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Home My WebLink About19910506.docx Minutes of Decision Meeting May 6, 1991 - 1:30 p.m. In attendance: Commissioners Joe Miller, Ralph Nelson and Marsha H. Smith and staff members Mike Gilmore, Lori Mann, Bill Eastlake, Gary Richardson and Myrna Walters. Items discussed were those listed on the May 6, 1991 Decision Meeting Agenda. 1A. Tonya Clark's 5-2-91 Decision Memorandum re: MC Permit Revocation Hearings. Commissioner Nelson moved approval of hearing examiner's report - recommending revocation. Other Commissioners concurred. 1. Joe Miller's May 3, 1991 Decision Memorandum re: Least Cost Planning for Gas Utilities. Commissioner Miller said the basic question is: What is the next step? Bill Eastlake said Option 4 on the Decision Memo - Ask representatives of the Company to meet with Commission Staff members and discuss possible approaches and areas of agreement. Would propose possibly referring to a couple of studies done by NARUC or someone on least cost planning, for something additional to react to. Commissioner Miller asked - you would prepare some sort of paper? BIll Eastlake said if that doesn't sound too formal. Want to crystallize some of our points and allow give and take by all and kick around ideas to see where to go from here. Commissioner Miller asked Commissioner Nelson what he thought? Commissioner Nelson said he thought either option 3 or option 4. Commissioner Smith suggested starting with 3 or 4 and work up to 1 and 2. Think 4 would be good. -2- Bill Eastlake said the advantage of 4 would be it would be a small group. Could stay focused. Think we might get more accomplished if we were to work informally. Commissioner Smith said if it is not an open case it is easier for Commissioners to informally give their input. Commissioner Miller said before it is cast in stone, there are others that would have concern, other state agencies, customers, will have to figure out what this means and would think we would have to end up with something that is at least consistent with what WWP is doing so we don't have radically different requirements for WWP in Washington and here. Commissioner Nelson said he thought staff ought to be familiar enough with what WWP is working under to keep focused on discussions with IGC. At least shoot for dovetailing that in. Commissioner Miller asked what about staff preparing an informal document that would serve as discussion foundation?. Send that to the company and invite them to get together with staff to discuss those things. Asked if that would be all right with the company? **Woody Richards and Mike McGrath were in attendance at this time. Also present were: Stephanie Miller, Bev Barker, Madonna Faunce, Syd Lansing, Belinda Anderson, Birdelle Brown and Don Oliason. Commissioner Miller asked Bill Eastlake how soon he could get something together? Bill Eastlake said in two weeks. Okayed. 2. Discussion of Perry Swisher's Letter of April 16, 1991 re: Atlanta Power Company. Commissioner Smith said it was her idea we would have to open a case or at least do modified procedure or something. Commissioner Miller said what he is really asking us to do is a rule or enforcement inspection mechanism that would go with the rule. Commissioner Smith asked if we have someone who could inspect a dam? -3- **Also in attendance were: Randy Lobb and Tom Faull from staff and Scott Burnum representing ICC. Commissioner Miller said the letter says: Dam must be inspected annually by an engineer qualified to inspect dams. Asked if that told an engineer the depth of the inspection? Tom Faull said he didn't know what level of inspection would be required, if there are federal standards? Randy Lobb said he hasn't seen the dam but understand it is pretty unique. Did do some dam inspections while at Water Resources. Explained those inspections. Don't think they have any sophisticated monitoring equipment. Think they inspect it to see if anything is washing out. Commissioner Miller said the scope of the inspections was not clear, also not clear how long this requirement would exist, two years, 50 years, what kind of a commitment? Don Oliason asked about dam inspection requirement? Randy Lobb asked - is there a base inspection done? If you knew what condition the dam was in at first, then you could base subsequent inspections on that. Don Oliason said Forest Service engineer from Ogden designed it. Dave Schunke said just on the face of it, you have two agencies in the business of designing, inspection, etc. Water Resources should be inspecting it. Thing that is being asked for here is making up for a glitch that got them out from under Water Resources. We could do it, but we would be reinventing the wheel. Seems it would be more appropriate for Water Resources and Atlanta to bury the hatchet and go back to inspecting the dam. Randy Lobb said they did all the inspection subsequent to the repair and they have history on flows, operation and maintenance of the dam, prior to repair. Tom Faull said realistically it would not be a big job, but what kind of a precedent are you setting, and is it a