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HomeMy WebLinkAbout19901025.docx Minutes of Decision Meeting October 25, 1990 - 9:30 a.m. In attendance: Commissioners Joe Miller, Perry Swisher and Ralph Nelson; staff members Mike Gilmore, Marsha Smith, Lori Mann, Tonya Clark, Gary Richardson, Jack Taylor, Don Howell, Bob Smith, Bev Barker, Belinda Anderson, Lynn Anderson, Stephanie Miller, Randy Lobb, Syd Lansing, Bill Eastlake, Birdelle Brown, Madonna Faunce, Dave Hattaway and Myrna Walters. Items from the October 25, 1990 Agenda were discussed as follows. 2.  Mike Gilmore's October 18, 1990 Decision Memorandum re:  Petition of New Plymouth Residents for EAS to Ontario-Case No. MTB-T-90-7. Commissioner Miller asked what the Oregon rule is on funding EAS? Mike Gilmore said you stick it to the customers in the affected area only.  They don't spread it out. Commissioner Nelson asked about the history of EAS to Ontario. Lynn Anderson said it has been in existence for a longtime. Birdelle Brown reviewed her memo on EAS. Commissioner Nelson spoke to the closeness of New Plymouth to Ontario. Commissioner Swisher said Ontario is the trade center of that area.  In any event, think Malheur would be surprised.  Oregon now has a Commission. Marsha Smith asked if it would affect interstate traffic? Commissioner Swisher said he thinks the subject should be opened up with the Oregon Commission.  Think that is the appropriate way to handle it.  Agree it shouldn't be one-way EAS. Mike Gilmore asked if it should be done with a letter to the Oregon Commission. Commissioner Nelson suggested sending the petition to Oregon (perhaps opening a docket).  Ask them if they will consider it.  Am willing to open case here. -2- Commissioner Miller said had it not been for the number of signatures, would have considered it marginal.  Am willing to look at it.  Asked about call volume data? Birdelle Brown said there isn't any updated information. Commissioner Miller asked if there would be value to getting some more information? Mike Gilmore asked about getting calling data. **Terri Carlock was in attendance at this time. Commissioner Swisher said he thought we should have that when Oregon is contacted. Commissioner Miller suggested inquiry to Oregon Commission and before that get updated traffic data or come to the conclusion that the '87 data is still reliable. Mike Gilmore is to work on a letter to the Oregon Commission inquiring about what their first impression would be. 3.  Lynn Anderson's October 22, 1990 Decision Memorandum re:  Request for Boundary Change between Arbon (Rockland Telephone) and Holbrook (Albion Telephone) Exchanges. Commissioner Miller asked what the companies think? Lynn Anderson said they are opposed. Commissioner Swisher asked Lynn Anderson what his attitude was? Lynn Anderson said it is already sparsely populated.  One thing that bothers him is - Mrs. Tubbs was asked to get together a petition.  There has been no petition. Commissioner Nelson asked if we know what Mrs. Tubbs' telephone bill runs? Lynn Anderson said he thought $20 a month. Commissioner Swisher said he thinks you live where you live unless it is outrageous. Commissioner Miller asked where the boundary was?  Said it hasn't been our practice to redefine boundaries to accommodate customers.  Asked if we know how many people are similarly situated? -3- Lynn Anderson said he didn't know. Commissioner Nelson said he thought it would be very difficult to move it.  It would take 8/10 customers. Request was denied. **Handle it by letter, not order. Commissioner Miller said we could treat it as a complaint and serve it on the companies. Decision was to leave a slight door open in the letter about filing a petition or demonstrating something else. Letter from Lynn Anderson - report that the commission considered the request at a decision meeting. 4.  Belinda Anderson's October 23, 1990 Decision Memorandum re:  Part One of Case No. GNR-T-90-6, Idaho Regional Exchange Carriers' Update for Intrastate Access Tariff. Commissioner Miller asked if General Telephone was the only intervenor? Belinda Anderson replied that they were.  Said this decision memorandum is Part 1 of 3 memos. Commissioner Miller asked about approving these piecemeal?  Asked about approving this but not doing an order? Don Howell asked if we knew what GTE's interest in this was? Commissioner Nelson said he would approve it with the comment that $5 will prevent slamming. Approved. 7.  Regulated Carrier Division Agenda dated October 25, 1990. Approved. 5.  Terri Carlock's October 24, 1990 Decision Memorandum re:  Silver Star Telephone REA Loan Application, Case No. SIL-T-90-2. Terri Carlock said she asked company how it could be so much lower than '88. -4- Said company then found some work orders.  Said the borrowing was still figured correctly. Commissioner Swisher asked Randy Lobb what we did about Pallisades? Randy Lobb said the connection has been made to Idaho Falls.  Not sure about BETRS to Pallisades. Commissioner Miller asked if this made them all fiber? Randy Lobb said he thought they were fiber from Wayan. Commissioner Miller asked where they are on single party? Lynn Anderson said they are all single party. Terri Carlock said it was audit adjustments suggested by the accountant. Mike Gilmore said Commission always put in boiler plate about investment.  