20081024Parker Direct.pdf

BEFORE THE RECEIVED
200 OCT 24 PH 3: 29
IDAHO PUBLIC UTILITIES COMMISSIO~AHO PUBLIC
UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-08-10
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC SERVICE )
TO ELECTRIC CUSTOMERS IN THE STATE)OF IDAHO. )
)
)
)
DIRECT TESTIMONY OF MARILYN PARKER
IDAHO PUBLIC UTILITIES COMMISSION
OCTOBER 24, 2008
1 Q.Please state your name and address for the
2 record.
3 A.My name is Marilyn Parker. My business address
4 is 472 West Washington Street, Boise, Idaho.
5 Q.By whom are you employed and in what capacity?
I am employed by thé Idaho Public Utilities6A.
7 Commission as a Utilities Compliance Investigator. I
8 accepted that position with the Consumer Assistance Staff
9 in November 2002.
10 Q. What is your educational and professional
11 background?
12 A.Prior to my employment with the Idaho Public
13 Utilities Commission, I had twenty years experience
14 working in private industry for three different utilit~
15 companies. In 1973 and 1974, I was employed by Central
16 Alaska Utilities, a water company in Anchorage, Alaska, as
17 the Executive Secretary to the President of the company.
18 From 1982 until 1987, I was employed as a Customer Service
19 Representative for Idaho Power Company in Salmon, Idaho.
20 From February 1989 until November 2002, I was employed by
21 intermountain Gas Company in Customer Services. During my
22 last six years at Intermountain Gas, I supervised
23 representatives at the Customer Service Center's Emergency
24 Answering Service.
25 I received a Bachelor of Arts Degree in
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (D i) 1
STAFF
1 Management and Organizational Leadership from George Fox
2 University in Boise, Idaho in June 2002.
3 In June 2003 and June 2006, I attended the
4 National Low Income Energy Consortium Annual Conference in
5 Sacramento, California and Washington, D.C., respectively.
6 Q.Have you previously testified before the
7 Commission?
8 A.Yes, I have.
9 Q.What is the purpose of your testimony in this
10 proceeding?
11 A.The purpose of my testimony is to address:(1 )
12 customer comments received by the Commission regarding
13 this case; (2) customer relations; (3) convenience fees;
14 and, (4) irrigation deposits.
15 Q.Please summarize your testimony and
16 recommendations to the Commission.
17 A.I reviewed the customer comments and found that
18 one-third of those commenting were from low and fixed
19 income customers who were concerned about how they would
20 be able to pay higher electric rates and another one-third
21 questioned why existing customers had to pay for new
22 growth.
23 I reviewed the complaints and inquiries received
24 by the Commission over the past four years from Idaho
25 Power customers and identified a consistent decline from
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 2
STAFF
1 2004 to 2007.
2 I reviewed the Customer Service Center's call
3 answering performance and found that the Company's yearly
4 averages met the goal of answering 80% of calls within 30
5 seconds.
6 I identified technological advancements
7 implemented by the Company and how they have improved
8 customer service.
9 I reviewed the Company's forms required by the
10 Commission's Utility Customer Relations Rules and found
11 them to be compliant.
12 I addressed the Company's response to Staff's
13 concerns regarding how Idaho Power's irrigation customers
14 were kept informed of the Company's recent changes to its
15 irrigation deposit collection practices.
16 I recommend that the Company explore
17 alternatives to its policy of requiring customers to pay
18 convenience fees when paying their Idaho Power bills using
19 check-by-phone, credit card or debit card and report its
20 findings to the Commission Staff.
21 CUSTOMER COMMNTS
22 Q.Have you reviewed the written customer comments
23 that have been received by the Commission regarding this
24 case?
25 A.Yes. As of October 16, 2008, forty-nine (49)
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 3
STAFF
1 Idaho Power customers had submitted comments regarding the
2 proposed increase in Idaho Power's electric rates. All
3 the commenters opposed any increase to rates.
4 Q.What are the concerns mentioned most often by
5 customers?
