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Decision Meeting Minutes
July 19, 1991 - 1:30 p.m.
In attendance:
Commissioners: Joe Miller, Ralph Nelson and Marsha Smith; staff members: Mike Gilmore, Randy Lobb, Gary Richardson, Brad Purdy, Tom Faull and Marjorie Maxwell.
Items discussed were 6 and 7 held from Thursday, July 18, 1991.
6. Brad Purdy's July 16, 1991 Decision Memorandum regarding approval of Water Service Agreement--Case No. EAG-W-91-1.
Commissioner Miller asked if the others understood surcharge was going to Boesiger and for how long. Commissioner Smith said contract was indefinite in terms of time--she believes that Boesiger has 120 lots; 9 of which are currently filled--maybe there are 140 lots.
Commissioner Nelson said his question is what will we do if we approve the interim rates and then the study finds there isn't enough capacity to accommodate additional load.
Randy Lobb said doesn't Eagle Water have to serve additional customers since it is in their certificated area. What if Eagle is undersized now and can't serve current customers adequately? Eagle Water is obligated to serve--what is the difference?
Commissioner Nelson said he saw difference between making them serve current customers and approving contract for future customers. Commissioner Smith said it is in their certificated area--what is Boesiger going to do if not served?
Randy Lobb said there is another developer in the area who has drilled a well and Boesiger will hook up to that--would you rather have him do that? I don't think Boesiger will pay for study and pay for new capacity without assurances he can get water.
Commissioner Nelson expressed his concern about what to do if study shows no additional capacity.
Randy Lobb said he thought there was no doubt that system could serve the current 9 additional lots; also believes there is no doubt that system cannot serve all 120 lots.
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Commissioner Nelson said he wants some assurance that we have a way out if study shows there is no more capacity.
Commissioner Miller said he was concerned if we approve on interim basis the wholesale contract and we wanted to disapprove later after people are hooked up and dependent on the system, and in the meantime Boesiger hooks up other customers, it seems as though we are giving Boesiger the advantage over other developers in the area. With this wholesale contract, does Boesiger get right to 140 customers?
Randy Lobb said any additions to the system would have to be on first come first serve basis.
Commissioner Miller said he worried that contract would allow Boesiger to get water and service and metering before anyone else was eligible.
Mike Gilmore said it would not if interim approval order were worded right.
Randy Lobb said he thought one thing for sure that system does not have capacity to serve 140. You are looking at 20-25% growth.
Commissioner Nelson asked if additional capacity could be added through reservoirs?
Randy Lobb said reservoirs would certainly allow company to meet current peak demand better.
Commissioner Smith said other option would be to put moratorium on homes being built.
Commissioner Miller asked again if wholesale contract was a way for Boesiger's subdivision to gain water rights.
Randy Lobb asked "Your concern is that he will tie up all rights?"
Mike Gilmore said we need to be specific at stating in the order that any customer in certificated area will be served on first come first serve basis until capacity is reached.
Commissioner Miller said if study reveals there is no more capacity, then what?
Brad Purdy said Eagle Water probably doesn't have capacity for 120 new customers, but company is obligated to provide service--an ordinary utility would raise capital and increase capacity by providing additional development within
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existing system or development within homeowners association. Are you going to pull certificate if he doesn't?
Randy Lobb said about only way for Eagle Water to raise capital is through a loan from a developer or through cooperation with developers--think there are 3 or 4 developers in the area. If system is marginal now, maybe he should be looking at some way to improve it.
Commissioner Nelson moved to approve the interim contract with some qualifying language on first come to system first serve, and let the study go forward. Others agreed.
Commissioner Miller asked why there is a surcharge for a hook up fee. Why should I have to pay for utility service hooked up to my lot--shouldn't that be included in cost of lot?
Brad Purdy said that Boesiger is putting up the money since Eagle Water doesn't have the financing otherwise and this surcharge will allow Boesiger to recoup his costs.
Commissioner Smith said Boesiger is saying I am willing to put up front money, but I need some way to get it back. This is something the utility should have done.
Mike Gilmore said if Eagle Water were acting as a utility it would already have done engineering study and have plan in place for additional customers. Developer should get his money back.
Commissioner Smith said about only other choice is to decertify Eagle Water.
Commissioner Miller said he didn't have a real problem but it doesn't seem like a reasonable charge to add on a surcharge to the customer.
Randy Lobb said another way to look at it is the costs of getting water to that subdivision is normally rolled into cost of lot. It seems a more reasonable way to look at it.
Commissioner Miller said he saw Marsha's point but the cost should be included rather than separated out.
Mike Gilmore said this is just a cost of doing business and every customer benefits from it.
Brad Purdy asked how does every customer benefit?
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Randy Lobb said if you have a good basic study done it will show where most cost effective improvements need to made.
Mike Gilmore said if it is a good study it will point out ways to improve entire system.
Commissioner Miller said we would like to allow recovery.
Randy Lobb said that Boesiger can't force a ratecase.
Commissioner Miller said we should tell him we will raise rates enough next time to pay him back. I don't see much choice, but I don't like this much.
Commissioner Nelson said Boesiger is at risk--he doesn't receive money unless and until additional people hook up.
Commissioners voted in favor of $100.00 surcharge.
Commissioner Smith asked that language be put in the order to soothe Keith Stoke's feeling--say we appreciate his participation and this is not precedential for wholesaling water.
7. Brad Purdy's July 16, 1991 Decision Memorandum regarding WWP-E-91-1 in the Matter of the Petition of Washington Water Power Company for Approval to Conduct an Experimental Bidding Program.
Commissioner Miller asked for a vote on each of laid out options:
(1) none
(2) none
(3) none
(4) all three raised hand.
Commissioner Miller said Tom Faull can give our rationale!
Commissioner Nelson: I thought arguments raised don't justify the need for Idaho to go along in order for them to conduct business in Washington.
Discussion continued on rationale for deciding on 4 (retain our current system of resource acquisition under administratively determined avoided cost rates).
Commissioner Nelson said he would rather reject proposal than modify it.
Commissioner Miller said it would impose another set of rules, but allowing our system to proceed won't impair their ability to test theirs out.
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Commissioner Miller said it appears this is another way of not accepting our decision and a way to get around our avoided cost decision. Commissioner Smith said she did not want to say that others agreed. Discussion regarding 10 megawatts role and negotiation process. Commissioner Miller believes commission needs to direct attention to 10 megawatt rule.
Commissioner Miller asked if Owen Orndorff had talked about the coal plant he has--Owen called him other day. Owen can tie plant to coal mine that is there; can use low grade or reject coal and wonders if we want to look at it. Mike Gilmore asked about clean air or are these guys exempt; if so utilities can buy; thinks Owen best get some emissions testing and set up for scrubbers; will have Owen call Tom Faull. Tom Faull wanted to know how to discuss this since they enter into contract with utility on their own. Commissioner Miller said they enter on own free will.
Meeting adjourned at 2:25 p.m.
DATED at Boise, Idaho this day of September, 1991.
Respectfully Submitted
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Marjorie Maxwell
Assistant Commission Secretary
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