20030326DECISION MEMO.pdf

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DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:LISA NORDSTROM
TL~ EJ 0.3
()/
DATE:MARCH 6, 2003
RE:ATLANTA POWER INVESTIGATION
On September 11 , 2000, the Commission received a petition from residents of
Atlanta, Idaho, enumerating their concerns about the electric service being provided by Atlanta
Power Company (Atlanta Power; Company). Th~ petition requested "a formal investigation into
the reliability of electrical service for the Atlanta townsite.In an October 2000 Decision
Memorandum, Staff proposed to "audit the COJ;npany, compile outage information, identify
potential improvements and associated costs and survey customers concerning their desire to
improve service reliability and the amount they are willing to pay to do so." The Commission
approved Staff s recommendation that the customer complaints initially be processed on an
informal basis.
Staff worked with the Company and its customers during a two-year informal review
period that culminated in several improvements and the attached report detailing Staff s findings.
The financial analysis and customer survey upon which the report is based are also attached to
this memorandum.
SUMMARY OF STAFF'S INVESTIGATION
The investigation focused on three areas of concern: the Company s ability to
promptly repair the system when an outage occurs, a perceived lack of communication with
customers, and the need for a backup generator. During the two-year investigation, two of the
three identified areas of concern have been improved, to wit: a third person who lives in Atlanta
is now available to assist with system problems and a local telephone number has been
DECISION MEMORANDUM
established to keep customers informed of planned outages and progress on repairs when the
system is out of service. Staff recommends no formal Commission action in these areas.
Backup Generator
The Commission is no doubt aware that Atlanta Power Company is a backcountry
power system with a single source of generation. Because it is not interconnected with any other
electric supply system, the entire system is without power if the turbine or generator fails. When
rates were last established in 1993, the capital and operating costs of a backup generator were
included. Sometime later the fully depreciated backup generator quit working and has not been
repaired.
Atlanta Power s position is that the backup generator is old, inefficient, and not
economic to repair. Since it quit working, Atlanta Power rents a backup generator from Boise
(an all-day trip) when an outage will take multiple days to repair. Atlanta Power believes that if
the system can be repaired or parts ordered and received in a comparable amount of time, it is a
better use of the Company s time and money to work on repairing the system. This policy,
coupled with unplanned outages that are difficult to diagnose and replacement parts that are not
stocked in the Boise area, can leave Atlanta Power customers without power for a few days at a
time.
Atlanta Power has offered to provide an on-site backup generator if the costs can be
recovered from its customers. Atlanta Power has even provided cost estimates for backup
generation that were below those obtained by Commission Staff. However, the audit reveals that
revenues from current rates are not enough to reimburse the Company for the costs of having a
Company-owned on-site backup generator.
Staff recommends that Atlanta Power continue to bring in a leased generator when a
multi-day outage is identified rather than purchase a new one for several reasons. First, a survey
of the 65 Atlanta Power customers indicates that only one of the 50 responding customers is
willing to pay substantially higher rates to have Atlanta Power own an on-site backup generator.
Second, nearly a third of Atlanta Power customers have already invested in personal backup
generators. Moreover, a Company-owned backup generator cannot provide electricity to all
customers under all outage scenarios.
DECISION MEMORANDUM
Staff Audit
Using the Company s estimated 1999 capital structure, embedded cost of debt, and a
10% cost of equity, Staff calculated a 9.24% overall rate of return based upon the information
retained by the Company. In the context of a 1999 test year, Staff estimated that the Company is
over-earning by approximately $3 000 1 or 5.6%. The test year rate base does not include diesel
backup generators because they were determined to not be used and useful in previous reviews.
On June 4, 1993 , the Commission in Case No. ATL-93-1 directed the Company "
implement, and utilize proper utility accounting procedures and recordkeeping, including, but not
limited to, the preparation and retention of adequate source documentation." Order No. 24925.
Staff noted that the Company has not complied with this Order and still needs to improve its
recordkeeping. Because Atlanta Power last submitted an annual report for calendar year 1997
the Company is in violation of Idaho Code 9 61-405, which requires such reports to be submitted
before April 15 of each year. Staff recommends that all past-due annual reports be filed by June
2003.
The Company has also established a pattern of paying obligations in an untimely
fashion as noted in Section X, page 11 of Attachment A to the report. This practice incurs
additional interest charges and late fees that are not the responsibility of the ratepayers, increases
the Company s unpaid obligations, and diminishes Company cash. None of these late fees are
incorporated into the revenue requirement estimated in Staffs analysis.
October 2002, the Company paid off two loans that were in arrears.
In September and
On May 9, 2002, the Federal Energy Regulatory Commission (FERC) issued a 30-
year license for the Atlanta Power Station Hydroelectric Project. The Order issuing the license
placed a number of requirements on the licensee. However, to Staffs knowledge, the costs
associated with the licensing conditions to be borne by the Company are not currently known
and measurable. Finally, Staff intends to work with the Company to develop a plan to complete
reasonable maintenance items.
Staff Procedural Recommendations
Staff identified two alternate procedures, one of which the Commission may wish to
adopt, to bring closure to this investigation. First, the Commission may choose to develop an
1 For more information about revenues, expenses, and rate base, see the first two paragraphs of Section XI, page 12
of Attachment A to Staffs report.
DECISION MEMORANDUM
evidentiary record and take fonnal comment from Atlanta Power and its customers regarding the
backup generator issue. To the extent that some customers believe Atlanta Power is required to
provide backup generation at the current rate level, an open case would provide the opportunity
for customers to argue this matter before the Commission. A Commission Order that adopts
Staffs recommendations or requires purchase of a backup generator would also allow existing
and future Atlanta Power customers to take appropriate actions, if necessary, to ensure their
energy needs are met.
Staff also recommended a less formal alternative. Staff offered to send a letter to
current customers and the Company that explains the survey results, Staff s findings regarding
backup generation, and current status of preventive maintenance issues.Although this
alternative would advise existing customers what to expect concerning Company-owned backup
generation, some customers may not find a letter from Staff to be a satisfactory resolution.
ATLANTA POWER'S REPONSE
A copy of the draft report, including its attachments and schedules, was sent to
Company President Lynn Stevenson. Mr. Stevenson has reviewed the report and indicated that
he has no comments about the report to present to the Corilmission.
COMMISSION DECISION
Does the Commission wish to take action based on the results of Staffs informal
investigation of Atlanta Power? If so , does the Commission wish to:
I. Develop an evidentiary record by opening a case to take formal comment
from Atlanta Power and its customers on the backup generator issue priorto issuing an Order?
2. Direct Staff to send a letter to current customers and the Company that
explains the survey results, Staff s findings regarding backup generation
and current status of preventive maintenance issues? or
3. Pursue a different course of action altogether?
M:AtlantaPowerlnvestgtn _
DECISION MEMORANDUM
Idaho Public Utilities Commission
Staff Report on the
Informal Investigation Of Atlanta Power
Company Customers ' Petition
Prepared by
Keith Hessing and Patricia Harms
March 6, 2003
INTRODUCTION
On September 11 , 2000 the Commission received a petition from some residents of
Atlanta, Idaho, enumerating their concerns about the electric service being provided by Atlanta
Power Company (Atlanta Power; Company). The petition requested "a formal investigation into
the reliability of electrical service for the Atlanta townsite.
At its Decision Meeting on October 10 , 2000, the Commission approved Staffs
recommendation that the customer complaints initially be processed on an informal basis. In its
Decision Memorandum, Staff proposed to "audit the Company, compile outage information
identify potential improvements and associated costs and survey customers concerning their
desire to improve service reliability and the amount they are willing to pay to do so." At the
conclusion of the investigation, Staff s memo indicated Staff would "report its findings to the
Commission with recommendations for further action.
Staff has worked with the Company and its customers during this two-year informal
review period, resulting in several improvements. Staff now has recommendations for the
Commission s consideration.
BACKGROUND
Approximately 20 years ago the electric utility supplying power to the Atlanta townsite
ceased operation due to a fire in the powerhouse at its hydropower generating facility.
Approximately two years later a group of investors formed the current Atlanta Power Company.
The new Company acquired and used the then-standing poles and wires to deliver energy to
those who chose to be customers. Within a year the system was metered for the first time and a
powerhouse was constructed at the old dam a few miles below town on the Middle Fork of the
Boise River. Most of the used equipment in the powerhouse was surplus, including the turbine
and generator.
Over the ensuing years much has happened to Atlanta Power s system. Ancient poles
have rotted and been replaced or stubbed. Trees have fallen across the wires and caused the
replacement of broken poles and wires. Transformers manufactured at the beginning of the last
century have been replaced to address polychlorinated biphenyl (PCB) concerns. The dam failed
and was replaced. The hydropower generator failed and was replaced with a new, more efficient
model. A forest fire burned a portion of the distribution system, part of which was rebuilt.
ATLANTA STAFF REPORT MARCH 6 , 2003
These events of the last 20 years have caused a number of things to occur. There have
been many outages, some for lengthy periods of time. Many of the facilities necessary for the
generation and delivery of power to customers have been replaced and/or upgraded. Atlanta
Power Company has made substantial investment in the power supply system.
The customer petition leading to this investigation stated that Atlanta Power customers
pay the highest rates in the nation, a system average of approximately 37 cents per kWh. While
this could easily be true, Atlanta Power Company may also be the smallest stand-alone electric
utility in the nation in terms of number of customers served and total load. Unfortunately,
Atlanta Power Company cannot capture the economies of scale that larger utilities can. Atlanta
Power s system costs are spread over very few customers, thus resulting in high rates.
