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HomeMy WebLinkAbout19901217.docx Minutes of Decision Meeting December 17, 1990 - 1:45 p.m. In attendance: Commissioner Joe Miller, Perry Swisher and Ralph Nelson; staff members Mike Gilmore, Brad Purdy, Terri Carlock, Keith Hessing, Bob Smith, Dave Schunke, Belinda Anderson, Birdelle Brown, Gary Richardson, Stephanie Miller, Don Oliason and Myrna Walters. Items from the December 17, 1990 Agenda were discussed as follows. 2.  Lynn Anderson's December 7, 1990 Decision Memorandum re:  Potlatch Telephone Company's Certificate and Exchange Maps, Case No. POT-T-90-1. Approved. 13. Terri Carlock's December 14, 1990 Decision Memorandum re:  PacifiCorp Debt Issuance Amendment - Case No. PPL-E-88-3 and 14.  Terri Carlock's December 14, 1990 Decision Memorandum re:  PacifiCorp Pollution Control Refunding - Case No. PAC-S-90-4. Approved both financings. 3.  Brad Purdy's December 6, 1990 Decision Memorandum re:  UPL-E-90-1. Commissioner Nelson said beginning with the issues set out in Commissioner Miller's December 17, 1990 Memorandum, 1.  Thought the 1CP study was of no value. Other commissioners agreed. Next question was:  Should the Nu-west load be normalized? Commissioner Swisher said it was not an up and down question to him.  Thought both sides were trying to make it an either up or down question and they were wrong.   Commissioner Nelson said he thought there was a pretty strong case that they would be down 50% of the time.  Their being down will determine the peak time. Commissioner Swisher said every day in August when the dispatchers go to work has a potential of a down time. -2- Commissioner Miller said Dave Schunke's approach was a little different than company's.  He deducted 15 days.  Tried to strike a balance.  His goes halfway between company's normalized and actual. Commissioner Nelson said it was hard to just take a cost of service. Dave Schunke explained what he did.  Said September normalization wasn't as hotly contested. Commissioner Swisher asked what Dave Schunke said about Page 27, last paragraph of the Decision Memorandum.  Asked what he did with capacity costs in his calculation? Dave Schunke said it was 75/25.  Didn't really make any recommendation about this.  His preferred method was 12 CP. Commissioner Nelson said he thinks we agree on Nu-West.  It is going to be contributing to the peak about half the time in August. Commissioner Miller repeated Dave Schunke's recommendation. Dave Schunke said in September it is an average load.  Don't think that was disputed except in the final minutes of the hearing.  Conley Ward thought there should be adjustment for revenues.  Filed a late-filed exhibit making that adjustment.  He didn't dispute that and neither did the company.  Would characterize the September normalization as dispute with Conley Ward's recommendation.  Exhibit F is a company-run exhibit.  Has Dave Schunke's adjustment and Conley Ward's recommendation on taxes. Keith Hessing said it appears that only the 12 was done on this. Commissioner Miller asked if commissioners basically agreed with Dave Schunke on September revenue?   All three commissioners concurred. Question 3 - Is a 12CP method for allocating generation capacity costs preferable to an 8CP method? Commissioner Miller said he was never sure on Peseau's criticism that 12 CP was contrary to PURPA and that 8CP is more PURPA-oriented.  Asked what that argument was about? -3- Dave Schunke said that wasn't so much between 12 and 8.  Criticism was 12 versus loss of load probability.  12CP is conventional... and that PURPA brought us into the age where we should be looking at marginal pricing. Commissioner Miller said then what is the argument - 8 versus 12? Dave Schunke said Peseau's argument for 12 weights it all the same and says that is not appropriate.  Peaks in some months are higher than other months.  We both agree that peaks are larger in some months than others and there are other things you should look at so he weights different months differently.   Agree things ought to be weighted but think you should look at more than loss of our probability.  Didn't have the data to quantify it and was relying on other studies to make his recommendation that if you look at other weightings that what you come up with is that all the months are the same.  Company came to that conclusion. Commissioner Miller recited Dave Schunke's testimony on this. Dave Schunke said if you only look at demand, the lowest month is still 75% of the peak month. Commissioner Swisher said his reaction to Peseau's testimony was it was good but it is irrelevant to this utility.  Didn't have much to do with the southern slope of Idaho.  We treated it as freestanding, not dispatched out of Portland.  UP&L serves area in Idaho which does not fit Peseau's  testimony.  There is not enough variation there to justify the elimination of the shoulder months.  Using 12CP pragmatically was the sensible thing to do. Mike Gilmore said if you buying and selling all the time, it wouldn't make sense to use the policy of how a stand-alone utility would act. Commissioner Nelson said he accepts what Dave Schunke says about the scheduling of downtime for maintenance. Commissioner Swisher said while you can schedule your downtime for maintenance, that is the period of time in which everything in the southwest is available.  Some hydro is also available from someone.  Thought why not go with the 12. -4- Commissioner Nelson said in March and April there is a lot of hydro available or should be. Commissioner Swisher said March is a winter month on this system. Commissioner Miller said the difference between the two is quite small. Dave Schunke said difference is very small and the only difference worth fighting for is for Nu-West.  On 12CP they get a greater allocation. Commissioner Miller said irrigators make it up in their distribution. Dave Schunke said the difference on the irrigators is a half of 1%.  When you are talking about less than a percentage point, think they should be equal.  Realistically the 8 or 12 is about the same to the irrigators. Commissioner Swisher said he thought what commissioners heard was there is not justification for 8.  Wouldn't even do it on Idaho Power.  (Idaho Power is weighted 12CP). Commissioner Miller said he likes 12.  Leaving 4 months out when all the months are so close together does reflect how the system works.     Commissioner Nelson asked if commissioners use 12, how is the weighting different from the '265 case. Keith Hessing explained how IPC did it.  They had 4 season numbers.  Did those based on the cost of new resources.  Recognized a difference in cost for different seasons.  If it existed here it is a lot harder.  Didn't get those kinds of numbers. Commissioner Nelson said in terms of their own generation they have hydro generation available. Commissioner Miller said ultimately what Dave Schunke does is create an average. Was persuaded you don't want to do an average of all of them but could take average of study for 8 and 12, ... 