6 A.The comments fell into two maj or categories.
7 One-third of those commenting cited Idaho Power's
8 reference in its press release to the fact that new growth
9 was a major driver in its need for a rate increase. Those
10 customers questioned why current customers had to pay for
11 new growth. Another one-third of the comments were from
12 fixed and low income customers who raised concerns about
13 the current economic conditions and how they would be able
14 to afford to pay higher electric rates.
15 Staff witness Hessing will discuss cost
16 allocation and the cost of growth. Staff witness Thaden
17 will discuss economic conditions and customers' ability to
18 pay.
19 CUSTOMER RELATIONS
20 Q.In the last four years, how many complaints and
21 inquiries has the Commission received regarding Idaho
22 Power?
23 A.Staff Exhibit No. MP #1 shows the number of
24 informal complaints and inquiries received since 2004.
25 Q.What did your analysis of complaints and
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 4
STAFF
2
1 inquiries since 2004 reveal?
A.There has been a consistent decline in the
3 number of complaints and inquiries received by the Idaho
4 Public Utili ties Commission from Idaho Power customers in
6
5 the past four years.
Q.Regarding complaints and inquiries registered at
7 the IPUC, how does Idaho Power compare to the other three
8 maj or regulated energy companies doing business in Idaho
9 since 2004?
10 A.In 2007, Idaho Power and Avista Utilities in
12
11 northern Idaho had the fewest complaints and inquiries on
a per 1,000 customer basis.From 2004 to 2006, Idaho
13 Power had fewer complaints and inquiries than two of the
15
14 major energy companies (see Staff Exhibit No. MP #2) .
Q.Is Idaho Power responsive to the Commission's
16 Utility Compliance Investigators during complaint
18
17 investigations?
A.Yes. Rule 404 of the Utility Customer Relations
19 Rules (UCRR) specifies that utilities must respond orally
20 or in writing to the Commission within ten business days
21 of receiving notification from the Commission that an
22 informal complaint against the Company has been received.
23 In 2007, the annual average number of days for Staff to
24 fully resolve complaints among all the energy companies
25 was 6. 15 . For Idaho Power complaints, the average number
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 5
STAFF
1 of days for Staff to resolve complaints in that same time
2 period was 5. 27 days.
3 Q.Is Idaho Power's Customer Service Center
4 telephone answering service level goal of answering 80% of
5 incoming calls within 30 seconds consistent and within
6 industry standards?
7 A.Yes. When looking at yearly averages, the
8 Company has met its goal in each of the last four years.
9 However, when looking at its month to month performance,
10 Idaho Power failed to meet its goal in three months
11 between July 2007 and July 2008.
12 Q.Are you concerned about the failures to meet its
13 goal?
14 A.No. It appears that failures were isolated
15 instances. The worst performance was in July 2007 when
16 the service level dropped to 67.9%. The Company
17 attributed this low service level to having six unfilled
18 positions in its Customer Service Center, which is 11% of
19 the total customer service representative staff. Those
20 positions were filled and the new representatives were
21 answering telephones by the following month. In August
22 2007, the service level rose to 81.04%. The Consumer
23 Assistance Staff has not received complaints from
24 customers who report that they are unable to reach the
25 Company by telephone due to long hold times, busy signals,
CASE NO. IPC-E-08-10
10/24/08 PARKER, M. (Di) 6
STAFF
1 no answers, or being told to call back later due to high
2 call volumes.
3 Q.Are there any other factors to consider when
4 analyzing the Company's service level?
5 A.Yes. Since the implementation of the
6 Interactive Voice Response Unit (IVRU) and the online
7 customer service that is available through Idaho Power's
8 Website, many customers now have instant access to the
9 information they need either by telephone or the Internet
10 without the need to wait on hold to speak to a live
11 customer service representative.
12 Q. What about customers with outages or emergencies
13 to report? How are those calls handled?
14 A. Customers with emergencies are not handled in
15 the same way that a customer who wants to sign up for
16 service would be handled. When a customer calls Idaho
17 Power, the customer is connected to an automated system,
18 the IVRU, that asks the caller to say one of the following
19 options: "Outage"; "Residential Services"; "Irrigation or
20 Commercial"; "New Construction"; or "Electrician". When a
21 customer says "Outage", the caller is first told that if
22 there is an emergency, the caller should hang up and call
23 911. If the caller stays on the line, the caller is
24 directed to state the city he or she is in. At that
25 point, the automated system looks for an outage in that
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 7
STAFF
1 ci ty. If there is an outage, a recorded message provides
2 details regarding any known outages. If the automated
3 system does not find any outages logged, the caller is
4 advised to stay on the line so that the caller can report
6
5 an outage to a representative.
