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HomeMy WebLinkAbout19910123.docx Minutes of Decision Meeting January 23, 1991 - 1:30 p.m. In attendance were: Commissioners Joe Miller, Ralph Nelson and Marsha H. Smith and staff members Stephanie Miller, Tonya Clark, Mike Gilmore, Scott Woodbury, Lori Mann, Lynn Anderson, Gary Richardson, Belinda Anderson, Bob Smith, Bill Eastlake, Birdelle Brown, Don Oliason, Eileen Benner and Myrna Walters. Commissioner Miller welcomed Commissioner Smith to her first decision meeting as a Commissioner and made a few announcements before starting on the items listed on the agenda. (1)  Explained the different format of the agenda.  Basic idea is that this will let everyone know in advance the order.  Also, it is a little more logical from the easiest to the hardest.  Suggested that when staff is doing decision memos, if there is some question as to what category, put that category in the memo.  Sometimes the question of where it should go will not be entirely clear.  Will take awhile to figure out categories.  Indicate to Myrna Walters where it should be. Also on decision meetings, will have them in the hearing room from now on.  Are trying to figure out someway to use the back of the hearing room.  Reasons for the change:  attendance is getting so great that the current room is awkward and it must be distracting for others in the vicinity.  Also, it looks like more and more people will be attending the meetings and the current room is kind of intimidating - appears if you come in you may be taking someone else's seat.  Will start next week having decision meetings in the hearing room.  Any advice, comments or suggestions on how to configure the room will be appreciated.  Want to do it with a minimum of expense.  Give commissioners your thoughts.   Also, there will be a list out soon of case chairman assignments.  Commissioners met Tuesday and decided on those.   Gary Richardson suggested that the last category on the agenda be worded something other than "Contested" matters. Commissioner Miller said the chairman of the hearing will also lead discussion at the decision meeting and will work with the attorney on the case on drafting of the order.  Chairman would get the order done and other Commissioners would add their comment or suggestions.   -2- Staff asked if drafts should still be circulated simultaneously? Commissioner Miller said draft orders and decision memos should still be circulated simultaneously, but if there are questions by staff, can go to the chairman first.   Have also discussed having a Commissioner in charge of other matters even if they have not gone to hearing.  Will discuss that further. Started with items from the Published Agenda at this time. Regulated Carrier Division Agenda dated January 22, 1991. Commissioner Smith moved approval of the RCD Agenda. Commissioners Miller and Nelson concurred. LYNN ANDERSON'S JANUARY 14, 1991 DECISION MEMORANDUM RE:  AT&T ADVICE 45 - Elimination of Minimum Usage for NETCOM. Commissioner Smith said she would move adoption of Staff Recommendation No. 1. Asked if contracts weren't exempt?   Lynn Anderson replied if you say it is exempt, it is also exempt from USF. Commissioner Smith asked if the question is whether rates should be part of the average or calculation of the average, is that already in the case? Lynn Anderson said determination of the rate makes it a contract is the argument.  Would say not.  Talked to Brightwell of AT&T about this.  Discussed the possibility of MCI filing a complaint.  She said that may be a possibility.     Commissioner Nelson said he got the impression they are not going to offer it to everyone. Lynn Anderson said yes they are.  But are discontinuing it October 1991. Commissioner Nelson asked about State of Idaho? -3- Lynn Anderson said they are changing them but it can't all be done at once. Commissioner Nelson asked what the rate was? Lynn Anderson said he didn't know. Commissioner Miller asked if the deaveraging question will be moot when the state switches? Lynn Anderson said yes.  It is only 9 or 10 months where there is a possibility of complaint.   Commissioner Miller asked if it wouldn't make sense to let it be effective and see if someone files a complaint?  By the time Commission gets done with toll deaveraging, will have a better feel for contract language. Commissioner Nelson asked if SDN was a tariffed rate that is available to everyone? Lynn Anderson said he thought so and Eileen Benner agreed it was available if you could afford it. Commissioner Nelson said this is actually grandfathering NETCOM. Don Howell explained that switchover is causing the problem. Commissioner Nelson said he would also vote for Staff Recommendation No. 1. Commissioner Miller agreed. Lynn Anderson is to let company know that is what Commission is doing. 2.  EILEEN BENNER'S JANUARY 22, 1991 DECISION MEMORANDUM RE:  USW - PNB Advice No. 484. Commissioner Miller asked if this was due to a math error? Eileen Benner replied the potential users didn't want to pay $6.  The Washington Commission staff found that the company committed a simple but gross math error.  Whatever number they took was just an estimate of the buy-up of the service.  It is still questionable in that respect and in Washington they have lowered the rate. -4- Commissioner Miller asked - has this been noticed to the potential customers? Eileen Benner replied at the initial offering, one of the potential customers contacted staff because they were concerned about the service and apparently their concerns were alleviated.  