5.56 would be the rate of return for Nu-West. Dave Schunke made the argument for 12CP, but either way it is almost the same for the customers.  Independent of 8 or 12, rates don't change a whole lot.  Nu-West is the exception.  It might be more correct to pick something there. -5- Proposal is to take the 12 and 8, average it and divide it by 2. Commissioner Nelson asked how much Nu-West's was with normalization on 12CP? Dave Schunke said his exhibit is the target rate, in the Tariff 27 rate there is not a direct correlation.  On Exhibit 109 it is Nu-West at the Tariff 27 rate.  (3.00 rather than 4.26)  Their rate of return drops a bit when you normalize. Commissioner Nelson said that moves them further from an acceptable rate of return when you normalize. Commissioner Miller said 12CP shows them contributing less.  That justifies us staying on target for contract rate. Two votes for 12. Commissioner Nelson said it looks like we are penalizing Nu-West for constant use all year round. Dave Schunke said you build the system to meet peak but you have to build it to provide sufficient capacity to run the system.  They started out as a valuable customer. Commissioner Nelson said its going to make a big difference between 3% and 6% return. **Will hold on Question No. 3 for now. Commissioner Nelson said he didn't have a problem in an overview theory with 12CP because he accepted Dave Schunke's presentation.  But when you see how that affects the customer who has steady demand all year as opposed to part-time contributing to a peak and would show up heavy in less than 12CP.   Commissioner Swisher said if Commissioner Nelson would accept Commissioner Miller's proposal he would go with that.  Think we would have consensus then. Dave Schunke said the Nu-West target rate falls out ... these are directly tied together. Commissioner Nelson said in his mind he has a problem with where the figures move over under the 12CP. -6- Commissioner Miller said this is generation capacity.  If you look at all the costs, the larger industrial customers are getting a better deal. Question No. 4 - Should the calculation of the irrigation interruptibility be based on 1988 data? Commissioner Swisher said it was okay on the isolated question. Commissioner Nelson said he thought irrigators objected to that. Dave Schunke said no, that was the irrigators proposal.  Thought it was more representative of a typical year. Keith Hessing said they prorated it on the same percentage the load was in '88.  They did some averaging. Dave Schunke said the numbers that came out of '88 formed the ratio.  It is the ratio, not the numbers. 5.  What percentage of curtailment should be assumed in calculating the interruptibility credit? Commissioners Miller said company assumed 40.  It is sort of pick a number.  Then they want the 50 (Nu-West) Commissioner Swisher said that is ridiculous. 89% are on B and C. Commissioner Nelson suggested going with 40. **Decision was to stick with 40. **Commissioner Swisher said he may write a separate concurrence on this.  There were two major changes (Schedule C and time-of-day).  Company's revenues from Idaho jurisdiction is because of those two shifts.  We didn't even discuss those. 6.  Should 1988 Test Year be used for measurement of irrigation demand?  (Page 19 of Decision Memo) Commissioner Miller asked Keith Hessing if he was thinking wrong about this? Keith Hessing said if you accept that you have to accept that there have not been any long term changes in the system.  If you accept the 6 years, you say it is insignificant. -7- Commissioner Swisher said '88 was year of over $5 return for potatoes.  They had high acreage of potatoes.  Price has now gone down.  The treatment of '88 was 't because of weather but economic choices (to raise potatoes).  It was an economic decision. Commissioner Miller said so you would stick with single year? Commissioner Swisher said yes. Dave Schunke said he thought 6 years was too long.  Was not opposed to taking 2/3 years of averaging.  It would make sense to do some averaging but what bothered him particularly was they made the proposal to average the load and overlooked the revenue average all together. Commissioner Miller said he didn't see how we can noramalize and not make revenue adjustment. Commissioner Swisher said in a given year the '88 load is potential. Commissioner Nelson said he could go with just '88. Other commissioners concurred. Questions 7, 8 and 9.   Commissioner Miller said staff didn't take a position so asked Dave Schunke about these? Dave Schunke said this is a new approach by the company.  It first claims it has appeal, but think the flaws, thought the irrigators' arguments were somewhat persuasive about the substations.  Think it has some problems.  Didn't feel strongly one way or another. Commissioner Nelson asked how it was different? Dave Schunke explained that in effect it says lets look at the demands of substation number (how many they had) and they look at how those demands coincide with end users ... it is not tied specifically to a substation, it is just the number of substations.  If 10 peaked in August, then 1/10the of your cost would be allocate to that month. Keith Hessing explained the weighting factor. -8- Commissioner Miller said from a non-technical point, think the system is built for irrigators. Dave Schunke said he thought it reflected exactly what has happened.  There were whole substations that had no load in the winter.  If you have a substation that just serves irrigators, could allocate those costs to that class.  It is very receptive to that particular thing. Commissioner Nelson said he thought it was a reasonable method.  Those substations used by irrigators, irrigators are being charged for them. Commissioner Swisher said he thought there was confusion about what happens in Idaho versus Utah.  In Idaho the irrigation load shares with the residential load. Keith Hessing said:  irrigation is 50% in Idaho and 1% in Utah. Commissioner Miller asked about their distribution system approved in Utah?  Said he had a problem getting a grip on this distribution issue. Dave Schunke said it is commendable that they are looking at it but it has some flaws.  It was designed for Utah customers in Idaho.  The systems are so different. Commissioner Miller asked where we would be if we didn't accept company's method? Dave Schunke said we would fall back on non-coincidental peak.  You can built your own menu anyway you want. Commissioner Miller said for the substations, the company used the 12 weighted. Dave Schunke explained what it is. Commissioner Miller said we could use:  weighted non-coincident peaks? Said so you could take 12CP method and combine it with the non-coincident peak method in distribution and secondary lines? Dave Schunke said yes. Commissioner Miller said to do that and see where we come out. Agreed. -9- 11.  