Q.Has Idaho Power made any investments in
7 technology to improve customer service in outage
9
8 situations?
A.Yes. The Company has made significant
11
10 investments in its Outage Management System.
Q.What were your observations regarding Idaho
13
12 Power's Outage Management System?
A.Idaho Power's Outage Management System is now
14 connected to its IVRU. One of the most important benefits
15 of the two systems being linked is the ability of the
16 Company to reduce the number of employees needed to answer
17 incoming telephone calls during outages.
18 In an effort to further improve customer service
19 during emergencies and outages, Idaho Power relocated its
20 Outage Management Department to the same facility as the
21 Customer Service Center last year. Two specially-trained
22 customer service representatives are always located within
23 the Outage Management Center. This allows the Outage
24 Management employees to concentrate on the coordination of
25 communications with its dispatched employees in the field
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 8
STAFF
1 to resolve emergencies and incidents and allows the
2 customer service center employees to work with the
4
3 incoming telephone calls and customer communications.
Q.Has Idaho Power recently improved any of its
6
5 existing technologies?
A.Yes. The Company made many improvements to its
7 Interactive Voice Response Unit (IVRU). One of the
8 improvements resulted from Idaho Power's internal tracking
9 of complaints registered with its own customer service
10 representatives. Customers complained about being unable
11 to figure out how to speak with a live representative.
12 Idaho Power added an option for customers who select
13 "Residential Services" on the IVRU to speak in person to a
14 customer service representative. In spite of the fact
15 that more and more customers are choosing not to speak
16 with a live customer service representative, Idaho Power
17 accommodated those customers who are still uncomfortable
18 with new technologies; this particularly helps elderly and
19 some physically challenged customers.
20 Q.Do Idaho Power's notices, bills, and written
22
21 information required by the Commission's Utility Customer
23
24
25
Relations Rules (UCRR)comply with these rules?
A.Yes.I reviewed the documents in September 2008
and found the Company to be in compliance.
Q.In 2008,a provision was added in the UCRR
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 9
STAFF
1 203.03 that states "utilities shall implement procedures
2 designed to monitor and identify customers who may be
3 billed under an inappropriate tariff schedule." Has Idaho
4 Power implemented procedures to be in compliance with this
6
5 new provision?
A.Yes. According to Idaho Power, its Customer
7 Information System monitors accounts to ensure a customer
8 is billed under the appropriate rate schedule. When usage
9 occurs outside rate qualification rules for a particular
10 rate schedule, the account is routed to a customer service
11 representative for a manual review.
13
12 CONVNIENCE FEES
Q.Pursuant to UCRR 403, did the Commission review
14 Idaho Power's written record of its complaints and
16
15 requests for conferences?
A.Yes, I reviewed the Company's records for 2007.
17 These records consist of complaints and requests received
18 by the Company directly and are in addition to those
19 complaints referred to the Company by the Commission. I
20 noted in my review that 10% of these complaints (115) were
21 from customers who were unhappy with the convenience fees
22 required to pay their Idaho Power bill over the telephone
23 with a credit or debit card or check-by-phone. The
24 current charge is $2.85 for a payment of up to $300.00.
25 For example, if a customer calls to pay a bill that is
CASE NO. IPC-E-08-I0
10/24/08
PARKER, M. (Di) 10
STAFF
1 $305, the customer is required to pay two convenience
2 fees: $2.85 for the first $300 and an additional $2.85
3 for the remaining $5.00 for a total of $5.70 to .pay one
4 bill. As monthly billing amounts have risen, and more
5 customers pay past due bills that have accumulated over
6 time, customers have exceeded the $300 ceiling with
7 increasing frequency.
8 Q.Did Idaho Power take any action to address this
9 issue?
10 A.Yes. Idaho Power negotiated with a new vendor
11 that charges a $2.50 convenience fee. Additionally, the
12 minimum dollar amount per transaction will rise to $500.
