20080418IPUC Response to APAC Motion to Strike.pdf

UNITED STATES OF AMERICA
S. DEPARTMENT OF ENERGY
BEFORE THE
BONNEVILLE POWER ADMINISTRATION
2007 SUPPLEMENTAL WHOLESALE
POWER RATE ADJUSTMENT
PROCEEDING
BPA Docket No. WP-
RESPONSE OF IDAHO PUBLIC UTILITIES COMMISSION TO
ASSOCIATION OF PUBLIC AGENCY CUSTOMERS' MOTION TO
STRIKE A PORTION OF THE DIRECT TESTIMONY OF THE
IDAHO PUBLIC UTILITIES COMMISSION
INTRODUCTION
On April 2008, the Association of Public Agency Customers ("AP AC"
submitted a motion to strike portions of Idaho Public Utilities Commission ("IPUC"
witness LouAnn Westerfield's Direct Testimony filed on March 31 , 2008. For the
reasons more fully stated below, the Motion should be denied in its entirety.
ARGUMENT
APAC HAS FAILED TO CITE TO ANY CONTROLLING LEGAL
AUTHORITY DEFINING IPUC WITNESS WESTERFIELD'
DIRECT TESTIMONY AS INADMISSIBLE "ARGUMENT" OR
LEGAL OPINION.
Movant has failed to include any relevant case law to assist the trier of fact in its
review of Witness Westerfield's testimony. Instead, movant merely offers conclusory
statements that "the portions of the testimony constitutes legal opinion and argument;
and "identified portions of testimony offer opinions on the application of statutes and
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 1 of 8
BPA rates. .." WP-07-AP-, at pp. 1-2. It has neglected to offer any precedential
support for the definition of the terms "legal opinion" or "legal argument."
The definitions section of the BP A Rules of Procedure Governing Rate Hearings
defines a legal issue as "any issue grounded on any contractual right or obligation, any of
BP A's organic statutes, the Administrative Procedure Act, 5 U.C. 551 , et seq., or the
Trade Secrets Act, 18 U.C. 1905 , which has a bearing of the propriety of a rate
proposed by BP A or any party," BP A Rules of Procedure Governing Rate Hearings, 9
1010.2(f), but it does not offer a substantive definition of "legal opinion" or "legal
argument. "
It is beyond cavil that argument and legal opinion are the "province of the lawyer, not
the witness." WP-07-01. However, in order to prevail on its motion the movant must
meet its burden to demonstrate that Witness Westerfield's testimony falls within that
rubric. See Farmland Mut. Ins. Co. v. AGCD Corp, 2008 WL 763215 , * 1 (D. Kan. 2008)
The movant has the burden of demonstrating that evidence is inadmissible on any
relevant ground.) Accordingly, movant must not be allowed to rely solely upon "bare
assertions" as the only support for its motion. Celotex Corp. v. Catrett 477 U.S. 317
328, 106 S.Ct. 2548, 2555 (1986) (White, 1., concurring).
II.IPUC WITNESS WESTERFIELD IS AN EXPERT IN HER FIELD
AND THEREFORE SHOULD BE ALLOWED TO OFFER HER
OPINIONS REGARDING GENERAL RA TEMAKING CONCEPTS.
IPUC Witness Westerfield'Qualification Statement, outlining her extensive
education, employment history and training in the area of utility ratemaking, establishes
her as an expert witness qualified to offer her opinion regarding generally accepted
practices and norms within the utility industry. See WP-07-Q-ID-1. Witness Westerfield
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 2 of 8
has more than twenty years of experience in the area of utility regulation and during that
time has served on the staff of three (3) separate state utility commission staffs, Arkansas,
Wyoming and Idaho. In addition to her current position as a policy strategist for the
IPUC, she has worked as a senior policy and rate analyst, and as an internal auditor and
financial analyst for a municipal utility.Finally, she has offered testimony before
numerous state utility commissions , the Federal Energy Regulatory Commission, the
United States Securities and Exchange Commission and the Southwestern Power
Administration.
AP AC has implicitly acknowledged Witness Westerfield's status as an expert in the
field of utility ratemaking. To date, AP AC has not offered a challenge to Witness
Westerfield's qualifications and therefore should not now be heard to complain of her
testimony regarding well known and generally accepted utility ratemaking theories and
concepts. See State v. Florczak, 76 Wash. App. 55 , 72, 882 P.2d 199 (1994) (A party
failure to challenge an expert's credentials amounted to a waiver).