Should a loss of load hours probability study be used to allocate capacity costs? Page 28 of Decision Memorandum. Commissioner Miller asked about this? Commissioner Nelson said he thought he would be more accepting of the 12CP if we had the loss of load in a study. Commissioner Swisher said we didn't have one. Commissioner Miller said the information we have in the case wouldn't let us say what the number is so we have to work at it.  Don't see how we can come up with a number. Dave Schunke spoke to major customer changes that weren't there 10 years ago.  Change in irrigation.  Generation isn't the same, isn't the same company.  Don't know how you could adjust that study to come up 10 years. Commissioner Nelson said he thought experts could differ on the interpretation. Commissioner Miller said he wondered if we want to say this, but in his mind the average of the 12 and 8 makes up for the fact that we can't do loss of hour probability because of lack of data.   Other commissioners agreed.  Thought it could be mentioned as an aside.  Be very clear that we don't have what we need to use the loss of load well. Mike Gilmore suggested to okay big changes. Keith Hessing asked if you ought to speak to this as only a "loss of load hour question"? Commissioner Swisher said this is not a secondary dispatch company. Keith Hessing said there are other measures  to get at the system's reliability.  Do you want to zero in on loss of load hours? Commissioner Miller thought that only loss of load hours should be quantified. -10- Dave Schunke said Keith Hessing's only concern was that in the future it would look like commissioners were pre-designed...on loss of load hour probability. Commissioner Miller explained how it should be worded.  Think one of the purposes of this case was to get a Utah Power stand-alone cost of service identified in our minds so that going forward we can see what it is doing to costs.   It may be that we are setting rates on assumptions that are not quite true. 12. Is the UPL/PPL system integrated to extend cost of service decisions in this case should be based on a merged system theory or UPL stand alone? Decision was:  UPL stand alone. 13. Should energy cost allocators be based only on usage or should they also reflect the cost of energy at different times of the year? They were not quantified.  The computational method was not submitted. Dave Schunke explained the middle column on Exhibit 503.  Said the concept is fine but it is based on the '81 study.       Decision was:  can't go with that. Commissioner Swisher said he would be comfortable saying what we got was based on '81. Question 14 - Page 29 of Decision Memo. Commissioner Miller asked if it was off-system non-firm? Keith Hessing said yes, off-system.  Said company argued it has both components. Commissioner Nelson said he would go with the company on this. Dave Schunke said capacity had to be there to make the sale.  Even if there wasn't a specific capacity charge you could make the argument that capacity is a factor. Commissioner Swisher said he agreed you have to look at the system we are dealing with. -11- Commissioner Nelson said you would have a different argument on a non-hydro system. Answer to the question was yes. 15. Was unrebutted. Dave Schunke said he didn't have an opinion on it. Mike Gilmore said if you base it on income, you give them a double whammy. Stephanie Miller said you make it up if you bring them all to equal. Commissioner Nelson said people who are generating largest return are paying the most taxes. Stephanie Miller explained what Idaho Power does. Commissioner Swisher said it should be a factor to cause you to not do that. Commissioner Miller asked Stephanie Miller if there was a common precedent on this? Stephanie Miller said rate is what you pay taxes on and return is a function of the ratebase that is allocated to whatever you are allocating. Commissioner Swisher said it is better to do it on the rate. Stephanie Miller said the income would take into account the other tax benefits. Commissioner Swisher said it is better than ratebase itself. Stephanie Miller said ratebase goes into the calculation of the return. Commissioner Swisher said if he were Nu-West he wouldn't have used this argument. Commissioner Nelson suggested using the company's filing since it makes so little difference. Commissioner Miller said he thought those were the cost of service questions.  Asked if Commissioners had cost of service changes before them? -12- Dave Schunke said if Commissioners want to know they can look at Exhibit 5, Columns A and B and see where they are. **Went over Exhibit A. Commissioner Nelson spoke to the deviation theory. Commissioner Miller spoke to rates. Discussed Williams proposal. Exhibit 602 - Do you want to do the big problem here or do a little bit of all the problems? Dave Schunke said he thought there was a chance to do some realigning without too much pain to the customers. Commissioner Miller asked what about Commission saying we are going to solve this big problem in commercial classes but think in the next reduction case, commercial won't collect, will remedy residential? Other commissioners said they wouldn't say that. Dave Schunke said he thought the nice thing about commercial reduction is you still reach out to those way out of line by holding out on irrigators, don't commit to adjustment and can look at merged company.  May look better then. Commissioner Miller said perhaps a two-step approach would be the way to go.  Do the Ron Williams approach.  Then take Dave Schunke's recommendation and increase irrigators by 2% and then give that money...lower residential class. Commissioner Nelson said he would not want to go through that exercise. Commissioner Swisher said we don't know the total revenue numbers. Dave Schunke said the commercial class proposal will not bring them down to the 10% rate of return. Commissioner Miller said he would move the irrigators up. Commissioner Nelson said irrigators are the fartherest away from rate of return. -13- Commissioner Miller said he wondered if we want to talk about the problem of the irrigators' subsidy.  Say the trend is going to be toward elimination of the subsidy.  Think we will be more and more compelled to do it. Commissioner Swisher said he would go with the 1% and get rid of declining tailblock.  It also builds in bad irrigation practices. Commissioner Miller asked Commissioner Swisher if he would take the proposal and increase irrigators by 1% and take out tailblock? Commissioner said yes.  The front block would become the rate.  Said some movement has to start. Commissioner Nelson said he thought 2% - 2% would be 114the of what ought to be removed.  They should be removed 27%. Commissioner Miller asked what that would do in mills per kilowatt? Commissioner Swisher said 1% should be the limit. Discussed 1% elimination of the last tailblock.  