13 The new vendor will begin processing Idaho Power's credit
14 card, debit card, and check-by-phone payments in January
15 2009.
16 Q.Do you have an opinion about Convenience Fees?
17 A.Yes. When regulated energy utility companies in
18 Idaho began to address customer requests for more options
19 to pay bills, many of the companies, including Idaho
20 Power, responded by adding the ability to pay bills over
21 the telephone and online. Because relatively few
22 customers used the new conveniences several years ago, the
23 decision was made by the utilities that customers who used
24 the services should pay for the services through
25 individual transaction fees, called "convenience fees."
CASE NO. IPC-E-08-1010/24/08 PARKER, M. (Di) 11
STAFF
1 At the time when convenience fees were first implemented,
2 it seemed logical that those costs created by a few
3 customers should not be passed on to all ratepayers.
4 There was not a sufficient volume of transactions to
5 enable the Company to negotiate fees with the vendors or
6 offer the service without charge to customers. However,
7 the number of transactions using this method of paying
8 bills has grown from 47,713 in 2003 to 186,435 in 2007.
9 Gi ven the fact that the total number of transactions is
10 growing rapidly (nearly four times as many transactions
11 occurred in 2007 than in 2003), it is very apparent that
12 it is no longer just a few customers using the telephone
13 to pay their bills. The ability of customers to pay over
14 the telephone saves the Company money when customers use
15 this service to avoid being turned off for non-payment of
16 their account. The savings come from the Company not
17 being required to send a meter technician to the
18 customer's home to disconnect and subsequently reconnect
19 service. Although I have concerns about convenience fees,
20 particularly with respect to the impact on low income
21 customers and customers who are having trouble paying
22 their Idaho Power bills, more study is necessary before I
23 can make a recommendation about reducing or eliminating
24 these fees. At this time, I recommend that the Company
25 explore alternatives to requiring customers to pay
CASE NO. IPC-E-08-10
10/24/08 PARKER, M . (D i) 12
STAFF
1 convenience fees and report its findings to the Commission
2 Staff.
3 IRRIGATION DEPOSITS
4 Q.In the last few years, Idaho Power changed its
5 tariffs regarding when and how deposits are collected from
6 its irrigation customers. What were the primary changes
7 that Idaho Power made to its irrigation deposit collection
8 procedures?
9 A.Idaho Power created two new methodologies for
10 the collection of deposits from its irrigation customers.
11 The first formula is entitled "Tier One" and was created
12 in 2002 and the second is entitled "Tier Two" and was
13 created and added in 2004. The primary changes were that
14 the Company now: 1) uses the number of reminder notices
15 rather than late payments the customer received in the
16 previous twelve months as the determining factor in
17 assessing a deposit; 2) ties the amount of the deposit to
18 the electrical characteristics of the pump and motor
19 rather than the pump usage history from the previous year;
20 and, 3) assesses the higher Tier Two deposit if the
21 customer has an outstanding balance greater than $1000.00
22 on December 31 during any of the previous four years.
23 Q.Since Idaho Power changed its deposit collection
24 procedures for irrigation customers, has the Commission
25 received any complaints from irrigators?
CASE NO. IPC-E-08-10
10/24/08 PARKER, M. (D i) 13
STAFF
1 A.Yes. The Commission has received seven
3
2 complaints from irrigators.
Q.What were the most significant issues voiced by
5
4 those complainants?
A.Two of the most recent complaints from
6 irrigators said they did not feel they had been adequately
8
7 informed of the new deposit collection procedures.
9
Q.Do you concur with the complainants' concerns?
A.Yes. My investigation revealed that irrigation
10 customers have not been provided with detailed written
11 information regarding the Company's more stringent deposit
12 policy since May of 2005.
13 Staff reviewed copies of payment reminder
14 notices sent to irrigators and found them to be
15 inadequate. The notices did not make irrigation customers
16 aware of the deposit policy and so customers were not able
17 to avoid having to pay a deposit by altering thir payment
18 habits.
19 Q.Was Idaho Power responsive to the issues
21
20 mentioned above when brought to its attention?