risk the PUC should be taking? Commissioner Miller said in regard to risk, would it be clear from risk management standpoint that they would cover us or any claim that might apply out of anything that might go wrong. We would want to know for sure we were covered -4- by state liability insurance if anything did go wrong. Mike Gilmore said he didn't know the answer to that. Will try to find that out. Commissioner Miller said he would want to know we were insured before we took this on. Don't recall all the details, but what are the chances of getting the hatchet buried with Water Resources and getting them back into business where they belong and we probably don't? Dave Schunke said Atlanta's attorney's biggest argument was Water Resources didn't have authority because of the size. They went to court and won. Technically they are not under Water Resources jurisdiction for not meeting certain requirements and now Water Resources has turned the table on them and said we will not inspect you, find your own inspector. Randy Lobb said he could find out about this from Water Resources. Commissioner Miller asked if it just worked out or if a court settled it? Don Oliason said his recollection was they negotiated it. **Keith Hessing and Terri Carlock were in attendance at this time. Commissioner Miller said he wondered if we should (1) have Mike Gilmore check into the insurance question to make sure any risk would be covered. (2) Dave Schunke or one of the engineers follow up on the question of what happened with Water Resources. On the scope of this inspection, looks like it would be: what kind of warranties, certification to the Forest Service, what do they have in mind? Mike Gilmore said we could always reach an agreement with Water Resources to use one of their inspectors. Don't know why we couldn't do a memo between agency heads. **Table it for a week. Get more information. 3. Letter from Utah Power dated April 5, 1991 re: price stability commitment through 1994 and Letter from Conley Ward dated April 29, 1991 in response to UP&L letter. -5- Stephanie Miller explained that the original commitment letter came to Commissioner Miller. Commissioner Miller said although Conley Ward doesn't express it outright, it says we have been acting a certain way for residential and small farm customers to preserve exchange benefits and to do that works to the detriment of NuWest. Maybe our effort to preserve this is artificial and at sometime, something is going to happen to it. Is it really fair to engage in this artificial process? If no one was getting hurt it would be sustainable over time. It is unfair to one customer who would be deprived of benefits he would otherwise be entitled to. Commissioner Nelson said he is getting the benefit of an incentive rate. At this point he isn't prejudiced against. Seemed to him in our last order we allowed NuWest to participate. Mike Gilmore said our initial decision was they would participate in the reduction that is one issue. Asked Stephanie Miller about the meeting. Stephanie Miller said basically at the meeting no one expressed opposition. The commercial customer felt that stability period would be to their benefit. Simplot told her quietly they were in favor. Brad Purdy talked to Monsanto and they weren't opposed. Irrigators were in favor because there are benefits to them. It boiled down to NuWest being the only one who opposed the proposal and part of their problem is they don't know if they are going to be there four years out or cogenerating their own. Said Conley Ward was incorrect on a couple of the statements in his letter. Went over Stephanie Miller's handout. She explained the numbers. Commissioner Miller said he is correct that the original promise of the decrease thru '92 was initially an inducement to permit the merger. That is one kind of reduction. It is unfair to take other reductions caused by something entirely different and count them as part of the merger reduction promise. Stephanie Miller said she had Terri Carlock check the orders on refinancing. Order approving refinancing made no provision for reduction of rates at the time they were completed. So while it is not tied to the merger, it is a -6- reduction the company wasn't obligated to make. If it had been normal ratemaking procedure, we would have had to wait until the next rate case to pick it up. They were sort of general ratemaking kinds of things, which merger related are either over-recovered or under-recovered, not necessarily trued up. Commissioner Miller said the way he visualized it, the 2% reduction was not a ratemaking driven thing. It was just a promise they made in order to convince the UP ratepayers that it was a good deal. That promise existed regardless of ratemaking costs. All these other things are different, they are not part of that promise, is that right? Stephanie Miller said yes and no. Mike Gilmore said he remembered Bolland on the stand. He wasn't promising the 5% - he wasn't saying give us that and other cost of service reduction - he was thinking he would get most of it from efficiencies. Commissioner Miller asked - isn't what