Do you want to put language in about the expenditure for cable? Commissioner Swisher said he thought not since these were all things we asked them to do. Commissioner Miller said to just approve it. Agreed. 6.  Lori Mann's October 24, 1990 Decision Memorandum re:  Transport Motor Line, Inc.; Case No. M-7639-2. Lynn Anderson said applicant has asked for a week extension.  Then staff would like 21 + 7. Commissioner Nelson asked what was different about this? Tonya Clark said this is the fourth time he has had permits. After brief discussion, extension was granted. 1.  Lori Mann's October 16, 1990 Decision Memorandum re:  Boise Water's Application for a Rate Increase, Case No. BOI-W-90-1; and Lori Mann's October 19, 1990 Decision Memorandum - same case. Commissioner Swisher said first decision is AM/FM. -5- Commissioner Nelson said he thought it was interesting that both Idaho Power and Intermountain Gas have put money in a similar system. Lori Mann said they did not sign up for it.  They were just part of the committee. Commissioner Swisher said what he can't figure out is:  The way this is organized, if we allowed into ratebase the capital investment in the system, in operating, if we allowed that, would the ratepayers then enjoy part of the proceeds from the operation of the system as the other entities use it?  The others have to pay? Dave Hattaway said if we allow it in ratebase, they will enjoy some benefits but as other people hook on, no benefits come back to Boise Water. Commissioner Nelson asked if we couldn't impute something? Commissioner Swisher said over the long pull it is something everyone would use that has to know where things are.  Is our authority broad enough to say we will put this into ratebase but if we do we do it for Boise Water? Commissioner Nelson said we expect the benefits to flow back.. Mike Gilmore said they can divert them to another entity. Commissioner Nelson said in this case the company is using this asset in the business. Commissioner Swisher said he thought taking that action saves us a lot of agony.  We can go with Hattaway or company.  In reality, don't tend to agree with either one of them.  If we take a look at it, need to be an accountant. Commissioner Nelson said he is torn by the fact that it is a good system and it should be cost-effective today; if we can do that by saying the benefits that flow back from this subsidiary accrue to the corporation. Commissioner Swisher gave example of low pressure in north end.  This equipment, the way they use this system, is improving their work on how they interconnect their mains and laterals.  Had a chance to see how well this system works. -6- Commissioner Miller said he feels basically the way the other commissioners feel.  It is beneficial, and shouldn't be tied to an antiquated system but Dave Hattaway does make a point that from an accountant's point of view it is difficult to quantify the cost savings and make this pencil out on a cost benefit basis.  On the one hand you have a generalized belief it is good and on the other hand there are Dave Hattaway's numbers - don't know how to handle that. Commissioner Nelson said as you look back over the last three years they bought it at the right time.  As their system expanded, the mapping system came in at a good time.  Guess you have to go with a little faith that there are benefits down the line that are not quantified. Mike Gilmore said when you are talking imputed revenues, that would be the next rate case. Discussed conversion costs - page 6 of the decision memo. Commissioner Nelson said he thought depreciation time should be extended. Dave Hattaway said there are two ways of having data on the screen.  Boise Water's is a vector system. Discussed 10-year life. Commissioner Swisher asked if others who use this base system get the benefit from the conversion? Dave Hattaway gave the history.  Discussed the four surviving entities.  GGI maintains the data base. Commissioner Miller asked about putting it into ratebase but making a productivity adjustment. Mike Gilmore said it is the same kind of thing we do in electricity. Page 8. Could cut that by $30,000 going to 10 year ($89,500). Commissioner Swisher asked if this mapping system makes it easier or harder when new subdivisions come on? Dave Hattaway said if it is all in place, company can use it to make some independent decisions on the system. -7- Commissioner Swisher said after the amortization adjustment he doesn't have a problem with the cost. Commissioner Miller asked Stephanie Miller - we don't think the investment was imprudent but only want to allow the amount that is a benefit? Stephanie Miller said it is going into ratebase at 1/12th or 2/12ths.  Asked when the mapping system went in? Dave Hattaway said in December. Stephanie Miller said it didn't go in at the first of the averaged year.  They used average ratebase but it is only 1/12th. Commissioner Miller asked what we were fighting about? Commissioner Swisher said the company wants it in as a known and measurable. Terri Carlock said they are not sure you can do this on an ongoing basis.  