A.Yes. Once the Company was aware of Staff's
22 concerns, it began to work immediately with Staff to re-
23 write its reminder notices. For example, wording was
24 added to reminder notices so that the consequences of
25 receiving two reminder notices in twelve months were
CASE NO. IPC-E-08~1010/24/08 PARKER, M. (Di) 14
STAFF
1 clearly stated. The Company also agreed to revise its
2 bill statement to include information on its deposit
3 policy. An annual brochure sent to irrigation customers
4 will be revised in time for next year's mailing. The
5 brochure will describe in detail the Tier One and Tier Two
7
6 deposit policy.
Q.The reason Idaho Power changed its irrigation
8 deposit structure was to reduce uncollectible and written-
10
9 off irrigation account balances. Has the goal been met?
A.Reports from the Company show favorable results.
11 The Company reported to Staff that when comparing 2007
12 with 2003, there had been a 73 percent reduction in past
13 due irrigation account balances and a 93 percent reduction
15
14 in irrigation account written off amounts.
Q.Does this conclude your direct testimony in this
17
16 proceeding?
18
19
20
21
22
23
24
25
A.Yes, it does.
CASE NO. IPC-E-08-10
10/24/08 PARKER, M . (D i) 15
STAFF
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UO~Q...c:-z..1I Exhí6H No: 147
Case No. IPC-E-08-10
M. Parker, Staff
10/24/08
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 24TH DAY OF OCTOBER 2008,
SERVED THE FOREGOING DIRECT TESTIMONY OF MARILYN PARKER, IN
CASE NO. IPC-E-08-10, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
BARTON L KLINE
LISA D NORDSTROM
DONOV AN E WALKER
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: bkline(iidahopower.com
lnordstrom(iidahopower .com
dwalker(iidahopower .com
PETER J RICHARDSON
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(irichardsonandoleary.com
RANDALL C BUDGE
ERIC LOLSEN
RACINE OLSON NYE ET AL
PO BOX 1391
POCATELLO ID 83204-1391
E-MAIL: rcb(iracinelaw.net
elo(iracinelaw.net
MICHAEL L KURTZ ESQ
KURT J BOEHM ESQ
BOEHM KURTZ & LOWRY
36 E SEVENTH ST STE 1510
CINCINATI OH 45202
E-MAIL: mkurz(iBKLlawfrm.com
kboehm(fBKLlawfirm.com
BRAD MPURDY
ATTORNEY AT LAW
2019 N 17TH ST
BOISE ID 83702
E-MAIL: bmpurdy(fhotmail.com
JOHNRGALE
VP - REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707.0070
E-MAIL: rgale(iidahopower.com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL: dreading(imindspring.com
ANTHONY Y ANKEL
29814 LAK ROAD
BAY VILLAGE OH 44140
E-MAIL: yankel(iattbi.com
KEVIN HIGGINS
ENERGY STRATEGIES LLC
PARKS IDE TOWERS
215 S STATE ST STE 200
SALT LAKE CITY UT 84111
E-MAIL: khiggins(fenergystrat.com
LOTH COOKE
ARTHUR PERRY BRUDER
UNITED STATE DEPT OF ENERGY
1000 INDEPENDENCE AVE SW
WASHINGTON DC 20585
E-MAIL: lot.cooke(fhq.doe.gov
arhur. bruder(ihg .doe. gOY
CERTIFICATE OF SERVICE
DWIGHT ETHERIDGE
EXETER ASSOCIATES INC
5565 STERRTT PLACE, SUITE 310
COLUMBIA MD 21044
E-MAIL: detheridge(iexeterassociates.com
DENNIS E PESEAU, Ph.D.
UTILITY RESOURCES INC
1500 LIBERTY STREET SE, SUITE 250
SALEM OR 97302
E-MAIL: dpeseau(iexcite.com
CONLEY E WARD
MICHAEL C CREAMER
GIVENS PURSLEY LLP
601 WBANNOCKST
PO BOX 2720
BOISE ID 83701-2720
E-MAIL: cew(igivenspursley.com
KEN MILLER
CLEAN ENERGY PROGRAM DIRECTOR
SNAKE RIVER ALLIANCE
PO BOX 1731
BOISE ID 83701
E-MAIL: kmiler(isnakeriverallance.org
SECi&~--
CERTIFICATE OF SERVICE