According to the company the only notice customers are getting is they are getting notified through National Security/Emergency Preparedness and they will have to switch to it and this is how they do it. Commissioner Nelson said it sounded good to him. Other Commissioners concurred. 3.  IDAHO POWER COMPANY'S REQUEST FOR ADDITIONAL TIME FOR FILING OF IPC COMMENTS IN IPC-E-90-6. Mike Gilmore said staff did not oppose the extra time for company response to comments received.  But did not think Commission Secretary should be required to furnish copies officially - could present a due process question at some time.  Would propose to tell Mr. Ripley unofficially that copies will be provided in this case. Commissioner Smith said this comes up all the time.  Didn't think Commission Secretary should be responsible.  Would rather amend the order to require them to file but know that doesn't work for individuals commenting.  Think the lawyers should take it seriously that the company gets copies.   Mike Gilmore said he was not very sympathetic to the companies - they can ask. Commissioner Miller said he had not thought of the due process angle. Mike Gilmore will do an order granting the time extention to Idaho Power in this case but will not order Commission Secretary to serve copies.  Will handle that informally. **Commissioner Smith asked about the status of payphone rules and Title 62 rules? Mike Gilmore replied that he was working on both of them - will do decision memos next week. -5- CONTESTED MATTERS 1.  SCOTT WOODBURY'S JANUARY 14, 1991 DECISION MEMORANDUM RE:  WWP-E-90-4 - ELECTRIC TO GAS CONVERSIONS. Discussion of the proposal was recorded as follows. Commissioner Miller asked Bill Eastlake if he had looked at the proposal and what his general assessment was. Bill Eastlake said he would prefer to separate the demonstration part of it from the real thing.  They have combined them.  Prefer it being a test before Commission goes ahead with permanent. Commissioner Miller said he would do 6 months - but at year end they would just barely have 6 months' numbers.  Could put it all together then and take a hard look at it. Commissioner Nelson said he had question about depreciation period.  Thought 20 years was a long time for water heaters. Bill Eastlake said he thought it was longer than the life in both cases - water heaters and furnaces.  In their cost analysis should have spoken to whether or not they will really last that long.  Company won't replace them the second time.  They are purporting to show how the savings will look to the customer.  There will probably be another water heater and another furnace.  Customer is still saving a lot of money under this proposal. Commissioner Nelson suggested perhaps someone could go over the proposal where they are going to come in for lost revenue on electric and not increase on gas. Commissioner Miller explained why he thought they were doing this. Commissioner Nelson commented the program is only available to current customers. Scott Woodbury said Dave Schunke objects to that part of it. Commissioner Miller said the other leg of that is company puts all their money in ratebase and keeps their share of the shared savings - etc., which makes it a pretty risk-free proposition. Scott Woodbury said he knows another thing staff has had problems with is the level of the customer incentive.  It is felt the incentive is way too high.  What customer has to pay -6- is way too low.  IGC's program is $54 a month and they are still able to get a number of them to come on free.  The way WWP has it set it up, the existing customers are going to pay for it and it seems to be a pretty big hit. Bill Eastlake said his rationale is he accepted their contention that the proposal is below the avoided cost.  Also like the fact that it is a temporary program.  Wonder if PP&L is giving enough incentive.  They are charging the customer almost all of the full value of the savings generated.  This is a nice contrast to that. Scott Woodbury said it is a lot easier to increase the incentive then to decrease it.  They have started so high. Commissioner Miller said he thought these were all very interesting questions of the application.  There are questions that need more discussion. Commissioner Smith said she thought Commission needed to show support for this idea for the test period and wait for the results before Commission says what they are going to allow.  Think staff is right to have concerns.  After the test you can have a hearing, whatever. Commissioner Nelson questioned the test period March 1 thru June 30.   Scott Woodbury said that is the sign-up period. Commissioner Miller asked what Commission would know at the end of the test period, would know percentage of sign-up? Commissioner Smith asked if there would be a better feel for cost at that time? Bill Eastlake said level of charge would be one.  Do doubt their lost revenue assertions - say come back after 7 months actual experience. Commissioner Nelson said he would approve the test implementaiton but not the full thing. Commissioner Smith asked if revenues follow expenses? Stephanie Miller said this is a creature of their Marketing Department.  These revenues are supposed to go directly to marketing. Commissioner Smith commented that was fine if they want to also take expenses. -7- Stephanie Miller said staff wants them to account for it the same way PPL does.  Put revenue into utility revenue.  If it were to go into the future, in rate case they will be treated along with everything else.  Just sort of pl;us it all in and after time it will work out.  