2% would be 16 mills.  Discussed just eliminating the tailblock.  Reduces initial and raise the tail block to get a net 2%.  What would be the rate if you flattened it?  30% increase.  **Need calculation for 1% and 2%, what uniform flat rate would it take? Staff will work on those numbers. Adjourned at this time. RECONVENED AT 1:30 p.m., Tuesday, December 18, 1990. In attendance in addition to those at the December 17, 1990 Decision Meeting were:  Eileen Benner and Marsha Smith. Extra Item was discussed at this time - U. S. West's Petition for Time Extension in New Plymouth EAS case.  Granted the extension. Item 1 from 12-17-90 Agenda - Lynn Anderson's December 7, 1990 Decision Memorandum re:  GTE's Letter Withdrawing Advice No. 271(OPUS), Case No. GTE-T-89-5. -14- Will come back to this item. 8.  Eileen Benner's December 13, 1990 Decision Memorandum re:  Idaho USF - 1989/90 Results, Fund Balance, and Funding Requirements; Case No. U-1500-174. Commissioner Swisher asked Eileen Benner about her recommendation on this? Discussed the options. Commissioner Swisher said he would go with Option 3.  That is 2 mills.  Thought there would be some exposure at Gem State. Marsha Smith asked if there couldn't be 2 years of stability at this level?  Two mills will cover current outlay.  That would leave balance as is. Commissioner Miller said it will be the end of next year before these expenditures hit us.  One mill produces 400,000.  Current outlay is a little over a mill.  Expressed concern about going down to 1 mill and then go to 2 mills later again.  Would be better to stay at 2 mills now. Unanimous decision on Option III.  Effective date:  Discussed January 1 or February 1 effective.  Wording:  For service provided on and after January 1, 1991. Marsha Smith will do the order. Discussed those who submitted bids for USF administrator. Commissioner Nelson said he would move approval of hiring Allyson Anderson. Discussed having second signatory. Marsha Smith said the industry was comfortable with having Jim Wozniak be the second signatory.   Commissioner Swisher said he thought it should be someone else other than U. S. West. Decided on Jim Wozniak since the industry was comfortable with him. Bonding & Security Issues -15- Commissioner Nelson said if there is a million and a half dollars in there, should be bonded for that, but that would be expensive. Commissioner Miller said with 2 signatures and annual review, think bonding question is marginal. No bonding necessary was the decision. Matter is to be handled by letter and contract, not order. **Will be overlapping contracts for a time. 5.  Mike Gilmore's December 11, 1990 Decision Memorandum re:  Idaho Power's Level Pay Plans-Case No. IPC-E-90-6. Decision:  Put the proposal out for comment. Make sure Wendell Phillips, Fothergill, Sandusky, etc. know about it. **Get good distribution. 6.  Tonya Clark's December 11, 1990 Decision Memorandum re:  Richard E. Nelson dba Thiessen Oil Company, Lewiston, Idaho, Case No. M-7619-2. Commissioner Nelson said he thought it was an unnecessary administrative burden to have him file all over again if it is a technical thing.  All you will do is make him mad.  Think he would accept the late-filing. Decision:  Let him back in. 7.  Brad Purdy's December 19, 1990 Decision Memorandum re:  River Rate Express--Case No. M-7552. Commissioner Nelson said he didn't think it was normal to have 3 accidents in one summer.  Think it is a real problem. Brad Purdy said he thought a couple of those were fenderbenders. Commissioner Nelson said it was a real problem using an unlicensed driver. Commissioner Miller said there is the issue of whether or not shuttle is regulated authority.  Said we could formally or informally declare our jurisdiction. -16- Mike Gilmore suggested informally sending a letter signed by an Assistant Attorney General. Discussed which states had exerted jurisdiction. Commissioner Nelson said he didn't think he would require all shuttle services to have primary coverage.  First question is:  do we have jurisdiction or do we want it? Commissioner Nelson said he thought Commission should assert it.  There is no way you can separate it from the shuttle service.  Owner's coverage will be the primary coverage. Commissioner Nelson said we could make sure all their drivers have licenses and they have all the insurance required. Commissioner Miller said lets notify this guy that he is subject to our jurisdiction and see if he wants to sign a consent agreement, pay his fine and if he promises to conduct his business under our requirements.  If he signs, okay.  If not, we will go from there.  If he signs a consent agreement we don't have to speak to insurance.  Don't think we can rewrite insurance law.  Car owner is the primary insurance holder. No to questions 2 and 3. If he signs the consent, that takes care of 4. 5.  Reinstate with caveat that safety check is done. **Annual review. 10.  Lori Mann's December 14, 1990 Decision Memorandum re:  Revision to PP&L's Schedule 10; Advice No. 90-103; and 11. Lori Mann's December 14, 1990 Decision Memorandum re:  Revision to UPL Schedule 21. Commissioner Nelson said he thought they were headed in the right direction.   Commissioner Miller said it was a good time to discuss which direction we are headed on energy matters. commissioner Nelson said he would like to get the Idaho Code up on MCFs and do away with incentives. **Ask for report of '91.  Do want early report on penetration. -17- Commissioner Miller suggested Lori Mann and Bill Eastlake look at other companies. Lori Mann said she didn't remember what the status was on the other companies. **Do by order, not minute entry. 1.  Lynn Anderson's December 7, 1990 Decision Memorandum re:  GTE's Letter Withdrawing Advice No. 271 (OPUS), Case No. GTE-T-89-5. Lynn Anderson explained the tariff withdrawal letter. It brings their tariff into conformance with their latest plan.  Originally thought there was a problem with zone charges but they were approved in a separate filing.   Commissioner Miller asked if we need to set the record straight? Commissioner Swisher said he would move that staff write the order granting the withdrawal. Discussed delaying zone upgrade charges at this time. Don Howell said we granted interim on zone charges.  Said it was his recollection that Commission approved interim charges because we would get to them in the OPUS case. Commissioner Swisher said we go through this every time we meet with them.  People have no way of following the bouncing ball. Lynn Anderson said in situations like this, am thinking of making it a Zone 1 charge. Commissioner Nelson said another reason for withdrawing the zone charge is they have redone it so they are going to do it by demand. Don Howell said he thought that was one of the issues Commission wanted to discuss at hearing.  