Atlanta Power Company is a backcountry power system with a single source of
generation. It is not interconnected with any other electric supply system. If the turbine or
generator go out, the entire system is without power. There is no other generator running that
will automatically pick up the load. If a tree limb blows across the wires causing a short and
then clears, there are no automatic reclosers to temporarily interrupt power and then restore it
when the fault has cleared. When this situation occurs in Atlanta, the problem normally shuts
down the entire system until it is visually checked and manually restarted.
There are currently three people who are authorized to work on the system. All three
have other jobs and only two live in Atlanta. The third person was recently added to assist as
needed. Each of the three has different levels of system repair knowledge and capabilities.
There have been times when it has taken 24 hours or more just to diagnose a system problem.
The number and length of outages can be, and have been, substantial for Atlanta Power
customers.
Over the years Atlanta Power s rates have included the capital and operating costs of a
backup generator. When rates were last established in 1993 , these costs were included.
Sometime later the generator quit working and has not been repaired. Atlanta Power s position
is that it is old, inefficient and not economic to repair. The non-functional backup generator is
now completely depreciated. Since it quit working, Atlanta Power rents a backup generator from
Boise when a problem is diagnosed that will take multiple days to repair. It takes a day to drive
to Boise, lease the generator, hook it to a truck, tow it to Atlanta and connect it to the Atlanta
system. Atlanta Power believes that if the system can be repaired or parts ordered and received
ATLANTA STAFF REPORT - 2 -MARCH 6, 2003
in a comparable amount oftime, it is a better use of the Company s time and money to work on
repairing the system. This policy, coupled with unplanned outages that are difficult to diagnose
and replacement parts that are not stocked in the Boise area, can leave Atlanta Power customers
without power for a few days at a time.
ST AFF REVIEW
As part of its review the Commission Staff audited Atlanta Power Company and mailed a
survey to Company customers.
Staff Audit
Staff s audit report and its related .schedules are included as Attachment A to this report.
Although written more than a year ago, the report has been updated with relevant information as
it came to Staff s attention. Staff estimates that after adjustments to test year 1999' s drafted
financial information and pro forma year 2000 adjustments, the Company is over-earning by
approximately $3 000 1 or 5.6%. The test year rate base does not include any diesel backup
generators because they were determined to not be used and useful in previous reviews. Using
the estimated 1999 capital structure of the Company, embedded cost of debt, and a 10% cost of
equity, Staff calculated an overall rate of return of 9.24%. This earnings determination is an
estimate because Staff drafted 1998 and 1999 annual report information. To date, the Company
has not filed annual reports for 1998, 1999 2000 and 2001.
Staff often relied upon management's representations while drafting rate base, revenue
and expense information. In other instances, documentation was obtained directly from the
organization with which the Company had a financial relationship. Information pertinent to the
Company s financial position may exist that Staff did not receive and which was therefore not
incorporated into this analysis.
The Company s records are in violation of Commission Orders and Rules as described in
Section V, pages 4 through 6 of Attachment A. On June 4, 1993 , the Commission in Case No.
ATL-93'1 directed the Company to "to implement, and utilize proper utility accounting
procedures and recordkeeping, including, but not limited to, the preparation and retention of
1 For more information about revenues, expenses, and rate base, see the first two paragraphs of Section XI, page 12
of the attached audit report in Attachment A.
ATLANTA STAFF REPORT - 3 -MARCH 6, 2003
adequate source documentation." Order No. 24925. Staff finds that the Company still needs to
improve its recordkeeping, especially in the preparation and retention of adequate source
documentation so as to facilitate subsequent retrieval. The necessary improvements include, but
are not limited to: preparing and maintaining Board of Directors' meeting minutes , performing a
periodic inventory of assets that includes preparation and maintenance of a list of capital assets
on at least an annual basis, issuing checks sequentially and entering payment information at the
time of issuance, performing bank statement reconciliations each month in a timely manner, and
obtaining and retaining documentation supporting each financial transaction. Because Atlanta
Power last submitted an annual report for calendar year 1997, the Company is in violation of
Idaho Code 9 61-405 , which requires such reports to be submitted before April 15 of each year.
The Company has also established a pattern of paying obligations in an untimely fashion
as noted in Section X, page 11 of Attachment A. This practice incurs additional interest charges
and late fees that are not the responsibility of the ratepayers and increases the Company s unpaid
obligations and/or diminishes Company cash. None of these late fees are incorporated into the
revenue requirement estimated in this analysis. In September and October 2002, the Company
paid off two loans that were in arrears.
On May 9 2002, the Federal Energy Regulatory Commission (FERC) issued a 30-year
license for the Atlanta Power Station Hydroelectric Project. The Order issuing the license placed
a number of requirements on the licensee. Staff does not believe that the additional proj ect costs
as estimated in the license will be fully borne by the Atlanta Power Company because certain
costs have been funded by the State of Idaho as discussed in Section VI, last paragraph on page 8
and first two paragraphs on page 9 of Attachment A. However, to Staffs knowledge, the costs
associated with the licensing conditions to be borne by the Company are not currently known
and measurable.
Customer Survey
On September 10 2002 , the Commission Staff mailed a questionnaire to all 65 Atlanta
Power Company customers. Fifty of the 65 responded, although not all respondents answered all
questions. A brief report on the survey results, including a copy of the questionnaire, is
Attachment B to this report. The questionnaire sought customer response on three issues
identified in the initial customer petition: 1) the need for an on-site Company-owned backup
ATLANTA STAFF REPORT - 4 -MARCH 6, 2003
generator, 2) the need for a third Atlanta Power individual to resolve problems when the other
two are not available, and 3) the need to improve communications between the Company and its
customers.
Survey results indicate a substantial split among Atlanta Power customers concerning the
need for a backup generator. One group of customers adamantly believes that they are entitled to
a Company-owned backup generator connected to the system that can quickly provide power
when a system problem occurs. This group is generally composed of the same customers who
signed the original petition. They argue that their rates include costs for a backup generator.
Other customers believe that they are fortunate to have the service they have and that they cannot
expect more reliable electric service in Idaho s central mountains. However, there is one area in
which virtually all customers agreed. Forty-nine of fifty survey respondents were not willing to
pay any substantial amount more than current rates to fund a Company-owned backup generator.
Certainly there are some who believe they are entitled to a Company-owned backup generator
with no rate increase. However, the results of the Staff audit indicate that if rates were
established today based on the Company s recent costs, a substantial rate increase would be
required to cover backup generator costs. Other survey results show that 15 of 50 customers
have their own backup generators. Another 8 of the 50 responding customers do not have
backup generators and do not see a need for Atlanta Power to have one, even if it could be
provided with no rate increase.
Staff recommends that the current Company policy regarding backup generation be
continued (i., Atlanta Power Company lease and bring in a backup generator when a multi-day
outage is identified). This recommendation is based on several factors. First, survey results
indicate that only one of the fifty responding customers is willing to pay substantially higher
rates to have Atlanta Power Own an on-site backup generator. Second, nearly a third of Atlanta
Power customers have already invested in personal backup generators. A third consideration is
that a Company-owned backup generator cannot provide electricity to all customers under all
outage scenarios. If the problem causing an outage is on the distribution system between the
backup generator and the customer, only customer-owned generator equipment located on the
customer s property can guarantee that electricity will be supplied to that customer.
Survey results also indicate that 24 of 45 respondents favor the Company having an
additional, third person to assist with system trouble-shooting and repair. Atlanta Power has
ATLANTA STAFF REPORT - 5 -MARCH 6, 2003
recently identified a third person that lives in Atlanta who can be called upon to assist with these
duties.
Survey results show 30 of 45 respondents would use a telephone-based voice messaging
system with a local Atlanta phone number designed to keep customers informed of system
repairs and planned outages. Atlanta Power believes this to be a cost-effective, useful service
and put the telephone in service during February 2003. The Atlanta phone number for this
se;-vice is [phone]. Mr. Stevenson and Staff have discussed the nature, timing and extent
of voice messages that would most benefit the Company s customers.
The survey invited other customer comments concerning Atlanta Power Company.
significant number of customers noted that preventative maintenance would go a long way
toward preventing unplanned outages and that Atlanta Power s rates are too high. A policy that
considers both sentiments would encourage preventive maintenance and thus reduce existing
utility outages, repair costs, and the need for future rate increases., The Commission Staff intends
to work with the Company on such a plan.
Other Comments
Atlanta Power Company, a regulated investor-owned electric utility, has a responsibility
to balance providing the best possible electric service with affordable rates. Based on the
information obtained by the audit, customer survey, and other communication with customers
and Atlanta Power Company, the Commission Staff believes that current rates and policies have
moved the Company close to this balance. Some customers have expressed a desire for service
quality improvements, but not if it would require a rate increase. There are still improvements
that can be made at little or no cost that need to be identified and implemented.
SUMMARY OF STAFF'S SUBSTANTIVE RECOMMENDATIONS
As previously stated, the two-year investigation period allowed for a substantial amount
of comhmnication between the Commission Staff, Atlanta Power Company and the Company
customers. Consequently, two of the three previously identified areas of concern have been
improved, to wit: a third person who lives in Atlanta is now available to assist with system
problems and a local telephone number has been established to keep customers informed of
ATLANTA STAFF REPORT - 6 -MARCH 6, 2003
planned outages and progress on repairs when the system is out of service. Staff recommends no
formal Commission action in these areas.