This company is in the business of selling electricity primarily. Commissioner Smith said she thought the idea was good and they should be encouraged. Stephanie Miller said staff may be able to sit down with them and explain how the PPL thing works while theirs is on a trial basis. Scott Woodbury said avoided cost numbers aren't those in the Commission order. Bill Eastlake commented they are very close, though. Commissioner Miller said one of the reasons to not worry about incentives, is at least in this we could count with accuracy.  Whatever you get, is actual. Commissioner Nelson said there wasn't a lot of take-back on this. Bill Eastlake spoke to the various installation costs.  Some of them are a great deal. Commissioner Miller said he was still not sure of the length of the test period. Commissioner Nelson said it is a 4-month signup period.  Thought perhaps we should go through a hook-up period also.  Thought when you weight signups, will know if we like the program or not. Bill Eastlake said this would give a feel for where the real customers are. Commissioner Smith said she thought company should be encouraged by Commissioners.  Work closely with the staff on appropriate aincentive. Stephanie Miller spoke to the possibility of a commission proposal - (sales commission). Commissioner Smith said she was not opposed to a reasonable incentive for the company.   -8- Commissioner Nelson suggested Commission approve it for a six months test period from March 1 to September 1 and Commission will examine it before company expands their territory. Commissioner Miller said Commission still won't know numbers.  (1)  First part is level of penetration.  (2) what does it do on the revenue side, electric and gas, should they be offset or not offset, etc. Commissioner Nelson said he would defer those questions until the end of the test period. Commissioner Miller said you won't go through a year that way. Commissioner Nelson said you will know what equipment will be replaced; will have useage from prior year, would know how much you are going to save. Bill Eastlake said roughly speaking, think you could work up everything else you needed from that.  Would suggest giving them a little longer - until November 1.  Would give them a chance to analyze it better. Commissioner Nelson asked - are we being fair to the company to not tell them what we are doing with the revenue? Commissioner Smith said she thought it was better to do it this way without real dollars on the table. Commissioner Nelson said there will be real dollars because of conversions. Commissioner Miller said if we just had an assurance that it is prudent for ratemaking purposes the exact accounting treatment and revenue treatment will have to wait.  Perhaps that will be enough for them. Commissioner Nelson said that is giving them everything they are entitled to. Stephanie Miller said they didn't say definitely they were going to use lost revenue, just want to keep track of them.  If they got into a case where there was a recession, etc. they would hate to have this program going on that was increasing the revenue decline. Scott Woodbury said for lost revenues they are just looking at one class. -9- Commissioner Nelson said his concern is offsetting the gas revenue.  This could be a fairly costly investment. Commissioner Miller asked how can we get this started and still keep all these questions open? Stephanie Miller suggested Commission can just approve the pilot program and say we need a lot more information. Commissioner Nelson said to express concerns of staff. Commissioner Miller asked what is the pilot program? Scott Woodbury explained it is the same tariff, during the test period they are going to fine tune.  They propose coming back with a modified schedule prior to the full implementation.  They have had to put in place their low income component. Commissioner Miller asked if for the test period they are only targeting 2400 Coeur d'Alene customers? Scott Woodbury said that was correct. Commissioner Miller suggested saying by November of 1991 you have to come back in to decide if it should be targeted service-wide, January 1992. Scott Woodbury asked about the request by company that the equipment being replaced, being destroyed.  Said without this type of a provision, company was concerned it would end up somewhere else in its service territory and would not shed load. Commissioner Nelson asked about replacing old furnaces with new? Scott Woodbury spoke to possiblity of secondary market, that is their concern. Bill Eastlake said they want the old furnaces gone.  Did ask IGC about it.  They said it is not a concern. Commissioner Smith asked if Commission couldn't assume that since WWP has essentially purchased it, can't they decide what should happen to it? Commissioner Nelson said he would approve it for this test period.   Commissioner Miller said he would go the same way. -10- After discussion of the WWP-E-90-4 filing, decision was:  Approve pilot program March 1 thru November 1, with the concerns of Commissioners and staff to be considered when a review of the program is made after November 1, 1991.  Also let company destroy the outdated equipment - on the theory that WWP has really purchased it. Gary Richardson asked about letting the decision out? Commissioner Nelson said as long as the company knows the decision first. 2.  Lori Mann's January 17, 1991 Decision Memorandum re:  Hayden Pines' Petition for Reconsideration and Petition for a stay; Case No. HPN-W-89-1. Commissioner Nelson said he thought that the settlement of their appeal took care of all these expense issues. Lori Mann said it took care of them for the last case - U-1037-37.   