20031021Drake Direct.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
13
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE STATE)
OF IDAHO. )
)
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
THERESA DRAKE
CASE NO. IPC-E-03-
1
2
Q.
A.
Please state your name and business address.
My name is Theresa Drake. My business
3 address is 1221 West Idaho Street, Boise, Idaho.
4 Q. By whom are you employed and in what
5 capacity?
6 A. I am employed by Idaho Power Company as a
7 Senior Pricing Analyst.
8 Q. Please describe your educational background
9 and work experience.
10 A. In May of 1990 I received Bachelor of
11 Science Degree in Marketing with emphasis in Finance from
12 Jacksonville State University in Jacksonville, Alabama.
13 From June 1990 through February 1993, I was employed by the
14 Federal Reserve Bank in Birmingham, Alabama. During
15 February 1993, I relocated to Boise and was employed by
16 West One Bank managing the Marketing Customer Information
17 System, researching customer purchase behavior and
18 designing marketing campaigns around customers' needs. I
19 also formed a marketing database consulting firm prior to
20
21
becoming employed by Idaho Power.
January 1997 as a Pricing Analyst.
I joined Idaho Power in
In July 2001 my
22 position evolved into a Senior Pricing Analyst. My duties
DRAKE, DI 1
Idaho Power Company
1 as a Senior Pricing Analyst include involvement in
2 preparing the cost-of-service studies, unbundling studies,
3 development of the Company's tariffs, and managing the
4 Company's Green Power Program. I also act as a regulatory
5 liaison for customer service related issues.
6
7
Q.
A.
What is the purpose of your testimony?
My testimony addresses proposed updates and
8 changes to several of the Company's service provisions,
9 including numbering and organization changes and changes to
10 non-recurring charges, such as service establishment,
11 reconnection, returned checks and customer deposits.
12 Q. Have you prepared any exhibits?
13 A. Yes, Exhibit No. 50 explains how the
14 proposed charges relating to service establishment and
15 reconnection were derived.
16 Q. Do you intend to discuss every proposed
17 change to the tariff at this time?
18 A. No. While a few of the changes I discuss
19 are substantive in nature, a significant number of changes
20 are "form" or "housekeeping" in nature only and do not
21 change the scope, effect or application of the various
22 tariffs. The specific changes to the service provisions I
DRAKE, DI 2
Idaho Power Company
1 address are detailed in Ms. Brilz's Exhibit No. 48, pages 1
2 through 52. These revisions are shown in legislative
3 format in Exhibit No. 48 so that parties reviewing them
4 will be able to readily identify the proposed changes.
5 Q. Let's begin with the changes being proposed
6 to the numbering of the Company's General Rules and
7 Regulations. Would you please explain the nature of the
8 changes and why the Company is proposing them?
9 A. First, on pages 1 through 52 of Ms. Brilz's
10 Exhibit No. 48, the Rules and Regulations have been more
11 specifically separated by category than in the previous
12 tariff. The change in format is intended to make specific
13 topics easier to locate by creating more categories in the
14 Rules and Regulations.
15 Second, Rule Fis now labeled, "Service
16 Establishment and Discontinuance" and clearly identifies
17 activities involving initiating and ceasing service.
18 Billing-related items have been moved to Rule G, formerly
19 "Corrected Billing", which is now labeled "Billings".
20 Deposit provisions have been assigned a separate rule,
21 Rule L.
22 Q. What are the substantive changes proposed to
DRAKE, DI 3
Idaho Power Company
1 the Company's "General Rules, Regulations, and Rates"?
2 A. The current Account Processing Charge,
3 Reconnect Fee, and Field Collection Charge have been
4 updated to reflect current costs. In addition, the
5 Company has elected to adopt deposit criteria for large
6 commercial and special contract customers as provided in
7 IDAPA 31.21.01 Rule 601.
8 Q. What provisions are included under Rule F,
9 Service Establishment and Discontinuance?
10 A. Requirements described in Rule F include
11 Service Establishment, Service Reconnection, Discontinuance
12 of Service, Termination Practices, and Field Collection.
13 Q. Please describe Service Establishment.
14 A. Service establishment describes the
15 condition where a customer desires to activate an account
16 with the Company and the service is currently energized.
17 When a customer contacts the Company and requests service
18 at a specified service point, the Company will determine if
19 the requested service point is currently energized. If the
20 service point is energized, the Company performs the work
21 necessary to complete the transaction; the customer's name,
22 address, and other pertinent information are entered or
DRAKE, DI 4
Idaho Power Company
1 updated into the Customer Information System and the
2 Company dispatches personnel to the service point to
3 collect an initial meter read. The proposed Service
4 Establishment Charge reflects the costs of performing these
5 tasks.
6 Q. Does the Company currently have a charge
7 associated with establishing service?
8 A. Yes. The Account Initiation Charge is
9 currently assessed. However, no distinction is currently
10 made regarding whether the line is currently energized or
11 not.
12 Q. Will the Service Establishment Charge apply
13 if a customer requests service establishment at a non-
14 metered service point?