Dave Schunke is going through, on top of the political promises? Dave Schunke replied - what we are going through is the jurisdictional allocation of those but it is after the direct decreases have been given to the various jurisdictions, how does it get cut up in the future? While they are related, the approaches are somewhat different. When you are just looking at the jurisdiction, they are more direct. We are looking at what method gets you there. Of course at that point they are cost-related. Stephanie Miller said the other thing to think about is, if company were to come in and say we have given the 5% and are giving no more, but what they are saying is trade the price stability for the two 1%s promised. It is as if they are trying to cut it off right now. Commissioner Nelson said he thought they were in a position that company is over-earning in Idaho. Stephanie Miller said it is pretty close. It is not clear cut case that it would go either way. It is not one of these things where we would come to Commission and say they should have a rate reduction. It could go either way. Commissioner Nelson said that leads him to believe it is worth something. -7- Mike Gilmore said it is sensitive to the test year. They don't normalize weather like other utilities do. Commissioner Smith asked what Commissioner Miller wanted to do? Write back to Conley Ward and say thanks for your views? Commissioner Miller said he does like to be assured we are getting something out of it. Would like assurance that without it there would be rate increases. Stephanie Miller said we are not giving up our ability to audit and to propose rate decrease if they are over-earning. Commissioner Nelson said it would seem like if no one is damaged by rate stability to stave off BPA, it is good. If it is to extend BPA credit out as long as we can, if there is a slight disadvantage to NuWest, there are large advantages to residential and irrigators. Stephanie Miller said NuWest might not be as advantaged as they thought they would be. Commissioner Miller said if NuWest wanted to be aggressive about it, can they make it not work by blowing the whistle to BPA. Stephanie Miller replied - don't think it is blowing the whistle to BPA, think they know exactly where they are. What NuWest could do is file a motion for investigation or formal complaint. Commissioner Miller said still need to know what Commissioner Smith thinks. Commissioner Smith said she thought that NuWest is getting a good deal now and any slight disadvantage that may have occurred because of our other decision is not enough to receive benefit in rate package. If they want to take us to the mat, they can but they are not going to do it with a letter. They are still at their incentive rate. Her idea was to tell them we understand your predicament and thanks for reminding us of it. Commissioner Miller asked - do you want to decide this on the basis of this letter? It is contemplated that we will give them some hand signal? Stephanie Miller explained what UPL thinks. Since Colby set it out in an informal letter the first time, they are letting it out now similarly. -8- Commissioner Miller asked what are they saying? Stephanie Miller said they are saying both. They have already made the 5% but that they would trade the 2-1%s for 2 years of no increases. They would still live by the timetable although they had already passed 5%. Now they would like to not live by the timetable. Think they just thought of this. We had talked to them earlier about deferring the rate decrease and having them actually book the amount they should have reduced rates by to draw on for the next two years to forestall a rate increase. This other seemed a lot cleaner and not nearly so transparent. Thought it was something a lot harder for BPA to pick up on. Commissioner Miller asked - what procedure do you contemplate now? Stephanie Miller said - just monitoring the company's earnings for the next 3 years. Commissioner Miller asked - what do we do specifically in response to this letter? Stephanie Miller suggested responding back with a letter. Commissioner Miller commented - then a letter also to Conley Ward? Thought Commission should sign the letters. 4. Lori Mann's May 2, 1991 Decision Memorandum re: Idaho Citizens Coalition's Complaint concerning Caller-ID: Case No. USW-T-91-6. Commissioner Smith said she had one thought - that our disposition of this should follow the same issue of the Caller ID. So it seems to her that if there is any inclination to issue summons in this and treat it in the ordinary course of events, think we need to rethink decision on Caller ID. Think they should be treated the same. Commissioner Nelson said he has been rethinking his decision on whether or not we should have granted reconsideration on Caller ID part that dealt with trace and trap and think maybe he was of the opinion all along that we should grant reconsideration for the purpose of asking for an AG's opinion on trace and trap. Disagreement was on what we do on reconsideration. Could grant reconsideration and open a complete investigation here. Don't know if he would