Commissioner Nelson asked - are they asking for known and measurable changes in this rehearing? Lori Mann swaid no - Ford didn't start making the refunds as ordered.  The $15,000 is for hiring an accountant, as ordered by the Commission.  The offset of that is the total amount - the 3.36% totals $14,000 a year.  What Woody Richards proposed is if we grant the accountant's fee, this would wipe out the $15,000 refund. Commissioner Miller asked if the Ratepayers consented to that kind of an arrangement? Commissioner Nelson said he had a hard time determining what Woody Richards wanted in the petition.  Other than the $15,000, couldn't see what he was asking for. Lori Mann said he is saying you cannot ask for this piecemeal. Commissioner Nelson said why go to rehearing to have a rate case? Lori Mann said the issue here is does Commission have authority to lower rates for only one of the things. Commissioner Miller said what he is asking for is make these accounting changes but don't speak to dollars until the next rate case.  Asked if Lori Mann had had an -11- opportunity to assess Point No. 1 from a legal point of view?  Question was:  Does Woody Richards have a reasonable argument on the strength of our order? Lori Mann said looking at the points he brought up, don't think he brings up that much that can't be rebutted at the Supreme Court. Commissioner Nelson said we were looking at issues that had come up in the old case and moved to a separate docket. Commissioner Smith said it is her opinion that when Commission sets rates we have to look at what Woody Richards says we should look at.  Thought Commission was wrong to pass thru tax rate decrease.  Offset idea - don't know if that fits in this case.  Don't know if those amounts are equal.   Lori Mann said she thought this was the way to go with this case. Commissioner Nelson said in this case before we set rates based on the overall reasonableness in the prior case and this took care of the additional items that came up that would have adjusted rates in the prior case if we had considered them. Commissioner Smith said the other concern is can our order meet the test? Commissioner Miller said he didn't think that is in the order. Commissioner Smith asked - then do we have to have a rehearing for those? Lori Mann explained what the new docket was about.  The last case wasn't a full blown rate case. Commissioner Nelson said Commission determined revenue and expenses, ratebase, refused to consider some last minute changes that parties brought in. Commissioner Miller quoted what the order said about these issues.  If you could tie all that together in a sustainable way, then that would provide an additional response to the petition that does help us a lot.  We had ruled for the company on almost all of the contested issues and on these issues, we went with the staff so the amount of rate reduction was very small.  In effect, it was basically fair for an order to be issued that way. -12- Commissioner Smith said her concern is that we have an order that stands up at the Supreme Court.  If not, open it up for rehearing.   Asked Lori Mann if we could deny with an order that ties it together, that can be argued at the Supreme Court? Commissioner Miller said he thought Commission needed to know what the Court should hold. Commissioner Nelson said he was ianclined to deny it if we have grounds. Lori Mann asked about ordering that they hire an accountant? Commissioner Miller said tell them to put the costs in the next rate case. Jack Taylor interjected - in a previous order, Commission stated they would not tollerate inadequate accounting.  Long before the Commission told him to get an accountant, one was hired.  Was hired before the Commission said you should continue to hire someone like Presnell.  Richards acted in response to his prefiled testimony. Commissioner agreed it was worth repeating in this order to get decent accounting. Commissioner Miller said refund based on partial analysis, is where we need help. Mike Gilmore said he thought the Commission for single issue rate case was on good footing. Commissioner Miller asked that Lori Mann get more information. Lori Mann asked if the stay should be granted. Commissioners decided - they need more information - bring the matter back to decision meeting - will not discuss the stay at this time, either. 3.  Scott Woodbury's January 22, 1991 Decision Memorandum re:  Case No. IPC-E-90-20--Schedule 72 Interconnection Tariff--Non Utility Generation - A. W. Brown Protest - I.E.P.I. Comments. Commissioner Miller suggested:  Give Idaho Power company an opportunity to comment on Peter Richardson's comments and create a separate complaint case for the A. W. Brown complaint. -13- Commissioner Smith said - allow Idaho Power to respond to Brown's issues raised regarding this application, though.   Don Oliason said that would give staff time to work with the company on the tariff in regard to suggestions they have.   **New docket will be opened to address Brown's allegations, not directly related to this case. Idaho Power is to be given an opportunity to respond to comments by IEPI and appropriate concerns of Brown. Item 4 - Letter to Commissioners from Bruce L. Thomas re:  Case No. U-1500-176 - will be held until the next decision meeting so that Mr. Thomas can attend. Meeting adjourned at 2:45 p.m.         DATED at Boise, Idaho this       day of January, 1991.                           PRESIDENT                           COMMISSIONER                           COMMISSIONER ATTEST:                               Commission Secretary 0019M