They may not need price suppression. Commissioner Nelson said it has always bothered him how the decision was made. Bev Barker explained the difference between line extension and zone charges. -18- Don Howell said as staff advocate, want to make an issue in the case whether there shouldn't be suburban rate base for installation instead of other charges.  We are still on tap for their LMS filing January 11; hearings to be held end of February.  Company has gone ahead and done the facilities upgrade.  People with savy have called and said we want four-party rates.  Company was told to file four-party tariff. Commissioner Nelson said he would like to move that we withdraw zone connection charge and go back to line extension determined in last rate case until such time as company makes a proposal and justifies it with other parties having chance at it. Lynn Anderson clarified that service installation charges were changed. Commissioner Swisher clarified the wording on zone charges and further instruct the staff to to tell company to put a freeze on ordering anymore four-party service. Commissioner Miller said he is afraid of making an equally bad decision as we did when we made the decision that started this.  Maybe a better way to do it would be to require them to show cause why this shouldn't happen. Commissioner Nelson said nothing will happen until April if you do that. Commissioner Miller suggested tracking them down for a show cause hearing.  Thought for the greater good of the service territory we could hold demand off for awhile.  Am equally frustrated but would prefer dragging them down here. Hearing before January 15.  Get it set up. **Also in attendance was Dan Poole. 9.  Lori Mann's December 14, 1990 Decision Memorandum re:  Caller ID; Case No. GNR-T-90-1. Commissioner Nelson asked about the current situation? It will be handled on a call by call basis. Dan Poole said per line blocking would be available to individual entities on a demonstrated-need basis.  Any of the shelters that say they have a need will be given per call blocking. -19- Commissioner Nelson asked about law enforcement agencies? Dan Poole said they have met with law enforcement agencies.  At this point have requested for one line to be line blocked. Commissioner Nelson asked if an individual could get it to protect a location? Commissioner Swisher asked about a person having a court order that says that a threat exists? Dan Poole said if a court ordered we would do that.  Will accommodate.  The goal is not to make the line blocking available to individuals on a per call basis. Commissioner Swisher asked if Dan Poole had seen letters we have gotten from women regarding this matter? Dan Poole said from entities (abuse shelters are on the top of the list)  Per line blocking should be available to them.  Name and number blocking are both needed.  That was modified.  Individual subscribers have to be worked with. Commissioner Swisher said Commissioners haven't had a chance to discuss this.  Are we altering the basis system?  Am thinking that instead of getting into something definitive, this is the first caller ID in the state and there are going to be other services of a comparable nature in that they do provide data of value to a third party.  Those legal questions are going to be scattered for years to come.  What he wondered about is if a better course of action which instead of doing something on a trial basis would be to ask for a stipulation from the company that speaking to per line blocking and Commission just has that as a matter of record here instead of us doing an order. Dan Poole said to the extent of what we are doing on per call blocking could put that in writing. Commissioner Swisher said he thought that would avoid policy decisions.  Think you need time.  This particular question was not anticipated in the drafting of the Telecommunications Act.  Everybody needs time. Commissioner Miller asked if staff has a position? Birdelle Brown - staff has some concerns.  (1)  For this trial period, company is providing per call blocking for no cost, will they change their mind and then start charging? -20- (2)  Who is the best entity to determine individual need where per line blocking is concerned.  Telephone company is going forward determining that.  Some places they are saying the police department.  That was a concern expressed. Commissioner Miller said he thought the customer would be the best one to choose.  In 1991 we determine that priority is not determined by person paying the bill.   Only other major concern is should basic ratepayers be paying for this? Bev Barker said people with unpublished and unlisted numbers are concerned about their numbers going out. Lori Mann asked if it is going to be free after the trial period? Mike Gilmore asked who had been turned down? Eileen Benner asked if the phone company considered using just names, not numbers? Marsha Smith said she thought it was probably too late to ask the company to modify an offering. Birdell Brown - perhaps another concern is limiting the information that could be transmitted with the number.  Thought the potential was there for more information to be transmitted  (Credit history or employment record). Commissioner Swisher said credit information is already being widely distributed. Commissioner Miller asked Jan Kreps from ACLU - who was in attendance at this time - if she would like to have something put in? Ms. Kreps said she thought they would like to see an option for line blocking by individuals. Commissioner Swisher said he sees a whole new generation that wants to opt out of voting, phone numbers, etc.  Each year Polk Directory becomes of less value.  If everybody can opt out, 911 won't work, nothing will work.  Don't believe that one person is the arbitrator of the use of the phone in a household. -21- Commissioner Nelson said the thing you are down to arguing over is a balancing of rights.  Think this whole issue is focused on a small percentage of the population.  Think that for the great majority of the population, the person being called has as much right to know who is calling.  Emphasis is on person being called.  Cannot imagine my wife calling me if she had been a battered wife.  The way it is being talked about it is a useage problem.  Without a trial period, how do we know? Bev Barker said person denied that can file complaint with Commission. Commissioner Swisher asked if people take calls that are unfamiliar? Eileen Benner suggested offering it with line blocking to see how may people would want it with blocking. Dan Poole spoke to the trial period in Omaha.  Gave the stats on that.   Commissioner Miller asked Dan Poole about Commissioner Swisher's proposal asking company to file stipulation that would avoid us getting to the legal questions of what we have jurisdiction over. Commissioner Swisher asked if this alters the characteristic of basic service?  Think you need time on that.  If we take this test in Boise and do things with it, we are going to be wrong.  