Atlanta Power has offered to provide an on-site backup generator if the costs can be
recovered from its customers. Atlanta Power has even provided cost estimates for backup
generation that were below those obtained by Commission Staff. However, the audit reveals that
revenues from current rates are not enough to reimburse the Company for the costs of having a
Company-owned on-site backup generator. The customer survey indicates that customers are
not willing to pay any substantial rate increase to cover the costs of a backup generator. For
these reasons Staff recommends that Atlanta Power continue to bring in a leased generator when
a multi-day out!ge is identified rather than purchase a new one.
The recordkeeping and past-due annual report issues discussed above are similar to the
financial issues identified in Case No. ATL-93-1. Staff recommends that all past-due annual
reports be filed by June 15 2003.
Finally, Staff intends to work with the Company to develop a plan to complete reasonable
maintenance items.
PROCEDURAL RECOMMENDATIONS
Upon receiving this report, the Commission may decide to develop an evidentiary record
by opening a case to take formal comment from Atlanta Power and its customers on the backup
generator issue. Staff believes that its substantive recommendations are somewhat unusual and
may be unexpected. To the extent that some customers believe Atlanta Power is required to
provide backup generation at the current rate level, an open case would provide the opportunity
for customers to argue this matter before the Commission. A Commission Order that adopts
Staff s recommendations or requires purchase of a backup generator would allow existing and
future customers of Atlanta Power to take appropriate actions if necessary to ensure their energy
needs are met.
The Commission may choose a second, less formal, alternative. If the Commission so
desired, Staff could send a letter to current customers and the Company that explains the survey
results, Staffs findings regarding backup generation, and current status of preventive
maintenance issues. This method would continue the informal nature of the investigation but
still allow existing customers to know what to expect concerning Company-owned backup
ATLANTA STAFF REPORT - 7 -MARCH 6, 2003
generation. However, some customers may not find a letter from Staff to be a satisfactory
resolution.
ATLANTA STAFF REPORT - 8 -MARCH 6, 2003
ATTACHMENT A
Idaho Public Utilities Commission
Staff Financial Analysis
Atlanta Power Company
Prepared by
Patricia Harms
Auditor
November 30 , 2001
PURPOSE OF REVIEW
Staff commenced an on-site analysis of Atlanta Power Company, Inc. (Atlanta
Power; Company) records at its office in Bliss, Idaho during November 2000 to identify
its revenues, expenses and rate base. At the same time, Staff made observations
regarding the Company s accounting records and operations. At an October 4 2000
decision meeting, the Commission authorized Staff to conduct an informal investigation
into the reliability of the Company s service in response to a petition from certain Atlanta
Power customers.
The following analysis was not performed in conjunction with any case that
currently exists or which might be proposed. If it had been, Staff would have required
additional documentation from the Company to support its financial transactions.
Further, additional issues might arise in a rate case based upon the particulars of such a
filing.
II. 'FINDINGS
Staff estimates that after adjustments and use of a 1999 test year, Atlanta Power is
over-earning by $3 218 or 5.6% (see Section XI and Schedule 1 of this report for more
information).
This earnings determination is an estimate because Staff drafted 1998 and 1999
annual report information in order to estimate the revenues, expenses and rate base of the
Company. Not only were these reports not filed with the Commission, neither financial
statements nor tax returns exist for those years. Staff often relied upon management's
representations while drafting rate base, revenue and expense information. In other
instances, documentation was obtained directly from the organization with which the
Company had a financial relationship.
Because Atlanta Power last submitted an annual report for calendar year 1997, the
Company is in violation of Idaho Code 9 61-405, which requires such reports to be
submitted before April 15 of each year.
The Company s records are in violation of Commission Orders and Rules as
described in Section V of this report. On June 4, 1993 , the Commission in Case No.
ATL-93-1 stated
, "
the greatest improvement is needed in the preparation and retention
ST AFF FINANCIAL ANALYSIS NOVEMBER 30 2001
of adequate source documentation." Staff finds that the Company still needs to improve
its recordkeepirig - especially in the preparation and retention of adequate source
documentation so as to facilitate subsequent retrieval.
The Company has also established a pattern of not paying obligations in a timely
fashion as noted in Section X of this report. This practice incurs additional interest
charges and late fees that are not the responsibility of the ratepayers, increases the
Company s unpaid obligations, and/or diminishes Company cash. One such obligation is
related to the Company s legal fees incurred when it applied for licensing of its facilities
by the Federal Energy Regulatory Commission (FERC). On May 23 2002 the Company
requested authority to execute a Promissory Note payable to its counsel in order to pay
past due amounts for legal services. According to the Company, this note r~presents a
discount on the outstanding legal bill by waiving the accrued interest on the past due
amounts. The Commission granted that authority on June 20 2002 in Case No. ATL-
02-1. Order No. 29059.
III:RECOMMENDATIONS
Company personnel should maintain adequate supporting documentation of
transactions and file them in a manner that allows for subsequent retrieval. The
necessary improvements in recordkeeping include, but are not limited to:
Preparing and maintaining Board of Directors ' meeting minutes;
Performing a periodic inventory of assets that includes preparation and
maintenance of a list of assets (including materials and supplies) on at least an
annual basis;
Issuing checks sequentially and entering payment information at the time of
issuance;
Performing bank statement reconciliations each month in a timely manner;
and
Obtaining and retaining documentation supporting each financial transaction.
These issues are similar to those identified in Case No. ATL-93-
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
Management should also bring the Company into compliance with Idaho Code
61-405 by submitting annual reports for calendar years 1998, 1999 2000 2001 and 2002
by June 15 2003.
IV.GENERAL INFORMATION
Atlanta Power Company is an Idaho Corporation. As of September 2001 the
Secretary of State (SOS) had administratively dissolved the corporate name because the
Company s annual report had not been filed with SOS by its due date. The corporate
name was reinstated with SOS on December 13, 2001 as it has been in the past. During
the timeframe in which the corporate name was dissolved, officers and shareholders of
the Company were personally liable for activities of the Company because no corporate
structure legally existed during that time.
In September 2002 the SOS once again administratively dissolved Atlanta
Power s corporate name "for failure to file the required annual report form by the date
due." After Staff notified the Company of this dissolution, the corporate name was
reinstated with SOS on September 13 2002 and the Company s corporate powers in
Idaho were restored.
The Company serves the community of Atlanta, Idaho. According to an October
, 2001 customer listing provided by Company personnel, the Company serves 63
customers in the following tariff categories:
(1)
(2)
(3)
(4)
20 permanent resident;
6 permanent commercial;
36 seasonal resident; and
1 seasonal commercial.
The Company s office is located in Bliss, Idaho in the same building as Snake
River Sand and Gravel Company, Inc. Please see the Federal Energy Regulatory
Commission (FERC) Licensing Section of this report (Section VI) for more information
about the Company s power facilities.
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
COMPLIANCE WITH PRIOR ORDERS REGARDING ANNUAL
REPORTS AND ACCOUNTING
Annual Reports
The Company has not submitted its 1998, 1999 2000 and 2001 annual reports to
the IPUC. In 1993 the Commission noted that
the Company s failure to file timely annual reports.. . and its failure to
comply with various Commission Orders in violation of Idaho (law have
prevented the Commission and Staff from effectively performing their
supervisory and regulatory oversight functions.
Order No. 24925 (Case No. ATL-93-1) quoting Order No. 24702 (Case No. ATL-
92-1).
In the above referenced Order the Commission ordered that the
. . .
Company has
until June 15, 1993 to submit its 1992 Annual Report. Reference Idaho Code 961-405.
The Company submitted the report on that date. However, the annual reports for 1993
1994, 1995 , 1996, and 1997 were not submitted until September 1998 after Staff
requested those reports during an audit of the Company s 1997 financial records. Staff
requested the 1998 and 1999 annual reports for this current investigation. However, the
reports were not provided and Company personnel did not indicate when they were going
to file the reports. Staff drafted 1998 and 1999 annual report information based upon the
information available from the Company in order to estimate the revenues, expenses and
rate base of the Company because no annual reports, financial statements nor tax returns
existed for those years.
Recordkeeping
Order No. 24925 from Case No. ATL-93-1 dated June 4, 1993 also stated that
the:
. . .
Company is further ordered and .directed to adopt, implement, and
utilize proper utility accounting procedures and recordkeeping, including,
but not limited to, the preparation and retention of adequate source
documentation.
The above referenced Order noted that "the greatest improvement is needed in the
preparation and retention of adequate source documentation." While testifying in Case
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
No. ATL-93-, Lynn Stevenson stated
, ".. .
once the books were sorted out in
accordance with utility standards, they could thereafter be maintained in a professional
manner.
The Company still needs to improve its recordkeeping - especially in the
preparation and retention of adequate source documentation. As noted previously, Staff i
drafted 1998 and 1999 annual report information in order to estimate the revenues
expenses and rate base of the Company because the Company had not filed those reports
and neither financial statements nor tax returns existed for those years. Staff often relied
upon management's representations while drafting rate base , revenue and expense
information. In other instances, documentation was obtained directly from the
organization with which the Company had a financial relationship.