15 A. The Service Establishment Charge is not
16 applicable to non-metered service points. Non-metered
17 service points such as cable TV power supplies, telephone
18 booths, street lighting, etc., are unique in respect to the
19 degree of account establishment work, as described above,
20 the Company may perform. In particular, no meter reading
21 is required. Therefore, the costs to establish service for
22 non-metered accounts are recovered through the standard
DRAKE, DI 5
Idaho Power Company
1 service schedule charges.
2 Q. What if the customer requests service at a
3 location where the service line is not currently energized?
4 A. Service Reconnection describes the condition
5 where service was once energized, has been disconnected,
6 and is presently requested by the customer to be re-
7 energized. The Service Reconnection Charge reflects the
8 costs of tasks performed to physically reconnect the
9 service and update the pertinent information in the
10 Customer Information System.
11 Q. Will a customer be charged both the Service
12 Establishment Charge and the Service Reconnection Charge?
13 A. No. The Service Reconnection Charge
14 includes the costs associated with the tasks of service
15 establishment plus the costs of physically reconnecting a
16 service line.
17 Q. What are the fees associated with these
18 transactions?
19 A. The Service Establishment Charge as detailed
20 on page 140 of Ms. Brilz's Exhibit No. 48, is $20 for all
21 metered service points. The Service Reconnection Charge,
22 also detailed on page 142 of Exhibit No. 48, varies with
DRAKE, DI 6
Idaho Power Company
1 the skill level required of the employee dispatched to
2 perform the work. The skill level required is determined
3 by the line voltage typically serving the customer class.
4 Customers taking service under Schedules 1, 7, and 9
5 requesting reconnection during normal business hours will
6 be charged $20. Customers taking service under Schedules
7 15, 19, 24, 25, 40, 41, and 42 requesting reconnection
8 during normal business hours will be charged $40. The
9 higher fee for the latter schedules represents the required
10 expertise of the dispatched employee to work with the
11 typically higher voltage at the point where service is
12 reconnected. Exhibit No. 50, page 2, details the
13 derivation of these charges.
14 Q. Can reconnection service be obtained outside
15 of normal business hours?
16 A. Yes. The charges by rate schedule outlined
17 on page 142 of Exhibit No. 48 include two additional block-
18 hours and associated charges. The block-hour structure is
19 the same as that currently in place. However the charges
20 have been updated to reflect current costs.
21 Q. Please explain why the Company proposes the
22 block-hour charges.
DRAKE, DI 7
Idaho Power Company
1 A. As detailed on Exhibit No. 50, page 2, the
2 charge has been updated in two ways; first, to delineate by
3 the type of skilled employee required to perform the work
4 and second, to recognize the higher cost to serve those
5 customer requests for reconnection after normal working
6 hours due to the overtime hourly rate paid to employees.
7 In most cases, during the third block-hours of 9:01 p.m. to
8 7:29 a.m., two employees are dispatched for safety reasons.
9 The proposed charges reflect the costs to serve the
10 customer requests based on the time the customer requests
11 service reconnection.
12 Q. In looking at the second and third block-
13 hours for reconnection of customers taking service under
14 Schedules 1, 7, and 9 on page 1 of Exhibit No. 50, the
15 current costs are slightly lower than the charges currently
16 approved. Please explain why you are proposing the charges
17 remain unchanged.
18 A. Service provided during the after-hour time
19 frames poses safety concerns for our employees. The
20 Company proposes keeping the charges at their current level
21 to encourage Reconnection Service during the lower-priced
22 first block-hours.
DRAKE, DI 8
Idaho Power Company
1 Q. Are any changes made to the Termination
2 Practices section?
3 A. No. The Termination of Service provision
4 remains unchanged from our current tariff. The provision
5 states the termination practices as provided by the IPUC
6 Utility Customer Rules and Regulations will be enforced.
7 Q. What updates have been made to the Field
8 Collection provision?
9 A. The Field Collection Charge is designed to
10 recover the costs incurred when Company personnel are
11 dispatched to terminate service and the Customer elects to
12 make a payment or payment arrangement to the dispatched
13 personnel to avoid termination. If the customer chooses not
14 to pay the necessary amount to avoid termination, the
15 dispatched Company personnel will perform the termination
16 of service at no charge. The Field Collection Charge as
17 detailed on page 1 of Exhibit No. 50, has been updated to
18 account for the variation of skill level required of the
19 employee dispatched to perform the work. The skill level
20 required is determined by the line voltage typically
21 serving the customer class.
22 Q. In his testimony on page 14, Mr. Obenchain
DRAKE, DI 9
Idaho Power Company
1 refers to an adjustment to other revenue to recognize
2 additional revenue to be collected from the Service
3 Establishment Charge, Service Reconnection Charge, and the
4 Field Collection Charge. Would you please explain the
5 basis for this adjustment?
6 A. Yes. Page 3 of Exhibit No. 50 details the
7 difference in revenues from the current charges to the
8 proposed charges.