That is why a sort of stipulation that says it is not a change in basic service would be helpful. Commissioner Miller said Bev Barker added that Consumer Division staff could resolve the disputes if any arose on who should get per line basis on a per need basis and could come to an understanding of what needs are.  Carried with that is that if disputes were not solved, Commission could resolve it. Eileen Benner asked if staff would have to have criteria? Commissioner Swisher said he didn't see staff being able to do that. Commissioner Miller said he would worry if customers negotiated with company and they didn't get blocking, if customers didn't know they had remedy for that, then we would worry.  If customers were notified they have a recourse, then am not as uncomfortable. -22- Gary Richardson asked if this is a mystery - the standard to be denied? Commissioner Swisher said company has to do that.  That is why I ask that the company file a letter. Commissioner Miller said what we are saying is all this has to do with personal safety, they would have to demonstrate threat to personal safety. Birdelle Brown said she thought she was hearing Dan Poole say the company would resist individual blocking but Bev Barker is saying the opposite. Commissioner Swisher repeated - this company would lay on us in a formal communication, how it proposes to do this.  Our acceptance of that letter would forego a decision at this time that any change has occurred to basic service by introduction of this service.  This gives the company a chance to be tested. Dan Poole said company has no problem with the letter.  Explained the company's attempt at balance between information and safety.  Explained what the "standard" would be. Commissioner Miller said this would be for a 6 months trial period. Decision:  Company will do letter response. 12. Birdelle Brown's December 14, 1990 DecisionMemorandum re:  Gateway Technologies Application for Exemption from Parts of the Telephone Customer Relations Rules - GNR-T-90-7. Mike Gilmore suggested allowing interim approval. Approved. Adjourned - to reconvene at 10:00 o'clock on Wednesday, December 19, 1990 - 10:00 a.m. In attendance at 10:00 a.m., December 19, 1990 were the following:  Commissioners Joe Miller, Perry Swisher and Ralph Nelson.  Also in attendance were:  Brad Purdy, Gary Richardson, Keith Hessing, Dave Schunke, Mike Gilmore, Don Oliason, Bob Smith and Myrna Walters. -23- Item No. 3 from the December 17, 1990 Decision Meeting Agenda was again the topic of discussion at this 12-19-90 meeting. Dave Schunke explained his handout.  Said on both computer runs he did use what we are calling a 10CP (which is an averaging of an 8 and 12).  Last one allocates distribution the same as company-based case.  Changes made from company base case is the 10 for transmission and generation and normalizes Nu-west load and normalizes the Nu-West revenue.  Distribution account is as company did in base case.  If you look at Company Exhibit 5, Page 1 is where it shows up.  Nu-West rate of return increases with 10. Said first handout allocates primary allocation on scheduled peak and secondary on non-coincident peak.  Then handed out information on diversity - the service line from house to transformer has to be designed to meet the load.  The measure of it is the maximum peak that a single customer would have.  Once you are at the transformer you begin to accumulate some diversity.  It would serve 3/4 customers.  Would have diversity there.  That would be what company tries to capture with weighted non-coincident peak.  That would be the kind of thing you would see at the transformer.  As you move toward transmission, diversity becomes greater and greater.  You move to a scheduled peak.  That would be what you would see at a substation.  Once you get to the generaator what you see is a co-incident peak.  That is a picture of how the system works.  The run at the secondary level is weighted non-CP and at substation used scheduled peak (on distribution).  The effect is very small to industrial customers.  Diversity hurts low load factor. Keith Hessing said the decision was unweighted NCP for secondary and primary.  Perhaps Commission wants to reconsider their previous decision. Dave Schunke said that issue (distribution) should be reconsidered. Commissioner Miller said 12 weighted CP was company's base case. Dave Schunke said if you agree that distribution should be allocated with weight the secondary and schedule peak at primary, then increases required for full cost of service in each class was shown on his handout. Commissioner Miller asked about taking the rate design theory Commissioners had and put it against these numbers? -24- Dave Schunke said he thought standard deviation was fine approach but there is one drawback.  Numbers tend to be scheduled.  Standard deviation didn't necessary draw the line between the big gaps.  There is a group from 39% decrease, 26, 41 ... in excess of 25% up to 40%. Commissioner Swisher asked what General Services meant? Dave Schunke said one standard deviation with rates of return 17% so those classes below 17%, the commercial proposal would get no decrease.  Schedule 9 at 15.9% rate of return.  It would fall just below the standard deviation. Commissioner Miller asked Dave Schunke how his proposal would affect Commission here? Dave Schunke said irrigators would get 2% increase in revenue requirement. Keith Hessing said he has information on 1 and 2% and removal of tailblock.  Explained his handout. COmmissioner Miller asked if this included the decision made on interruptibility, etc.?  Are those in here? Keith Hessing said he didn't believe those had an effect.  B and C compose 90%.  C has 90% of the class. Commissioner Swisher said if we do this, am looking at things people do react to - those significant rate increases.  Translate 400 hours into KWs. Keith Hessing said the things they can do to save energy, they can reduce pressures, that is the kind of thing it may cause them to do.  (Become more energy efficient)  Said irrigators would like it done in more than one step.  Don't have to eliminate the whole thing at this point in time. **It gives a real break for those under 25,000. Commissioner Swisher said he is concerned about creating reconfiguration.  Will they change number of pumps on a meter? Keith Hessing said in terms of energy there is no reason.  For demand, we are talking about irrigation systems that are interruptible at company's option.  We are telling them to redesign regarding capacity because they still have to get that requirement on the crop.  They have to plan and assume they are going to be interrupted.  We are sending -25- them a signal that when they do that it may not be to their advantage to go the other way.  We are sending them two signals.   Commissioner Miller asked if this would force people to migrate to Schedule A? Keith Hessing said not much because the rates are still so much lower.  