Staff also recommends that the Company improve its controls over checks. Some
checks are removed from the Company checkbook without entering the amount or payee
of the check. Instead, the Company bookkeeper records some check information into the
Company s computer system once the checks are returned with the monthly bank
statements. At the beginning of this financial analysis, several months of bank statements
and returned checks were missing. 1 Moreover, Company personnel had not recorded
financial information related to some of the checks that processed in those months.
Staffs request, Company personnel obtained copies of the missing statements from the
bank. From those statements, Company personnel deduced the payee and probable
reason for payment. However, Staff recommends that the Company record all checks at
the same time that the check is written. An invoice, request for reimbursement or other
source documentation should also be maintained coincident with each payment from the
Company s bank account. In addition, Staffrecommends that the Company issue checks
sequentially. Staff observed gaps in the check numbers processed against the Company
bank account. Staff does not know whether these checks remain unissued, have been
issued but not cashed, are void, or have been lost or stolen.
Staff further recommends that reconciliations of Company bank statements be
performed each month in a timely manner. Due to its size, the Company has one
I During Staffs on-site visit, the Company President requested that the bank statements be delivered to the
Company s office address in Bliss. This should eliminate missing bank statements and returned checks.
STAFF FINANCIAL ANALYSIS NOVEMBER 30 , 2001
individual preparing the customer billings, posting the customer payments , making
deposits and performing bank statement reconciliations when sufficient information and
time is available. During Staffs on-site review, selected payments on accounts were
traced to the Company s deposit slip copies and bank statements. Fromthat review, it
appears that a September 1999 deposit of approximately $400 was not recorded in the
Company s bank account although the Company kept a copy of the deposit slip. The
Company bookkeeper indicated that the deposit was mailed to the bank but was unaware
that it was not deposited to the Company s account. The status of the deposit was not
resolved after further research by Atlanta Power s bookkeeper.
Staff also recommends Atlanta Power prepare and retain written minutes for each
meeting of the Company s Board of Directors. These minutes are essential for
documenting Board actions , such as the decision to increase Lynn Stevenson
management fee from $18 000 annually ($1 500 monthly) to $24 000 annually ($2 000
monthly). As noted in the earnings review of the 1997 test year, this management fee is
to provide for office space office personnel, computer time for billing, billing and
collection of monthly charges, office supplies and stamps for billing, power charges
telephone charges, vehicle operations and time and travel for the manager (Company
President). Based upon management's representations, this $6 000 annual fee increase
(34%) began in 1998 but there is no documentation of the Board's authorization.
Order No. 24925 from Case No. ATL-93-1 dated June 4, 1993 stated that the
Company .. . is further ordered and directed to prepare within 90 days an inventory of all
of its long-term assets, including serial numbers and material and supplies inventory,
together with an explanation of the evaluation method used." The Company has not
maintained its inventory. For example, as noted in the Rate Base and Related
Adjustments Section xn ofthis report, Company personnel did not know the
composition of the Company s materials and supplies when asked by Staff. Staff
recommends that on at least an annual basis the Company perform periodic inventories of
its physical assets and maintain records detailing the description and value of the assets
including the evaluation method used.
Information pertinent to the Company s financial position may exist that Staff did
not receive and which was therefore not incorporated into this analysis.
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
VI.FERC LICENSING
As noted in documents posted in FERC's information systems 2 Atlanta Power
filed a hydroelectric application for a preliminary permit pursuant to Federal Power Act
provisions (16 USC 791(a)-825(r)) in 1995. The application was for the existing Atlanta
Power Station facilities, located at the United States Forest Service (USFS) Kirby Dam
consisting of: (1) an intake structure and trash rack; (2) a steel flume; (3) a concrete head
box; (4) a steel penstock; (5) a powerhouse containing a single generating unit; (6)
transmission line; and (7) related facilities. Water to operate the project is diverted from
Kirby Dam, which is owned, operated and maintained by the USFS. The project
occupies land within the Boise National Forest, also administered by the USFS. The
project has operated since 1907 on the Middle Fork of the Boise River. The original dam
failed in the early 1990's and was rebuilt by the U.S. Bureau of Reclamation in 1992 to
address serious concerns about toxic sediment release (arsenic and mercury from mining
activity) into waterways.
In February 1999, Atlanta Power filed an application with FERC to license the
existing Atlanta Power Station Hydroelectric Project. On May 9 2002 FERC issued a
30-year license for the project. The 30-page Order issuing the license incorporates by
reference the 2002 Final Environmental Assessment (FEA) for Hydro Power License.
the 60-page FEA, the Office of Energy Projects staff recommended the project be
licensed as proposed with certain additional enhancement measures. The FEA also found
that licensing the project would not constitute a major federal action significantly
affecting the quality of the human environment.
The Order issuing the license placed a number of requirements on the licensee.
Because the project occupies land in the Boise National Forest, USFS has the authority to
impose mandatory conditions under the Federal Power Act. The USFS conditions in the
license are as follows:
(1)requirement to obtain a USFS Special-Use Authorization;
2 The information reviewed was obtained from FERC's Records and Information Management System
(RlMS), Commission Issuance Posting System (CIPS), and Federal Energy Regulatory Records
Information System (FERRIS).
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
(2)
(3)
provision for consultation with USFS of all final design plans before any
construction occurs on USFS land; and
extensive conditions regarding both upstream and downstream fish
passage.
The license also requires the applicant to flle plans3 with FERC for approval.
These plans include those for operation and maintenance, effectiveness evaluations, and
design drawings for fishways as required by the Department of Interior s Section 18
prescriptions. The license also reserves FERC's authority under the Federal Power Act to
require fishways for the project that may be prescribed by the United States Department
of Interior.
(1)
Other measures required by the license include but are not limited to:
(2)
(3)
development and implementation of a flow monitoring plan for the
purpose of operating the fishway and for determining compliance with
flow requirements;
providing a report to FERC summarizing the results of the Idaho
Department ofFish and Game s (IDFG's) monitoring of upstream fishway
passage and a revised plan of operations regarding the period of operation
and the range of flows provided to the fishway;
development of a construction mitigation plan for any project-related
construction that may occur in association with installation of the
downstream fish passage facilities as required by the Section 18
prescriptions; and
authority for the CC?mpany to grant permission (without prior FERC
approval) for the use and occupancy of proj ect lands for minor activities.
The FERC licensing order states "as licensed and including the Section 18
mandatory conditions, the project would produce an average of 1 314 megawatt-hours
annually at an annual cost of$53 400." In a conversation documented by FERC
personnel in February 2000, Mr. Stevenson estimated the costs of the Company as
(4)
$48 000. Thus licensing of the project appears to have added $5 400 in annual costs.
3 After FERC approval the plans become a condition of the license and the licensee is to implement the
plans including any changes required by FERc.
ST AFF FINANCIAL ANALYSIS NOVEMBER 30 2001
However, FERC personnel emphasized that the economic analysis presented was to
provide a general estimate of the potential power benefits and the costs ofthe project for
comparison with the cost of the most economical alternative source of power, which in
this case was diesel generation.
The project license conditions include many IDFG activities4 (such as fish screen
and fish ladder funding), ~o it is clear that not all these costs are intended to be borne by
Atlanta Power. When queried about the costs associated with these requirements and
which organization would incur them, FERC personnel noted that they "always figure it
from the standpoint that the applicant would have to pay if the Fish and Wildlife Agency
didn t." IDFG personnel indicated that the State ofIdaho incurred most of the costs
associated with the conditions contained within the FERC license. As a result, Staff does
not believe that the additional project costs estimated in the license will be fully borne by
the Atlanta Power Company. However, to our knowledge, the costs associated with the
licensing conditions to be borne by the Company are not currently known and
measurable.
On July 29 2002 Atlanta Power filed a motion for extension of time to file a
request for rehearing, a request for rehearing, and a motion for amendment to the license.
On August 16 2002 FERC issued a notice rejecting the request for rehearing because the
request did not reach FERC until after the statutory rehearing deadline had passed. In
that notice, FERC added "the licensee may not request an amendment ofthe license by
filing a motion, but rather must file an amendment application in accordance with our
rules for license amendments.
Idaho Rivers United filed a timely request for rehearing. In its nine-page order
issued August 27 2002, FERC concluded "that the licensing process complied with the
4 Atlanta Power and IDFG entered into an agreement governing construction and ownership of the fish
screen and monitoring of bull trout migration at the Kirby Dam, on August 31 , 2001. IDFG agreed it
would be responsible for most aspects of the fish screen including its funding, construction, ownership,
maintenance, and repair while Atlanta Power agreed to install and remove the fish screen annually and
perform minor day-to-day maintenance. The parties also entered into an agreement dated July 31 , 1998
regarding ownership and operation of a newly installed fish ladder at Kirby Dam As part of the fish ladder
agreement, IDFG agreed to fund, construct, own, operate, maintain and repair the fish ladder at its sole
expense while Atlanta Power agreed to perform minor day-to-day maintenance of the fish ladder. IDFG
also agreed to maintain any necessary insurance for the fish screen and the fish ladder. IDFG further
agreed to conduct a monitoring program to evaluate upsh"eam fish passage at Kirby Dam.
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
National Environmental Policy Act, Endangered Species Act, and Columbia River Basin
Fish and Wildlife Program. We therefore deny rehearing.