Testimony regarding the 'ordinary practices of those engaged in (a particular
business) . . . or concerning other trade customs' is admissible. . .Moffitt v. Icynene
Inc.407 F. Supp 2d 591 , 606 (D. Vt. 2005)(quoting Marx Co., Inc. v. Diners ' Club,
Inc., 550 F.2d 505, 509 (2d Cir.1977). This specific type of testimony, evincing the
proponent's "scientific, technical, or other specialized knowledge " is always admissible
to "assist the trier of fact to understand the evidence or determine a fact in issue" so long
as the witness is "qualified as an expert by knowledge, skill, experience, training, or
education. . ." Federal Rule of Evidence 702.
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 3 of 8
The trier of fact is permitted a measure of discretion in its inquiry as to whether the
IPUC testimony is admissible testimony from an expert.Kumho Tire Co., Ltd.
Carmichael 526 U.S. 137, 141 , 119S.Ct.1167, 1171 (1999). The hearing officer in the
original rate case that preceded this supplemental proceeding offered a definition of
opinion evidence' and ruled that testimony offered by expert witnesses revealing their
opinions regarding specific facts in dispute would be admissible:
Opinion Evidence is 'evidence of what the witness thinks
believes, or infers in regard to facts in dispute as
distinguished from his personal knowledge of the facts
themselves and is not admissible. except in the case of
experts.
Order No. WP-07-, February 22 2006 (quoting Black's Law Dictionary, 4th Edition)
(emphasis added).
Witness Westerfield's testimony does not contain impermissible argument or legal
OpInIOn. The opinions expressed in Witness Westerfield's testimony should be admitted
into evidence because she is qualified expert witness and therefore should be allowed to
offer her opinion regarding factual issues arising from BP A's Lookback Study and
Analysis.
III.IPUC WITNESS WESTERFIELD'S TESTIMONY IS ENTIREL Y
APPROPRIATE FOR THIS RATE CASE PROCEEDING.
IPUC Witness Westerfield's entire testimony should be deemed admissible. The
portions of the IPUC testimony that AP AC has moved to strike were simply included to
provide context and address the scope and impact ofBPA's proposed Lookback Analysis
upon the IOU customers within Idaho. See Columbia Gulf Transmission Company,
Columbia Gas Transmission Corporation, 20 FERC 63051 , Docket No. RP75-105-000
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 4 of 8
August 23 , 1982 (Order Denying Motion to Strike expert testimony and finding that
witness
' "
accusations that the initial decision r of the Presiding Judge J was in error
amounted to "factual assertions" about the "impact of the Commission s stand-alone
policy. . . ". (Emphasis added).
The testimony cited by AP AC focuses primarily on two areas: 1) IPUC testimony
referring to the general ratemaking concept known as "retroactive ratemaking;" and 2)
IPUC testimony referencing the so called "deemer" accounts managed by BP A on behalf
of the Northwest IOU'
The Rule Against Retroactive Ratemaking Is a Bedrock Principle of
Conventional Utility Ratemaking and a Widely Used Policy Tool by Utility
Regulation Professionals.
The term "retroactive ratemaking" did not originate as a legal term emanating from a
court of law. While it is true that courts have universally cited and endorsed the rule
against retroactive ratemaking, this industry-wide term owes its conception to the
professionals within the utility regulation field. See James C. Bonbright et aI.Principles
of Public Utility Rates (2d ed. 1988) at p. 198 ("Nor as a general rule of ratemaking will
a utility be allowed to set rates to recover past losses.Commissions are generally
proscribed from fixing retroactive rates.
. .
) In short, it is a term used to describe a
generally accepted ratemaking principle used by utility ratemaking professionals to
prevent regulated utilities from applying today s prices to yesterday s service.
The Issue of IOU Deemer Balances are a Permissible Subject for Direct
Testimony Because they Directly Affect BP Lookback Analysis and the
IOU's Ability to Receive Future REP Benefits.