9 Q. Other than consolidating the billing related
10 items into one rule, are there any other changes to Rule G,
11 Billings?
12 A. Yes. The Company is proposing to include a
13 description of its policy dealing with checks or other
14 payments returned non-paid by a customer's financial
15 institution. The Company has an established returned check
16 policy operated in conformance with the provisions of the
17 Idaho Code, and includes notification of the applicable
18 charge to customers on the monthly billing statement. By
19 listing the Returned Check Charge within the Company's
20 Rules and Regulations, the provision is clarified for
21 customers and is easier to reference for PUC staff and
22 Company employees. The corresponding Returned Check Charge
DRAKE, DI 10
Idaho Power Company
1 of $20 is listed in Schedule 66 (page 142 of Exhibit No.
2 4 8) •
3 Q. You mentioned earlier a new Rule L was
4 developed to address customer deposits. In addition to
5 creating a new Rule for deposits, has the criteria for
6 deposits changed?
7 A. Rule L was created to isolate and identify
8 deposit provisions for residential, small commercial, large
9 commercial, and special contract customers. Other than
10 moving the language from Rule F to Rule L, the provision
11 for residential and small commercial customers has not
12 changed. However, the Company has elected to establish
13 deposit criteria for large commercial customers and special
14 contract customers as provided under IDAPA 31.21.01 Rule
15 601.
16 Q. Briefly describe the deposit criteria for
17 existing large commercial and special contract customers.
18 A. For existing commercial and special contract
19 customers, a deposit may be required when the customer
20 fails to make a payment on the due date or the current
21 status of the customer's business does not pass an
22 objective credit screen.
DRAKE, DI 11
Idaho Power Company
1 Q. What are the deposit condition criteria for
2 new large commercial and special contract applicants?
3 A. A deposit may be required for service if the
4 applicant is applying for service for the first time, or
5 the nature of the applicant's business is speculative or is
6 the type of business that is subject to a high incidence of
7 failure, or if the applicant has an outstanding prior
8 service account debt with the Company.
9
10
Q.
A.
What is the proposed deposit amount?
The requested deposit amount will not exceed
11 two times the customer's actual or the applicant's
12 estimated highest monthly bill and is payable in two
13 installments.
14 Q. Why is the Company now seeking to implement
15 the deposit provision for large commercial and special
16 contract customers?
17 A. In recent years, the Company has become
18 increasingly exposed to the effects of certain businesses
19 falling delinquent on paying their accounts and to an
20 increased number of businesses claiming bankruptcy. Some
21 instances have occurred where an existing business customer
22 who has historically made consistent timely payments has
DRAKE, DI 12
Idaho Power Company
1 filed for bankruptcy and ceased business. Even one month's
2 worth of unpaid billing can amount to a sizable impact on
3 uncollectible amounts. For these reasons, the Company
4 plans to implement deposit criteria for large commercial
5 and special contract customers.
6 Q. Has the Commission previously approved
7 similar deposit provisions for any other utility serving
8 customers in Idaho?
9 A. Yes. Utah Power and Light has a similar
10 Commission approved provision listed under Sheet No. 9R.1-2
11 in the UP&L tariff.
12 Q. Are there any other updates to non-recurring
13 charges?
14 A. Yes. �Fractional Period Minimum Billings"
15 specifies the minimum bill requirements for each service
16 schedule when service is taken for a partial month. The
17 minimum bill amounts have been updated to be more
18 reflective of the costs associated with bill preparation.
19 While the minimum bill amounts do not equal the total cost
20 of preparing, producing, and delivering a bill and
21 recording subsequent payments, they reflect a portion of
22 those costs associated with providing service. The
DRAKE, DI 13
Idaho Power Company
1 specific minimum bill amounts for each service schedule are
2 detailed on page 143 of Exhibit No. 48.
3
4 B.
5
Q.
A.
Please explain the proposed change to Rule
Rule B, Definitions, includes clarification
6 of what is considered to be a normal Billing Period. While
7 a typical billing period is 30 days, the normal billing
8 period is considered to be 27-33 days.
9
10 period?
Q. Is 27-33 days new for a normal billing
11 A. No. The Company has a long standing
12 practice of considering a normal billing period to be 27-33
13 days. The Company proposes to add language to the
14 definition so that this practice is explicitly stated.
15
16 B?
Q. Is there any other change proposed to Rule
17 A. Yes. The definition of Connected Load
18 currently included in Rule Bis pertinent only to Schedule
19 72. Therefore, the definition is moved to Schedule 72.
20 Q. Are any changes proposed to Rule D,
21 Metering?
22 A. The only proposed update is to state that
DRAKE, DI 14
Idaho Power Company
1 the Company has the right to modify meter reading schedules
2 as required by changing conditions. Certain events can
3 trigger a meter reading schedule to be modified, such as
4 holidays or the alignment of meter read routes for better
5 operating efficiencies. The update to Rule D provides
6 clarification to customers.
7
8
Q.
A.
Does this conclude your testimony?
Yes.
DRAKE, DI 15
Idaho Power Company