FERC, Office of Energy Projects, Division of Dam Safety and Inspections
Portland Regional Office personnel filed an Operation Report dated September 2002 on
the licensed project. This report spanned the period April 21 , 1999 through August 20
2002. The report noted certain license environmental requirements for which it was
... unclear how FERC can insure compliance..." However, according to the report
. . .
the licensee appears to have been in compliance with all compliance requirements in
the license during the reporting period.
VII.CONTRACT LABOR
An individual in Atlanta is on call to do maintenance and repair work. He is paid
$500 per month, from which no payroll taxes are taken nor workers compensation
payments made on his income. As noted in the earnings review of the 1997 test year, this
arrangement creates a potential unrecorded liability unless the Company can show
that independent contractor requirements are met. Another person was recently added to
assist as needed. The payment arrangement with this individual is not currently known
and may be subject to the same contract labor concerns.
VIII. ELECTRICITY BARTERING WITH CERTAIN CUSTOMERS
Electricity is provided to certain Atlanta Power Company customers as
consideration for a variety of goods and/or services. If a customer provides labor or fuel
for example, a credit memo is made on their account to compensate them. One such
credit memo was for more than $3 500.
The effect of these types of transactions on the Company s revenue requirement
was discussed in Order No. 24925 in 1993. Because surplus hydro capacity was used to
meet the power requirements of those provided electricity in these types of transactions
valuation ofthat electricity was unnecessary. Therefore, no adjustments have been made
to the Company s revenue requirement as estimated by Staff for these types of
transactions.
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
IX.BAD DEBTS
As discussed with Company personnel, Atlanta Power has very few bad debts; the
Company almost never writes off an account receivable. As a result, no provision in
Staffs estimate of the Company s revenue requirement has been made for uncollectible
accounts receivables.
While Company personnel indicate that customers generally eventually pay their
accounts, they note that there are some slow paying customers.
LATE FEES
The Company incurred substantial late fees associated with the FERC licensing
process. As noted in Section XII discussing capitalization of these legal fees
approximately $26 000 in late fees was billed through January 2001. Additionally, the
Company also consistently incurred late fees and interest associated with its Department
of Water Resources energy loan and property taxes. The Company also paid various
other obligations in an untimely fashion that incurred late fees. None ofthese late fees
are considered an obligation of the customer and as such, are not incorporated into the
revenue requirement estimated in this report. The $26 000 in late fees and the unpaid
bills associated with them represent a significant obligation because the Company
revenues for an entire year after adjustment are estimated as approximately $60 000.
Subsequent to this analysis, the Company requested authority on May 23 2002 to
execute a Promissory Note payable to its legal counsel to pay past due amounts for legal
services. According to the Company, this note represents a discount on the outstanding
legal bill by waiving the accrued interest on the past due amounts. The Commission
granted that authority in Case No. ATL-02-1 as conditioned in Order No. 29059.
In September and October of 2002 the Company paid off two Department of
Water Resources loans, both of which were overdue when compared to the final payment
dates originally scheduled for the loans.
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
XI.EARNINGS SUMMARY
As noted previously, Staff drafted 1998 and 1999 annual report information in
order to estimate the Company s revenues, expenses and rate base because the Company
had not filed those reports and neither financial statements nor tax returns existed for
those years. Staff often relied upon management's representations while drafting rate
base, revenue and expense information. In other instances, documentation was obtained
directly from the organization with which the Company had a financial relationship.
(Please see the previous discussion in this report regarding the Company s recordkeeping
in Section V).
Staff estimates that after adjustments to test year 1999's drafted financial
information and pro forma adjustments, the Company is over-earning by $3 218 (see
Schedule 1). Staff estimated revenues adjusted for out-of-period revenue as $60 363.
Expenses adjusted for non-recurring and duplicative expenses were estimated as $44 115
(see Schedule 3). Staff estimated rate base adjusted for unsupported inventory and pro
forma adjustments as $132 091 (see Schedule 2). Using the estimated 1999 capital
structure of the Company, embedded cost of debt, and a 10% cost of equity, Staff
calculated an overall rate of return of 9.24% (see Schedule 4). The rate ofreturn
produced a required return on long-term debt of $9 246 and a return on equity grossed up
for taxes of $3 784. This results in an overall return of $13 030 (see Schedule 1).
Capital Structure and Return on Equity
Staff has used the estimated adjusted 1999 capital structure of Atlanta Power as
follows:
C~pital Component Dollar Amount Capital Structure
Long Term Debt $67 455 77.62%
Stockholders ' Equity $19,451 22.38%
Staff has used a return on equity of 10%. Staff s recommended capital structure
and return is reflected as follows:
ST AFF FINANCIAL ANALYSIS NOVEMBER 30 , 2001
Capital Weighted
Structure Embedded Cost Cost
Debt 77.62%Various - See Schedule 4 00%
Equity 22.38%10.0000%24%
Rate of Return 100.00%24%
According to Exhibit No. 101 from Case No. ATL-93-, stockholders ' return
on rate base was 5.145% while the interest return on rate base was 3.499%.
XII.RATE BASE AND RELATED ADJUSTMENTS
Staff used an average rate base to determine the Company s revenue requirement.
This average rate base was calculated from draft annual report amounts prepared by Staff
based upon the information available. The largest component of rate base is utility plant
in service. Staff began calculating plant in service from that reported in the Company
1997 annual report and reducing that amount for adjustments5 proposed in previo~s
audits and reviews. As a result, test year 1999 rate base does not include any diesel
backup generators because they were determined to not be used and useful in previous
reviews. Test year 1999's rate base also includes current legal fees incurred through
2000 for FERC licensing (see discussion that follows regarding licensing). Rate base was
estimated as $132 091 (see Schedule 2) and the following items were pro formed into test
year 1999 rate base.
FERC License Capitalization, Amortization and Adjustment A
The amount in rate base related to Atlanta Power Company s FERC licensing
includes legal fees (excluding late charges), photocopying charges and amortization of
those amounts to recognize that the license is of limited duration.
The law firm of Givens Pursley LLP has been working on Atlanta Power
licensing requirement from FERC since early 1995. As ofJanuary 31 2001 , the total
amount billed was approximately $62 000. Of that amount, late charges comprise
5 Items were identified in A TL-93-1 that were inappropriately capitalized while other items were
determined not used and useful (generators) in Staffs audit oftest year 1997.
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
approximately $26 000 that had been added to the regular billings. Staff considered total
legal fee billings excluding late charges - just over $36 000 for capitalization based on
billings obtained from the attorneys' offices.
As of January 31 2001 Givens Pursley had $56 368 in billings to Atlanta Power
Company that remained unpaid and had not been recorded on the Atlanta Power
Company books. Subsequent to this analysis, on May 23, 2002 the Company requested
authority to execute a Promissory Note payable to its counsel in order to pay past due
amounts for legal services. The Commission granted that authority in Case No. ATL-
02-1 as conditioned in Order No. 29059 dated June 20 2002.
Another attorney, Laurel Heacock, also worked on the licensing project. The
IPUC audit oftest year 1997 stated that $ 11 ,422 in billings from Ms. Heacock were paid
and posted to Atlanta Power Company s books. This amount did not include any of the
Givens Pursley billings discussed above.
Additionally, Atlanta Power Company s 1998 and 1999 bank statements contain
over $3 500 in payments to Kinko s Copies that Lynn Stevenson identified as payments
for copying the FERC license applications. No invoices were available to support these
payments, nor was a returned check available to verify that one check for approximately
200 was written to Kinko ' s Copies. Based upon the number of copies distributed and
observation of both a draft and final license application, these costs were capitalized and
amortized over the same period as the FERC legal fees. In a rate case, however, these
dollar amounts would require written verification such as invoices to confirm the costs
were related to the FERC license applications.
During the IPUC audit of test year 1997, Givens Pursley projected that the FERC
license would be issued about July 1999 at an additional cost of approximately $5 000. If
those projections had materialized, the FERC relicensing would have cost app~oximately
$39 000 plus any late charges as reported in that audit. Instead, the total capitalized cost
for FERC licensing (excluding late fees) at the end of2000 was approximately $51 000
($11 422 from 1997, $36 000 in Givens Pursley fees, and more than $3 500 in
photocopying costs).
This report uses an average rate base to determine a revenue requirement because
an average rate base provides a better matching ofrate base and revenues generated. The
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
1999 average ofFERC licensing costs incurred, as of the beginning and end of the year is
$45 187 ($41 270 plus $49 104 divided by 2). Adjustment A to rate base increases rate
base by the $1 868 'in licensing legal fees (excluding late charges) incurred in 2000.
maintain t~e average rate base, these legal fees are halved, resulting in an adjustment of
$934 ($1 86812).
The capitalized FERC licensing costs in this report have been amortized to reflect
the finite life of the license. Lynn Stevenson estimated the useful life of the license as 35
years. Once the license has been approved, the actual amortization of the license costs
should reflect the duration stated on the license. For the purposes of this report, the
useful life of the license was considered to begin in the year 2000. Therefore, costs
incurred in the year 2000 were amortized over a useful life of 35 years. Costs incurred in
years prior to 2000 were amortized as follows: 1999 costs over 36 years, 1998 costs over
37 years, 1997 costs over 38 years, 1996 costs over 39 years and 1995 costs over 40
years. The total amortization at the end of calendar year 2000 was approximately $6 000.