IPUC Witness Westerfield's testimony concerning the deemer balance calculations
was submitted in direct response to BP A's invitation to offer alternatives to its proposed
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 5 of 8
Lookback Analysis and Approach. See 78 Fed. Reg. 7539, 7551 (February 8 , 2008)
BP A encourages parties to propose alternatives to this or other elements of BP A'
proposal. . .
);
see also WP-07-BPA-, Testimony of Raymond D. Bliven, Charles
W. Forman, JR. and Elizabeth A. Evans, Witnesses for Bonneville Power Administration
Section 7: Alternatives to BPA's Lookback Approach, at p. 28, Lines 5-6 ("BPA
welcomes other approaches to respond to the Court's Rulings.
In full compliance with BP A's open invitation for alternative views and approaches
Witness Westerfield offered her expert opinion pertaining to the foreseeable negative
consequences that BP A's deemer balance calculations would have upon the Lookback
Analysis and, consequently, upon the IOU's residential and small farm customers in
Idaho. She then expanded upon her analysis of BPA's Lookback approach and offered
an alternative approach on how to address the deemer balance issue in response to the 9th
Circuit decisions. In her testimony, Witness Westerfield makes only general references
to the Northwest Power Act and the 9th Circuit opinions and does so only to provide a
necessary context behind the initiation of this rate proceeding and BPA's Lookback
Analysis.
Ironically, AP AC's pre-filed testimony offered an excellent example of what
constitutes inadmissible legal opinion and argument when it commented on the recent 9th
Circuit opinions in its testimony and, in contrast to the IPUC testimony, went so far as to
offer a legal opinion as to the precise holding in those cases. See WP-07-AP-, Direct
Testimony of Lincoln Wolverton, at p. 1 , Lines 17-18. Basic notions of equity demand
that AP AC be precluded from 'having it both ways.' AP AC should be estopped from
objecting to the IPUC testimony because it has submitted witness testimony containing
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 6 of 8
blatant and obvious legal conclusions. See Precision Instrument Mfg. Co. v. Automotive
Maintenance Machinery Co. 324 U.S. 806, 814, 65 S.Ct. 993, 997 (1945) ("Equitable
maxim that he who comes into equity must come with clean hands . . . is far more than a
mere banality.) (Emphasis added).
To be sure, every party, including BP A, to the instant proceeding has made reference
to the 9th Circuit decisions and the Northwest Power Act in their respective testimonies.
Referring to these decisions and the statute which gave rise to the BPA's Residential
Exchange Program can hardly be avoided. Moreover, if a party is to effectively respond
to BPA's invitation and offer a thoughtful critique and/or a useful alternative to the
BPA's proposal it ought not be prevented from doing so.
CONCLUSION
For the aforementioned reasons stated above, the Motion should be denied in its
entirety.
~~spectfullY:~
eil Price
Deputy Attorney General
Idaho Public Utilities Commission
PO Box 83720
472 Washington Street
Boise, ID 83720-0074
Idaho State Bar. No. 6864
Phone: [phone]
Email: neil.price(illpuc.idaho.gov
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 7 of 8
CERTIFICATE OF SERVICE
Brenda Sorrell, certify that I have caused the Response of Idaho Public Utilities
Commission to Association of Public Agency Customers ' Motion to Strike a Portion of
the Direct Testimony of the Idaho Public Utilities Commission to be served by fax and
electronic mail on the parties listed below pursuant to Order No. WP-07-HOO-43.
Dated this 18th day of April 2008 at Boise, Idaho.
Brenda Sorrell
WP-O7 Supplemental Wholesale Power Rate Adjustment Proceeding Service List
(AP) ASSOCIATION OF PUBLIC AGENCY CUSTOMERS
Michael Alcantar
Donald Brookhyser
Alcantar & Kahl, LLP
1300 SW Fifth Avenue, Suite 1750
Portland, Oregon 97201
Phone: [phone]
Fax: [phone]
Email: mpa~a-klaw.com
Email: deb~a-klaw.com
(AP) ASSOCIATION OF PUBLIC AGENCY CUSTOMERS
Lincoln Wolverton
East Fork Economics
35011 NE North Fork Ave.
La Center, W A 98629
Phone: [phone]
Fax: [phone]
Email: lwolv~tds.net
IPUC Response to APAC's Motion to Strike
WP-07-ID-
Page 8 of 8