commission secretary, an executive director, and support personnel. The 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. The , 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 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 director also serves as a liaison between the Commission and other state agencies and the Legislature. The is responsible for public communication between the Commission, the general public and interfacing governmental offices. The responsibility includes news releases, responses to public inquiries, coordinating and facilitating Commission workshops and public hearings and the preparation and coordination of any IPUC report directed or recommended by the Idaho Legislature or Governor. Idaho Public Utilities Commission Page 11 Legal Five are assigned to the Commission from the Idaho 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 auditors, engineers, investigators, utility analysts 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. The Utilities Division, responsible for technical and policy analysis of utility matters before the Commission, is divided into four sections. 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. The of six auditors and one program manager 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 of two engineers, two utility analysts, and one program manager reviews the physical operations of utilities. The Staff of engineers and analysts develops computer models of utility operations and compares alternative costs to repair, replace and acquire facilities to serve utility customers. The group establishes the price of acquiring cogeneration and renewable generation facilities and identifies the cost of serving various types of customers. They evaluate the adequacy of utility services and frequently help resolve customer complaints. The of four utility analysts and one program manager determines the cost effectiveness of all Demand Side Management (DSM) programs including energy efficiency and demand response. They identify potential for new DSM programs and track the impact on utility revenues. They review utility forecasts of energy, water and natural gas usage with focus on residential self-generation and rate design. Idaho Public Utilities Commission Page 12 The oversees tariff and price list filings, area code oversight, Universal Service, Lifeline and Telephone Relay Service. They assist and advise the Commission on technical matters that include advanced services, 911 and other matters as requested. The includes four division investigators and one program manager 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. The oversees the safe operations of railroads that move 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 specialists inspect railroad crossings and rail clearances for safety and maintenance deficiencies. Rail safety section helps investigate 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. The oversees the safe operation of the intrastate natural gas pipelines in Idaho. The Commission’s pipeline safety personnel verify compliance with state and federal regulations by performing on-site inspections of intrastate pipeline distribution, gathering and transmission systems. 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 are investigated and appropriate reports filed with the U.S. Department of Transportation in a timely manner. Idaho Public Utilities Commission Page 13 WHY CAN’T YOU JUST TELL THEM NO? One of the most frequently asked questions the PUC receives after a utility files a rate increase application is, Actually, we can, but not without evidence. For more than 100 years, public utility regulation has been based on this between utilities and regulators: Regulated utilities agree to invest in the generation, transmission and distribution necessary to adequately and reliably serve all the customers in their assigned territories. In return for that promise to serve, utilities are guaranteed recovery of their prudently incurred expense along with an opportunity to earn a reasonable rate of return. The rate of return allowed must be high enough to attract investors for the utility’s capital- intensive generation, transmission and distribution projects, but not so high as to be unreasonable for customers. In setting rates, the Commission must consider the needs of 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 be able to provide safe, adequate and reliable electrical, natural gas and water service. 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 increase. As demand for electricity, natural gas and water grows, utilities are statutorily required to 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 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 examine the request. During that period, other parties, often representing customer groups, will “intervene” in the case for the purpose of conducting discovery, presenting evidence and cross-examining the company and other parties to the case. The Commission staff, which operates independently of the Commission, will also file its own comments that result from its investigation of the company’s request. The three-member Commission will also conduct technical and public hearings. Once testimony from the company, Commission Staff and intervening parties is presented and testimony from hearings and written comments is taken, all of that information is included in the official record for the case. It is only from the evidence contained in this official record that the Commission can render a decision. If the utility has met its burden of proof in demonstrating that the additional expense it incurred was 1) to serve customers and 2) , the Commission must allow the utility to recover that expense. The Commission can -- and often does -- deny recovery of some or all the expense utilities seek to recover from customers if the Commission is confident it has the legal justification to do so. Utilities and parties to a rate case have the right to petition the Commission for reconsideration. Following reconsideration, utilities or customer groups can appeal the Commission’s decision to the Idaho Supreme Court. In the end, the Commission’s job is to ensure that customers are paying a reasonable rate and are receiving adequate and reliable service and that utilities are allowed to recover their prudently incurred expenses and earn a fair rate of return.