On May 9 2002 FERC wrote an Order issuing a license to the Atlanta Power
Station Hydroelectric Project. The license term is 30 years, effective the first day of the
month the license is issued. The actual license term is shorter than that estimated above
and results in an amortization rate that is less than one-half a percentage point higher than
the rate used in Staff's amortization calculations. Due to the immateriality of the
difference, Staffs amortization adjustment has not been recalculated or revised for this
report.
Similar to the capitalized licensing costs, the amortization related to those costs is
also averaged to maintain an average rate base for the purpose of determining a revenue
requirement. However, no adjustment was made to decrease rate base by half the
amortization that would have been related to legal fees incurred in 2000 due to its
immateriality.
Materials and Supplies and Adjustment B
Similar to the results found in Case No. ATL-93-1 and IPUC Staffs audit
test year 1997, $7 000 of this account balance was not supported by a current inventory
or invoices. Inventory was reported in Atlanta Power Company s last three annual
reports (1995 1996 and 1997) at the same $7 000 level. When asked about the
ST AFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
composition of this inventory, Company personnel indicated they did not have that
information and would need to travel to Atlanta to review the items there before
answering this question. Due to the lack of adequate supporting documentation verifying
this amount of inventory, Adjustment B removes $7 000 from rate base. This amount
was also removed from rate base in Case No. ATL-93-1 for similar reasons.
The amount of materials and supplies remaining in rate base were invoiced items
placed in that category based upon Staffs discussions with Lynn Stevenson. Notably,
the largest amount ($997.50 of$1 238.50 or 81 %) was related to an unreadable invoice
that was faxed to the Company from the payee when Staff requested documentation of
t~e payment. In a rate case this dollar amount would require written verification to
confirm the costs were related to Atlanta Power. As with other financial transactions
Company personnel should maintain ade~uate supporting documentation of those
transactions filed in a manner that allows for subsequent retrieval.
No inventory of materials and supplies was physically observed byStaff for this
financial analysis. Staff recommends physical observation of materials and supplies be
performed by Staff in the next review.
Working Capital
Working capital is the amount of capital necessary to run the business between
the time expenses are disbursed to provide the services paid for by consumers and when
revenues are received. Cash working capital is the average amount of capital supplied by
investors over and above the investment in plant and other elements of the rate base
required to bridge the gap between the time expenditures are made to provide service and
the time collections are received for these services. Historically the Commission has
used the balance sheet method for determining cash working capital. The balance sheet
method of cash working capital evaluates the need for capital by identifying whether
investors (shareholders) are providing the working capital or whether it is being provided
from some other source. Using the balance sheet method, the working capital schedule
for Atlanta Power Company reflects a negative cash working capital (see Schedule 5).
This indicates that shareholders were not the source ofthe working capital.
Historically the Commission has not recognized negative working capital, and
finds that the cash working capital allowance in those cases should be zero. As a result
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
no cash working capital provision will be included in Atlanta Power Company s rate
base.
Significant Ongoing Changes to Plant in the Year 2000 and Adjustments C,
D and E
In 2000, the Company replaced the turbine generator and improved its
powerhouse. These financial commitments will provide benefits to ratepayers in the
future and require a return in the coming years. As a result, the financial effect of these
improvements is pro formed into the Company s revenue requirement as determined by
Staff.
Adjustment C increased plant for the powerhouse improvements and a new
tutbine generator. The amounts for the improvements and turbine generator were
identified as follows: $3 720 for the turbine generator per an April 7, 2000 invoice; $975
for transformers per an April 21 , 2000 invoice; $303 for meters per a May 10, 2000
invoice; and $113 for a belt pulley per the 2000 bank statements and Company
personnel's representations. To maintain an average rate base, Adjustment C is for half
the increase in plant noted previously ($5 111 divided by 2). This adjustment also
reduced plant for a half-year of depreciation associated with the turbine generator and
powerhouse improvements. The meters, transformers and belt pulley were depreciated
over the useful life (10 years) of similar items (generator improvements and electric
controls) identified in the Company s 1997 depreciation schedule. The turbine generator
was depreciated over the same useful life Lynn Stevenson provided for the FERC license
(35 years).
Adjustment D capitalizes the reasonable lodging and meal costs from those
identified by Lynn Stevenson as associated with installation of the turbine generator and
powerhouse controls (see Adjustment C). Stevenson noted that five individuals
(including him) removed the old turbine generator and electrical components and
installed the new items necessary to operate the new turbine generator. Of those fi~e
individuals, two have residences in Atlanta. Therefore, meals and lodging for three
individuals was capitalized as follows. Based upon an invoice for meals and lodging,
Staff capitalized four nights of lodging that was billed for a total of $485. The same
invoice billed $476.30 in meals and drinks for a five-day period. The invoice provides no
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
further detail of those meals and drinks. The state government reimbursement rate for
meals in 2000 was $20 per day. Using that $20 per day rate to provide meals for five
days is $300 for the three individuals without Atlanta residences. This amount was also
capitalized. Again, the adjustment proformed into rate base is for half the amount to
maintain an average rate base ($485 plus $300 divided by 2). The difference between the
amount billed for food and drinks ($476.30) and that capitalized ($300) for meals is not
considered a responsibility of the ratepayers and is thus a below-the-line expense not paid
by regulated customers.
Wages are another likely expense associated with installation of the turbine
generator and the powerhouse improvements. No wages have been estimated or
pro formed into rate base. A review of the check register for the year 2000, which was
prepared by the Company, does not indicate any payllents for this work. However
performing this type of work is within the scope ofLynn Stevenson s management fee.
There is no expectation that Mr. Stevenson would receive additional compensation for
this work. Based upon the 2000 check register, the Company s contract laborer (see
Section VII of this report) was paid less than the $6 000 annualized amount of his $500
per month retainer. Although he was not paid monies in addition to his monthly fee for
this work, this does not mean that he did not earn additional pay for the powerhouse
improvements and turbine generator work. According to Mr. Stevenson, three other
individuals were part of the team that performed this work. At least one individual was
given a credit on their account with the Company. As discussed under "Free Electricity
in this report, this credit on account was not reflected in Staffs revenue requirement
determination. This is consistent with Order No. 24925 in Case No. ATL-93-
Another individual working on the improvements was specifically not paid by the
Company. Lynn Stevenson noted that he believed the ~ork performed by this individual
subsequently caused problems. As a result, Stevenson said he denied the payment
request and informed the worker of the subsequent problems caused by that work which
could be grounds for litigation. There is no evidence of payment to the fifth individual
that was identified as working on the improvements.
Adjustment E removes the estimated book value of the turbine generator replaced.
According to the Company s 1997 depreciation schedule, the powerhouse electric
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
controls have been fully depreciated and therefore, no book value remains to be removed
from rate base. Other components in rate base may need to be removed but are not
determinable from the Company s 1997 depreciation schedule, which does not
specifically identify belt pulleys and transformers, for example. However, it is unlikely
that there would be any book value remaining on those items.
Staff did not pro form non-recurring expenses of2000 into its determination of the
Company s revenue requirement. For example, a month's generator rental ($3 020) for
emergency purposes was not pro formed into Staffs determination of the Company
revenue requirement because it was not considered an ongoing cost on a going forward
basis. No generator rental expense was incurred during the test year. A provision could
be made for generator rental, but since this analysis was initiated as part of an informal
investigation considering a backup generator purchase, the Company s revenue
requirement was calculated without such a provision. The Company President estimated
that the Company would average one-week ($755) of backup generator usage over a ten-
year period. However, he suggested a two-week ($1 510) provision for generator rental.
Even if either provision was included in Staffs determination ofthe Company s revenue
requirement, the Company would still be over-earning.
XIII. OPERATING EXPENSES
Staff determined the Company s revenue requirement using pre-tax operating
expenses from Staff-calculated draft annual report amounts that were based upon the
information available regarding the Company s activities. After adjustments, operating
expenses before taxes were calculated as $44 115 (see Schedule 3). Of that amount, 95%
is comprised of the management fee6 ($2 000 per month or $24 000), the annualized
contract labor cost ($500 per month or $6 000), and depreciation on plant and
amortization of the FERC license ($11 700). Operating expenses were adjusted for the
following reasons.
6 As noted in the earnings review of the 1997 test year, this fee is to provide for office space, office
personnel, computer time for billing, billing and collection of monthly charges, office supplies and stamps
for billing, power charges, telephone charges, vehicle operations and time and travel for the manager
(Company President).
ST AFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
Accounting Invoice and Adjustments F, G and H
During Staff s on-site review of the 1999 payable file provided by Company
personnel, Staff found an unopened envelope containing a billing from the Company
accountants. The amount of the bill ($556) was accrued by Staff for the draft annual
report amounts noted previously. Of that amount, $397 was associated with computer
consulting. Based upon Staffs understanding of the management fee s purpose, the
charge for this consulting should be included in the management fee. As a result
Adjustment F removed that amount from operating expenses. Adjustment H reduces
Lynn Stevenson s loan amount on Schedule 4 by $397 because the management fees paid
to Stevenson should have covered it. To calculate Lynn Stevenson s loan balance, the
loan was increased monthly for the management fees previously described and then
reduced by payments to Stevenson and those expenses that were described as part of the
management fee - postage, computer items, power bills, and so forth.
Adjustment G removes $141 in fees billed by the Company s accountant for
meeting with IPUC Staff about the 1997 test year audit. This fee is not considered an
expense that occurs annually on a going forward basis. Therefore, that amount has been
removed from operating expenses.