They could not quantify and document that. Commissioner Nelson said that by the time they come in again in two years, they would have time to quantify on failure to quantify benefits associated with it. Commissioner Swisher said so if we make the decision based on test year, thought we were being asked to make that decision. Commissioner Nelson said in general we are going to support the technologic changes. Mike Gilmore said you will leave in 1/12th. Dave Hattaway said they have argued heavily that this takes 2 people and it will save labor costs. Commissioner Swisher asked if staff thinks Commission should say when we asked them questions about what it could or couldn't do, staff had already asked that. Page 10 of Decision Memorandum - There will be additional costs. Commissioner Swisher said his initial reaction was why didn't they come in to discuss this.  Decided to do it themselves and kept their costs down. -8- Dave Hattaway said he had concerns about setting precedent.  There are flaws in the project management that staff would like to see avoided.  Would like to see some timing schedules, some conversion tables, etc. **Commissioner Swisher said lets take the language on Page 10.  Direct them to see as these and other components of the data base are added to the system, that the cost of doing it and related benefits should be quantified. Staff wants review capability. Terri Carlock said you are saying these expenses should be quantified and they should be brought to the staff on a regular basis? Stephanie Miller said question was that it was payment to a company subsidiary.  Asked if they would have spent that money with just anyone? Commissioner Swisher said Commission wants to make sure that it is Boise Water that makes the decisions as to how these things are done and not have those decisions made by GGI. We are clear that the basic decisions were not made by Boise Water.  By not having come to the Commission with those things, those things that would safeguard the ratepayers were not reviewed.  Decisions were made in places where we don't know. Commissioner Miller said it points out the deficiency in the statute about affiliate companies.  Thought this should be boilerplate in the order as an affiliate transaction. Mike Gilmore said he would make the lead in, language from the '78 and '80 Boise Water cases. Commissioner Miller said 1-12th is okay to be in investment now but they have the burden. Dave Hattaway said as he looked at this, AM/FM is a good investment but the flip side is there are big dollars invested in the system.  If U S West decides to go into AM/FM system it would be 100% of hundreds of dollars. Commissioner Swisher suggested saying this works for a utility with a concentrated group of ratepayers - in a municipality.  Extension of the same technology to other utilities (the approval) wouldn't be seen as an investment -9- by other utilities because the cost of this kind of a system over a sparcely-populated utility, it is not a given that it makes sense. Commissioner Miller said the services are generally beneficial but if they are provided by an affiliate company then they have the burden of justification. Terri Carlock said problem is that the company has not quantified the benefits. Commissioner Miller said if the software is provided by an affiliate you have to do that.  Another way to go with this is since it is only 1-12th, disallow it and let them try to prove it next time. Commissioner Swisher said he thought they would go up on that issue. Commissioner Nelson said he would just as soon say that generally he would be in favor of the technological improvements that company cost-justified, want to see the justification when the other 11-12ths come in. Terri Carlock said she thinks they can justify it. Commissioner Miller suggested denying it and they can petition for reconsideration and we can take further testimony on justifying that. Terri Carlock said she thought they could justify 1-12th. Commissioner Nelson said he would rather approve it but tell them we expect justification on the other 11-12ths. Commissioner Swisher spoke to Exhibit 26. Commissioner Miller asked about going on and coming back to this issue.  Said he would like to hold this. Went to Page 16 of Decision Memorandum - Inflation. Commissioner Nelson said he thought rapid growth has taken care of inflation. Commissioner Swisher said when things started picking up, they should have come in. **We are not a reactive agency, why didn't they come in when growth was happening. -10- Rate Case Amortization. Commissioner Nelson said he would go with the Company. Commissioner Miller said it looks like no matter what we do with AM/FM they will be back. Commissioner Swisher suggested going with 3 years. Commissioner Nelson said he would go with 3. Commissioner Miller agreed. Meeting was adjourned - to be reconvened at 10:00 a.m., October 26, 1990.         DATED at Boise, Idaho this       day of January, 1991.                           PRESIDENT                           COMMISSIONER                           COMMISSIONER ATTEST:                               Commission Secretary mjw 0001M