Explained Company's original proposal.  After staff made proposals, they made two additional proposals.  One of them was to keep energy rates consistent through A, B and C and since interruption is intended to get at demand, just vary demand charges.  Would have high on A and low on C. Mike Gilmore went over company's concerns.   Commissioner Swisher said if we need to minimize, don't do it in two steps - why go through that? Commissioner Miller said Schedule A is the least draconian. Commissioner Nelson said he things it is unrealistic to not give any increase. Commissioner Swisher said you need to get the message to the irrigators. Commissioner Miller said he thought there are two things wrong with irrigation schedule - (1)  Tail block and (2)  Other classes are subsidizing this class.  Maybe correcting both of those problems in one case is too much to do.  Think most important thing is the tailblock problem. Commissioner Swisher said it has to be addressed.  There is no where to go with this.  Do have to say this is what this stuff costs and then you make your economic decisions on how you use the water.  Can't survive going forward with just walking away from the problem. Commissioner Miller said rate design within the irrigation class is important.  Thought everyone should come back in on this.  Suggested freezing it as is and putting it on the table. Commissioner Nelson had a proposal:  Put increase on the tailblock of 5% (2% overall) would raise 1/2 million dollars.  Those are the people you want to talk to.  Don't lower any initial blocks. -26- Dave Schunke said UPL talked about filing for an additional 1% decrease March 1. Commissioner Swisher said that was a merger commitment. Commissioner Nelson said Schedule A is pretty close to cost of service but on B and C increasing tailblock by 5% that is 2% overall for the class.  You could lay that proposal out to them and give them something to look at. Commissioner Swisher said he thought you should resist the company demand proposal. Dave Schunke asked if Commissioners would want to have them file tariffs effective March 1? Commissioner Miller asked if there was a way to stay effectiveness of 1% but accumulate it until after reconsideration? Mike spoke to several options - one of which was to delay effective date if you have already decided not to raise anyone's rates. Commissioner Swisher spoke to not changing rates very often.  If Commission says don't file any tariffs because we have your word on the 1% coming and no one is irrigating at this time but here is our order and findings, then go back into session on rate design.  Then you are only doing one set of tariff changes and the public understands what has been done. Keith Hessing said that would continue the interim. **Would leave 2.7% decrease  in place. Commissioner Nelson asked what reconsideration would do? Commissioner Swisher said you will have gotten the attention of the irrigators on willingness to move from declining block to flat rate and you would have gotten the attention of the company and irrigators on demand charge/rate relationship and will get testimony on that.  Would have testimony with respect to commercial class and in this order the one real change we could make would be to provide that relief and do it now. Keith Hessing asked if Commission would do revenue allocation now? Commissioners said yes. -27- Keith Hessing said even if you do that we get a new tariff. **Get rid of Schedules 3 and 4 and set up allocations you are going to discuss in new case and grant relief for commercial class. Commissioner Nelson said he thought we have to adopt rate design now. Commissioner Swisher said if we can stand to not do this now, make the commitment but don't do it. Commissioner Nelson said if we grant relief to commercial class, then if 1% comes through, why can't we adjust it across the board? Commissioner Miller said he was hoping we could fix revenue requirement for all classes and then make decision on rate design in irrigation class and invite reconsideration on that piece of it. Commissioner Swisher asked - can we go ahead with this reallocation  among classes, put it in the order and suspend them? Mike Gilmore said yes, make it effective March 1 or April 1. Stephanie Miller suggested you could say you expect a 1% and consider what you intend to do with it. **Propose how you would handle the 1%.  The order can be final without an immediately effective date. Stephanie Miller said if order goes out first of January, won't be effective til February 1. Dave Schunke said if you applied all of the increase to the irrigation class on tailblock rates of Schedules B and C and apply decrease to others and then at the same time addressed the 1% decrease which would be effective March 1 and say that applies to all classes except irrigators, or to front block, spell that out, issue an order, would have an opportunity to comment on it and by March 1 effective, you could assess how much feedback you got. Adjourned until 1:00 p.m. Reconvened. -28- Commissioner Miller said he is wondering if Commission really wants another hearing?  Asked Keith Hessing what he thought? Keith Hessing said there probably will be a petition for reconsideration.  We are so far down the road, another couple of days to make the decision and ask staff to look at some other options is reasonable. Commissioner Nelson said Dave Schunke's numbers show that 12CP is close to what we are doing.  The 8 and 12 are so close, we could move people closer toward cost of service without adopting one or the other. Commissioner Miller said he thought Commission could take the 10 and keep it in the case because it does compromise the unweighted problem with the 12.  Don't have to say this is the cost of service and that would be the benchmark to use as a target. Keith Hessing said if we do that we should use some term besides 10CP. Commissioner Swisher suggested saying we averaged it for these reasons.  Call it average 8/12 CP (averaging the results of the two). Commissioner Miller said he was wondering if we spend some more time looking at what staff has give us, if we can get to a conclusion we can live with and if someone petitions for rehearing it will be considered. Commissioner Swisher said he thought not. Commissioner Miller said if we are inclined to change the tailblock as opposed to changing overall revenue requirement, don't know whether Yankel can give us any information. Commissioner Swisher said you are working at the way irrigators pay being more realistic.  You are going to cause some changes and you can't before the fact straight-jacket those changes. Commissioner Nelson said his proposed change in the tailblock isn't a strong move in eliminating it.  It still leaves a significant tailblock. Discussed including 1% decrease and other money already out there and increase irrigators overall by 2% and apply that to tailblock.  