The amount from the accountant's billing remaining in operating expenses ($18)
related to filing extensions of 1998 state and federal income tax reports. During a rate
case, it could be argued that ratepayers should not be responsible for the Company
choice to file income tax extensions rather than filing on time. Due to the sp1all amount
however, this $18 remains in operating expenses for the purpose of this report.
XlV. CAPITAL STRUCTURE AND RATE OF RETURN
Staffs determination of the Company s revenue requirement used the capital
structure from draft annual report amounts that were calculated by Staff based upon the
information available regarding the Company s activities. Staff did not confirm the Ray
and Zimmerman loan balances or stockholders' equity. Instead , those were calculated
based upon the balances from Staffs audit ofthe Company s 1997 test year and activity
observed through December 2000.
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
The capital structure, more specifically the amount ofLynn Stevenson s loan, was
adjusted as described below. Using the adjusted capital structure (see Schedule 4) and a
10% return on stockholder s equity, the total return is 9.24%. The return on
stockholder s equity is the same as the return in Staffs audit of the Company s 1997 test
year. The total return in this review is slightly higher than the previously mentioned audit
in which the return was calculated as 9.16%.
Adjustments H and I to Lynn Stevenson s Loan
The Company s bank statement for January 2000 included a $10 000 payment to
Lynn Stev~nson. This payment was considered a reduction ofMr. Stevenson s loan
because his $24 000 annual management fee was paid by check, bank transfers and A TM
withdrawals in 1998 and 1999. Adjustment I on Schedule 4 reduced the balance ofLynn
Stevenson s loan by the $10 000 January payment.
Adjustment H made another reduction to Mr. Stevenson s loan balance. As
discussed previously, this adjustment reduced the loan balance by $397 billed for
computer consulting fees that should have been included within the management fee.
Adjustment J to Stockholders' Equity
The Company s 1999 revenues were overstated by at least $1 472 (see detailed
discussion in the next section of this report). Those revenues were included within
retained earnings and stockholders' equity as part of income for the year. As a result, this
overstatement was removed from stockholders' equity as shown on Schedule 4.
xv.REVENUES
Company personnel prepared and provided various revenue reports. These
revenue amounts varied from approximately $61 800 to $62 100. For use in determining
the Company s estimated revenue requirement, Staff used the most conservative amount
provided by the Company for the test year. Subsequent to this review, the Company
reported 2001 revenues as $63 994.
The revenues reported by the Company for the 1999 test year (as adjusted below)
are significantly higher (approximately 20%) than those reported for the 1997 test year
($49 875). In an attempt to quantify this growth, Staff compared the October 2000
customer list to the June 1998 customer list provided by the Company. That comparison
STAFF FINANCIAL ANALYSIS NOVEMBER 30 2001
showed an increase in revenue greater than that identified above. However, given the
nature of the records maintained by the Company, growth may not be the only reason for
the difference in revenues. Staff adjusted the revenues reported by the Company as
follows:
Adjustment For Out-Of-Period Revenues (Balance Forward Amounts)
The $61 835 revenue amount used in this report is overstated by at least $1,472.
This amount represents errors and balances from the prior year that were included in the
revenue report prepared by the Company. This overstatement stemmed from the
installation of a new software application used for, among other things, billings. The
February 1999 billings, which should represent January service were overstated because
the revenue reported for that month included some balances from the previous year.
Therefore, Staff reduced revenues by $1 472. Correspondingly, Staff also reduced
stockholders' equity on Schedule 4 by the same amount because the revenue closed to
that account balance was $1,472 greater than it should have been.
XVI. REIMBURSEMENT FOR COSTS ASSOCIATED WITH ATLANTA FIRE
In the year 2000 , some of Atlanta Power s lines and equipment were destroyed
during the summer fire season. In 2001 the Company received over $25 000 from the
Forest Service for costs Lynn Stevenson estimated as being associated with the fire.
Being extraordinary items (not ongoing costs on a going forward basis), neither of these
events affected the test year of this analysis, and were not pro formed into the revenue
requirement estimated in this report. However, the accounting treatment of this
reimbursement should be evaluated in future reviews.
XVII. ALTERNATE EARNINGS SUMMARY ASSOCIATED WITH FERC
LICENSING
In the preceding pages of this report, fees associated with FERC licensing and the
Snake River Basin Adjudication (the water claim associated with the dam) were
capitalized and amortized over the estimated life of the FERC license (35 years).
Another alternative would be to expense the total costs over a 10-year period and not
capitalize the costs - essentially treating the costs similar to rate case costs but expensing
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
the costs over a longer period. This cost treatment would be on a one-time basis for this
Company under these particular circumstances.
This alternate treatment requires that the rate base, expenses, cost of capital and
revenue requirement be recalculated by removing adjustments that capitalized and
amortized the costs over 35 years and replacing them with costs expensed over a 10-year
period. This alternate treatment would result in a revenue requirement $235 greater than
the revenue requirement calculated when capitalizing those costs.
Staff estimates that when FERC license costs are expensed over a 10- year period
the Company is over-earning by $2 983 (see Schedule 6). Staff estimated Atlanta
Power s revenues at $60 363. Expenses were estimated as $49 047 (see Schedule 8) and
rate base was estimated as $88 661 (see Schedule 7). Using the estimated 1999 capital
structure of the Company, embedded cost of debt, and a 10% cost of equity, Staff
calculated an overall rate of return of9.12% (see Schedule 9). The rate of return
produced a required return on long-term debt of$7 199 and return on equity grossed up
for taxes of$1 134. This results in an overall return of$8 333 (see Schedule 6).A. Capital Structure and Return on Equity
Staff has used the estimated adjusted 1999 capital structure of Atlanta Power as
follows:
Capital Component Dollar Amount Capital Structure
Long Term Debt $67 455 89.98%
Stockholders' Equity 515 10.02%
Staff has used a return on equity of 10%. Staffs recommended capital structure
and return is reflected as follows:
, " ..'-:"
ST AFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
Capital Weighted
Structure Embedded Cost Cost
Debt 89.98%Various - See Schedule 9 12%
Equity 10;02%10.0000%00%
Rate of Return 100.00%12%
STAFF FINANCIAL ANALYSIS NOVEMBER 30, 2001
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2
ATLANTA POWER COMPANY
DETAIL OF OPERATING EXPENSES
1999 TEST YEAR
EXPENSES CY99
POWER GENERATION - LABOR 000.
POWER GENERATION - MATERIALS & SUPPLIES 35,89 HC - Helwig Carbon Products
SERVICES 468.
500,
178.
59.
555.
129.
891.TOTAL SERVICES
GENERAL OFFICERS SALARIES/MANAGEMENT FEES 000.
PROPERTY TAXES 898.
DEPRECIATION ON PLANT & AMORTIZATION OF LICENSE 700.42
AMORTIZATION OF CONTRIBUTIONS 874,002
TOTAL EXPENSES EXCLUDING INCOME TAXES 652.
STAFF ADJUSTMENT F
STAFF ADJUSTMENT G
(396,50)
i141.25)
TOTAL ADJUSTMENTS TO EXPENSES (537.75)
TOTAL ADJUSTED EXPENSES 114.
SUP - Special Use Permit
INS - Insurance
Meals
Bank Fees
Acct - Accountant Billing
PUC - Regulatory Charge
F - Adjustment removes $396.50 of computer consulting charges which management fee should cover,
G - Adjustment removes costs associated with audit appointment for the 1997 test year audit with IPUC Staff
since this is not an ongoing cost on a going forward basis.
auditskeds;Rate Expenses Schedule 3
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ATLANTA POWER COMPANY
WORKING CAPITAL SCHEDULE
1999 TEST YEAR
LONG INVESTOR SHORT OTHER
DESCRIPTION TERM SUPPLIED TERM SOURCES
CASH 553,
ACCOUNTS RECEIVABLE 106.
MATERIALS AND SUPPLIES 238.
PREPAID EXPENSES 3,468.
NET UTILITY PLANT 130 963.
ACCOUNTS PAYABLE 725.
ACCOUNTS PAYABLE - FERC LEGAL FEES 329.48
LONG TERM DEBT DUE BY CURRENT YEAR END 330.
NET CONTRIBUTION IN AID OF CONSTRUCTION 251.66)
LONG TERM DEBT 769.
EQUITY 923,
TOTALS 132 950,103 023.128.055.
WORKING CAPITAL (NEGATIVE)(29 926.90)(29 926.90)
Working Capital;auditskeds Schedule 5
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ATLANTA POWER COMPANY
ALTERNATE DETAIL OF OPERATING EXPENSES1999 TEST YEAR
EXPENSES CY 99
POWER GENERATION - LABOR 000.
POWER GENERATION - MATERIALS & SUPPLIES 35,89 HC - Helwig Carbon Products
SERVICES 468,
500.
178.
59.
555.
129.
891.TOTAL SERVICES
GENERAL OFFICERS SALARIES/MANAGEMENT FEES 000,
PROPERTY TAXES 898,
DEPRECIATION ON PLANT & AMORTIZATION OF LICENSE 700.42
AMORTIZATION OF CONTRIBUTIONS 874,00)
TOTAL EXPENSES EXCLUDING INCOME TAXES 652,
STAFF ADJUSTMENT F
STAFF ADJUSTMENT G
(396.50)
(141.252
TOTAL ADJUSTMENTS TO EXPENSES (537,75)
TOTAL ADJUSTED EXPENSES WHEN FERC
LICENSING IS CAPITALIZED 114.