issue U. S. West a summons or just grant reconsideration on the other case and ask parties to brief Commission on 18-627 20. -9- Commissioner Miller said he thought we need to get to that. Wonder if we need to issue a summons and ask Company to respond to motion to suspend. ICC also asks us to suspend the trial. Commissioner Nelson said he was not willing to do that. We have already approved that. Would be against suspending it. Commissioner Miller said he thought maybe since there is this motion, should send summons to the company. Commissioner Smith said they would need to respond by the 15the to the Motion. In order for us to approve it on its face, would have to prove it. Commissioner Miller said - or the threat to some individuals was so great it would be irrevocable. What would we do procedurally? Issue summons to U. S. West and then should we just do that much or at the same time let the parties know we expect written briefs, or prehearing conference? If we were going to issue a summons what would you suggest? Lori Mann said grant reconsideration in the other case and grant intervention and basically get rid of this case. Commissioner Smith asked - could you keep these cases on parallel - think their response will be identical. Mike Gilmore said could ask ICC about developing combined record. Scott Burnum said - we thought this would be faster track. Would prefer to keep this one separate. Lori Mann said she didn't see keeping this separate. Commissioner Smith suggested response time in each being the same. Mike Gilmore suggested keeping both case captions. Commissioner Nelson said he sees this issue being identifiable. Commissioner Miller said he was reluctant to have this one go away. Doesn't this raise an additional item of limiting liability? -10- Lori Mann said no. It is common to both of them. Decision was: Keep both cases alive. Commissioner Miller asked: Do you want to establish briefing schedule now? Commissioner Smith said - could extend the time for responding to the summons. Commissioner Miller said if we started with briefing, it would disadvantage U. S. West at this point if ICC wants to make additional arguments that haven't been made yet. Requiring U. S. West ... point he was trying to make is requiring briefs of U. S. West in both cases... Commissioner Smith said - think their answer would look a lot like their brief. Commissioner Miller said we don't know if we have heard everything from ICC on legal argument. Commissioner Smith said - could have answer come first and then set up briefing schedule. Commissioner Miller said Caller ID is ready for response. Scott Burnum said he would prefer seeing the Company's response before briefing. Mike Gilmore suggested having answer come 7 days before briefing, or 14 days. Mike Gilmore said - have the Commission Secretary issue summons with 21 days to respond, then simultaneous briefing a week to two after that for response. That would allow ICC to see the response. Agreeable. Briefs will both be due June 11. Lori Mann said - think setting this up like this is better than when it first started but still feel ICC should be part of the other proceeding. Commissioner Smith said we could consolidate the cases but not grant intervention. Decision: Consolidate cases but keep both captions. Do not automatically grant intervention -11- 5. Mike Gilmore's May 3, 1991 Decision Memorandum re: Petition for Reconsideration from Commission Order No. 23630 - Order Granting Exemptions from Customer Relations Rules for Companies Providing Inmate Telephone Services--Case Nos. GNR-T-90-7, GNR-T-90-8, GNR-T-91-1, GNR-T-91-3 and 31.D-R-91-1. Belinda Anderson explained the question is the 10 minute limit. In the beginning, on checking, couldn't get a single telephone call to go 10 minutes. Commissioner Smith said Belinda Anderson said it looked like they were shortening the length of the calls. Commissioner Nelson said - think we already put a number of restrictions on the companies in the interim. Was hesitant to do what this fellow suggests. Commissioner Smith said - deny on the charges we don't regulate and if it has been our practice to allow privately-owned payphones to time calls, that is our practice. It will be talked about in the rules. Don't think reconsideration at this time would be appropriate. We can't force the utilities to put in more phones. Belinda Anderson explained the law only says the initial contact. Commissioner Miller said this order wasn't a final order. Given fact that there are interim procedures, we just can't be changing our mind every day. Say concerns he raised is why we have raised this proceeding and this interim procedure is the best we can do. EXTRA ITEM - Call Trace. Discussed Company's proposal. Continue it until tomorrow at 1:30. Commissioner Smith asked about the petition for reconsideration of A. W. Brown. Asked if there was something in writing. Would feel more comfortable if it was in writing. Staff will convey that to the parties. Meeting adjourned. -12- DATED at Boise, Idaho this day of July, 1991. PRESIDENT COMMISSIONER COMMISSIONER ATTEST: Commission Secretary mjw 0044M