Don't discuss where the decrease is to be spread. -29- Commissioner Swisher said in review:  Put all of this in the order and we will do that on March 1.  Invite the parties to bring in their reaction to the decisions? Approved. REVENUE REQUIREMENTS FOR THE CLASSES. Commissioner Miller asked - do we want to spread it over other classes or just the furtherest out of line? Commissioner Swisher said his problem with going with anything but standard deviation is, we are working with '88 numbers. Dave Schunke explained his recommendation. Commissioner Swisher said we are going into '91 and the truth is Residential I isn't contributing what it did in '88. Dave Schunke explained his groupings.  Also spoke to Ron Williams' recommendations. Commissioner Miller said either way would be fair. Commissioner Nelson said he agreed - suggested saying spread the deduction among six.  Would like it to be that they are all close to the same rate of return. Commissioner Miller said he would want to do the most for the commercial classes - 6 and 23.  They are the furtherest out of line. Commissioner Nelson asked if the dollars were available to reduce all classes down to cost of service? Dave Schunke said no. Commissioner Nelson said there is 3 million to spread among 25 million. Commissioner Miller suggested nothing to traffic or 8 or 9. Commissioner Nelson explained his proposal. Commissioner Miller said reducing street lighting by 18% would only be $140,000. -30- Commissioner Nelson's proposal was:  Total revenue of $17,900,000, rough number is 17% for the 3 schedules.  (Large general, street lighting, small general)  That will be 3.2 million. Discussed the 1%.  Where should it go?  You could spread it straight across on the 1%. Dave Schunke said he wondered about the irrigators?  What about the 1% for the irrigators? Commissioner Nelson said he would hav no problem with leaving them out and spreading it uniformly on other classes. Commissioner Miller said this was a cost-related, ratepayer payoff that everyone should get. Commissioner Swisher said what you could do with the 1%, is say the irrigators will produce this much revenue and apply it in your restructuring. Commissioner Nelson said if you apply it on to the front block, you move that tailblock a lot closer to the original block. Commissioner Miller questioned the reduction was for all customers? Agreed. A, B and C front block, energy only. Across the board to other classes. Keith Hessing said on 1 and 36, the company does a sampling of those customers for cost of service.  On Schedule 10-A, B, C, they lump them together and do cost of service of whole group.  Think it is within the Commission's jurisdiction to order them to break them out. Commissioner Swisher asked - do you really want to do that?  Think it might get worse if you ask for subset in the class. Keith Hessing said it has been difficult to make recommendation on Options A, B and C. Will leave as is. -31- Went to Page 38 of the Decision Memorandum. 1.  Staff proposal was different on irrigators than other classes.  Yes to Staff on this. 2.  Work toward that. 3.  Pages 41 and 42. Should seasonal differentials in rates be eliminated? Commissioner Miller said his attitude is someday that should be eliminated.  Thought it might be a better decision to make in the first rate case of the merged company. Commissioner Swisher said if you go forward it may be that the balance in capacity requirements when you take into account the nature of the Eastern Idaho load, you may have inamorable  seasonal differences. Commissioner Nelson agreed time to look at that would be in the first rate case of the merged system. **Keep this question in mind for that case. 4.  Done.   5.  Exit Fee. Commissioner Nelson said he thought recommendation to have them stay on all season was better. Commissioner Miller said if we are going to roll the irrigation cost of service will be decided later. **Are going to do Commissioner Nelson's decision.  Then invite reconsideration or some other way to initiate a new hearing to see what we get. Keith Hessing said this speaks to interruptibility. Commissioner Swisher said it would cost more to get ready to interrupt than they would save by interruption. Keith Hessing said there is some value to interruptibility fur their system. Dave Schunke spoke to value of it as is.  Would hate to loose it. -33- Commissioner Miller suggested having them get ready for it.  Put irrigators suggestion in place. Keith Hessing said the irrigators' position is a "fall back" position. Commissioner Miller asked if it should be implemented for this season? Commissioner Swisher said this season. Keith Hessing said irrigators and company both want another year. **Went with '92. 6.   Should it "go with the land"? Commissioner Miller asked if we should tell the parties to work this out? Commissioner Nelson said there needs to be some exceptions.  Discussed the matter.  It could make a difference in the value of the farm. Commissioner Swisher said he thought new owner should have to pay to change schedules. Commissioner Nelson said he thought with year notice he should be able to make change with no charge.  Have contract requirement for a period of time. Discussed probably moves. Dave Schunke went over reasoning for exit fee. Commissioner Nelson asked what it would mean for a 400 hp user? $3,000. **Commissioner Swisher suggested putting it into place for '92 and take another look at it.  Fees as proposed by Yankel will be part of the audit for '92. 7.  No to time of day rates on Schedule 10. 8.  Previously discussed. 9.  Against customer charge. -33- 10. - Order them to start fixing the system so it could be interrupted. Commissioner Miller suggested requirement that they send to us their proposal to get it improved.  Fix the broken and restore those that are in place. Discussed target rate of Nu-West. Thought reduction does mitigate target rate of Nu-West.   Commissioner Nelson said take away their interim reduction. INTERVENOR FUNDING. Commissioner Miller went over his proposal.  Said he paid all the out of pocket expenses of everybody.  Then paid Simplot $1,000.  That left $17,200 divided that equally by 3.  Each got $5,700. Commissioner Nelson said he reduced everything to the lowest.  Came up with total expense and gave each party percentage of $20,000.  But did think Commissioner Miller's theory was fine.  Did suggest actual and give them $85 per hour less $1,000 for Simplot.   Final decision was:  Actual + $31 per hour for actual hours. No to Ron Williams' assertion of late-filing by Irrigators. Meeting adjourned. See next page for signatures ..... -34- Signature page for December 17-18-19-1990 Minutes.         DATED at Boise, Idaho this       day of January, 1991.                           PRESIDENT                           COMMISSIONER                           COMMISSIONER ATTEST:                               Commission Secretary 1169C 0011M