REMOVE FERC AMORTIZATION CALCULATED
ON A 35-YEAR BASIS
ADD FERC AMORTIZATION EXPENSED ON
A 10-YEAR BASIS
275.01 )
207,
ALTERNATE OPERATING EXPENSES WHICH
TREATS LICENSING COSTS AS A 10-YEAR EXPENSE 046.
SUP - Special Use Permit
INS - Insurance
Meals
Bank Fees
Acct - Accountant Billing
PUC - Regulatory Charge
F - Adjustment removes $396.50 of computer consulting charges which management fee should cover.
G - Adjustment removes costs associated with audit appointment for the 1997 test year audit with IPUC Staff
since this is not an ongoing cost on a going forward basis.
auditskeds;Rate Expenses with 10-yr FERC Schedule 8
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ATLANTA POWER CUSTOMER SURVEY
RESULTS AND ANALYSIS
On September 10, 2002 the Commission Staff mailed a questionnaire to all 65 customers
of Atlanta Power Company. A copy of the questionnaire and cover letter is attached to this
report. The questionnaire consisted of just five questions on one page plus the opportunity to
add additional coinments on the back of the page. Questions 1 and 2 gathered background
information that the Staff believed would be helpful in understanding the customers ' responses
to the other questions. Question 1 asked for infonnation concerning the amount oftime the
property is occupied annually. Question 2 asked if the property had its own backup generator.
Questions 3, 4 and 5 were designed to determine the customers' desire for an Atlanta Power-
owned system backup generator, an additional backup person to troubleshoot the system, and a
telephone-based messaging system to be used by Atlanta Power Company to communicate with
customers. Fifty of the 65 questionnaires were returned.
Backup Generation
The single most striking conclusion that can be reached from customer responses to the
questionnaire is that Atlanta Power customers do not want to pay higher rates for a Company-
owned onsite backup generator. Only 1 of 50 customers responding indicated that they would be
willing to pay higher rates for a Company-owned backup generator, and that one customer
qualified her response with some specific conditions. Thirty-four of 50 customers were
interested in a Company-owned backup generator if it could be provided without a rate increase
and 15 of 50 customers saw no need for a Company-owned onsite backup generator even if it
could be provided at existing rates. Fifteen of the 50 responding customers already have their
own backup generators. Another 8 of 50 resporidents do not have backup generators and see no
need for Atlanta Power to do any thing different than it is doing now even if a Company-owned
backup generator could be provided with no increase in rates.
OCTOBER 24, 2002
Additional Atlanta Power Employee
Question No.4 caused some confusion. For years the two people available to
troubleshoot and repair system problems have been Lynn Stevenson, who does not live in
Atlanta, and Dave Gill, who does. Dave has a full-time job with the Atlanta Highway District
and is not always in town or immediately available to work on Atlanta Power Company system
problems. Since the initial Atlanta Power customer complaint filed with the Commission in
2000, Atlanta Power has added a third person, Randy Nye, who lives and is employed in Atlanta.
He is often available to troubleshoot system problems when the other two are not. The fact that
Randy Nye was added as an Atlanta Power backup person well before the questionnaire was
mailed caused the confusion. Some survey respondents knew of his affiliation with Atlanta
Power and some did not. The question on the survey assumed that Atlanta Power customers did
not know of his affiliation, but written comments indicate that some did. With that knowledge
some respondents may have assumed that the questionnaire was trying to determine if a fourth
person was needed, which is not the case.
This question was designed to determine the customers ' desire for a third person living in
Atlanta to troubleshoot system problems when Lynn Stevenson or Dave Gill are not immediately
available. Twenty-six of 47 respondents were in favor of additional Atlanta Power help and
of 47 were happy with the status quo. Three survey respondents did not answer this question.
Communication with Customers
The questionnaire provided two choices concerning Company communications with
customers for planned outages or emergency repairs. Those who responded chose between the
status quo, which was assumed to be very little communication, and a local telephone number
that would have a recorded message. Customer comments indicate that there is more
communication between Atlanta Power and its customers than the Staff assumed. Atlanta Power
has provided some planned outage and system repair information to the Post Office, Hub and
Beaver Lodge, which are gathering points in the community.
Thirty-two of 47 respondents wanted a local phone message to inform them of planned
outages and update them on system emergency repairs. Fifteen of 47 were happy with the status
quo. Three respondents did not answer this question.
OCTOBER 24, 2002
Other Customer Concerns
, Thirty-three of 50 questionnaires contained additional comments. Concerns other than
those previously discussed are listed below in order of frequency mentioned.
5 - Additional preventative maintenance needed
Rates are too high
3 - A leased backup generator should not be shut off at night
Current rates already include the cost of a Company-owned backup generator
Customers should provide their own backup generators
2 - Poor service provided for monthly "Service Fee
Low voltage problems
Food spoilage during outages
1 - Gate loan costs are paid and should come out of rates
Poor power quality causes appliance damage
Green Ranch backup generators could provide system backup
not have enough capacity to back up the whole system)
(Staff Note: They do
Keith Hessing,
Staff Engineer
Attachments
u:khessin:Atlanta power/report on survey results
OCTOBER 24, 2002
IDAHO
PUB Lie UTI LIT I commiSSion
Dirk Kempthome, Governor
o. Box 83720, Boise, Idaho 83720-0074
September 10, 2002
Paul Kjellander, President
Marsha H. Smith, Commissioner
, Dennis S. Hansen, Commissioner
TO:
The Idaho Public Utilities Commission is reviewing concerns of some of the customers of Atlanta
Power Company as expressed in petitions filed with the Commission. The Commission Staff's review
will include an audit of the Company s books and the enclosed survey that is intended to determine each
customer s desire for service inlprovements. Information obtained from the audit and customer survey
will be presented to Atlanta Power Company and the Commissioners here at the Public Utiliti~sCommission.
This survey is intended to gather minimal background information and address each customer
desires concerning three specific system improvements requested in the petitions. These three areas
improvement are back-up generation, availability of personnel to solve system problems and
communications concerning system outages and repairs. You may address other desired system
iinprovements or make other comments ill the comments 'section of the questionnaire.
By Idaho law, the rates of Atlanta Power Company are established to cover the necessary costs
that the' Company incurs in providing service to its customers. This is an overly simple statement but it is
generally true. Service improvemeI).ts cost money that the Company is justified in recovering from it~
customers through rates. It has been several years since Atlanta Power s rates were last reviewed.
Circumstances change over time. New customers increase Company revenues and costs. Company costs'
are decreased as capital equipment depreciates.' Atlanta Power Company s non-functional back-up
generator is fully depreciated. All of this is to say that a rate increase for Atlanta Power Company mayor
may not be justified if some or all of the propostd improvements are made. Company/Customer
comm~cations and an additional part-tiine support person in Atlanta may be very low cost
improvements. Company-owned, on site back-up generation for the system could be quite expensive
depending on the. size, age and condition ?fthe equip~ent.
Please take a few moments to fill out the enclosed questionn,aire and return it in the self addressed
stamped envelope. One questionnaire is being sent to each Atlanta Power Cornpany customer. Please do
not copy the questionnaire and return multiple copies. The responses of individual customers will be held
. confidential and will not be released to anyone outside of the Public Utilities Commission. Please
respond by September 30, ?002. If you have questions please call me at the number given below.
Sincerely,
Keith Hessing, Staff Engin
[phone]
khessin/ Atlanta power/~ustomer survey
-, ..-----
-, ,
,-, _u
- -.. -" -. -j "
IDAHO PUBLIC UTILITIES COMMISSION QUESTIONNAIRE
CONCERNING
ATLANTA PO~R CO~ ANY
Check the box that most accurately represents your position or circumstance.
1. Your property served by Atlanta Power Company is occupied:
-0 Year around
0 Summer
0 Weekends and/or vacations
Conteming customer owned generators or alternative electric supply equipment:
This property has electric supply when the Atlanta Power electric
system is not operating.
This property has a customer provided alternate e-Iectric supply system.
Concerning-Atlanta Power Company system back-up generation:
0 The CUlTent plan for providing back-up generation is adequate. (Currently a back-up
generator is leased and brought to Atlanta from Boise when a multi-day outage is
~dentified.
Atlanta Power owned pennanent on-site system back-up generation would be
beneficial but should only be provided if it can be provided without h"1Creasing rates.
0 Atlanta power owned pennanent on-site system backup generation is important and I
would be willing to pay higher electric rates to have it available. (preliminary studies
indicate that rates could increase by as much as $15.00 per month.
4. Concerning the availability of Atlanta Power personnel to troubleshoot and repair the system when
the power goes off:
0 I have no problem with the Company s current response to system outages. (Often no
one is immediately available to respond to system outages.
Atlanta Power should have a person in town to trouble shoot and make basic
repairs to the system on a full time or nearly full time basis. (In orderto
minimize costs this person could be an existing Atlanta resident with some
specialized training.
Concerning communications betWeen Atlanta Power Company and its customers about outages and
system repairs:
0 I have no problem with the way these communications are handled now. (CUlTently
little or no information is provided to customers.)
0 I would use and benefit ITom a local telephone number with a message
containing the time and expected duration of planned maintenance outages and the
expected durations of unplanned outages.
Other Comments: (please use back of page.
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