19910916.docx

Minutes of Decision Meeting
September 16, 1991 - 1:30 p.m.
In attendance:
Commissioners Joe Miller, Ralph Nelson and Marsha H. Smith and staff members Tonya Clark, Brad Purdy, Mike Gilmore, Don Oliason, Lori Mann, Gary Richardson, Jim Long, Jack Taylor, Scott Woodbury, Bev Barker and Myrna Walters.
Items from the September 16, 1991 Decision Meeting Agenda were discussed as follows.
1.  Regulated Carrier Division Agenda dated September 16, 1991.
Approved.
2.  Jim Long's September 12, 1991 Decision Memorandum re:  Robert Cefail and Associates American Inmate Communications Exemption Filing Case No. GNR-T-91-11.
Commissioner Nelson asked what the exemption was that they wanted?
Jim Long responded they only want the standard exemption.
Approved.
3.  UPL-E-89-11, letter from James Fell and letter fromOwen Orndorff - per Scott Woodbury.
Scott Woodbury said all it comes down to is the negotiation has fallen apart.  Jim Fell wanted a telephone conference which doesn't seem reasonable because some of the contract customers aren't represented by anyone.  So had suggested another prehearing conference.
Commissioner Smith said that was fine.
Commissioner Miller asked why if there aren't representative we have to have prehearing not just phone conference?
Scott Woodbury said there would be a notice problem.
Commissioner Nelson suggested sending notice of the telephone conference.
Scott Woodbury said 15 people are a lot for a telephone conference.
Commissioner Miller said perhaps official notice should be given.
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Commissioner Smith said you can officially notice a telephone conference also.
Scott Woodbury said John McFadden represents the majority (7) and Owen Orndorff represents the largest.  Three or four haven't been participating.
Commissioner Miller said there might be an advantage to having them here.
Decision was to have another prehearing conference.
4.  IPC-E-91-14, discussion regarding Oral Argument on Motion to Dismiss per Scott Woodbury.
Scott Woodbury gave the Commissioners the proposed findings.
Discussed ffs 1 - 5.
Scott Woodbury explained it was Numbers 1, 3, 4, 5 and not 2.  Made that distinction in the proposed order.
Commissioner Miller said we should make it clear that in this recast benefitting that rates won't change.  It will take a subsequent tracker case for rates to change.
Scott Woodbury asked - do we want to require company to make another filing or provide them an opportunity to provide further testimony?
Commissioner Miller said he thought they should have an opportunity to provide further testimony.
Scott Woodbury asked - after established date of filing by the company, set up prehearing conference?
Commissioner Miller asked - or can we just establish further filing dates?
Scott Woodbury asked - do we want to establish hearing date - make the company file its case, then provide time for discovery?
Commissioner Miller suggested prehearing conference.  Asked Scott Woodbury if it would be possible for him to confer informally with the other people about dates.
Scott Woodbury said concern of Idaho Power will be contractors will want to prolong because of existing rates.
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Commissioner Miller suggested a prehearing in case it gets out of hand.
Commissioner Nelson said if there are a lot of people, but open up intervention period and have prehearing conference.
Commissioner Miller suggested saying something in the order about company processing expeditiously, parties are.
Are we going to use this order to clarify what happens to rates when "trigger" applications are made?
Question is:  When trigger is filed, what happens to cogeneration rates?
Envision company filing application.  We wil review it  on the basis of supporting information whether to establish interim rates.
Scott Woodbury said company would have to ask for that type of procedure.
Commissioner Miller said he agreed with Conley Ward that it takes a finding to make a change.
Scott Woodbury said prior language does give Commission that authority.
Commissioner Miller said he thought it would be worth clearing up while we have a chance.
5.  Mike Gilmore's September 12, 1991 Decision Memorandum regarding FMC Complaint Against Idaho Power Company, IPC-E-90-22.
Page 27 Questions.
C.  Commission's decisions.
Commissioner Miller said his response to these questions was that the incorrect connection of the current transformer is not a meter error within the meaning of our Rule 15 or anything else.  It is simply not a meter error.  The meter rule is for errors in the operation of meters that occur from time to time.  2% is reasonable to allocate that between customers and it wasn't at all intended to cover improperly installed equipment especially when the equipment is not in any stretch of the term a meter (just a device that helps the meter work).  It is not meant to be covered by Rule 15.  Rule 15 is not applicable.  You don't have to
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worry about the 2% rule or 6 months rule then and that takes you back to the general reparation statute.  That is where he came out.
Commissioner Nelson said he came out just the opposite.  Thought that the rule would cover this because while the meter itself wasn't measuring incorrectly, the way it was set up caused an erroneous reading so there was meter error.  Look at that whole device as a meter because without the ratio box, the meter wouldn't work.  It was an integral part of the meter.  Did not think the totalizer was part of the meter, though.
Commissioner Smith said she didn't think it was a meter.  Seemed to her that in the ordinary average person's understanding of what a meter was, it wouldn't include the CT.  Either using an engineering standard or an ordinary person standard, this wouldn't fall under it, even though you look at the system as a metering system.  Guesed she came out where Commissioner Miller did; 2% or 6 months doesn't apply.  Average person reading that wouldn't apply it to the CT.
Commissioner Nelson said an average person thinks of a meter on the side of their house.  In that case you have the current going into the house, directly through the meter.  If you have current go directly through the meter here, you need additional equipment, a CT.
Decision:  2 to 1 - it is not a meter problem.
Commissioner Miller said even if you don't get involved in how much is a meter and how much isn't, thought the purpose of the rule was to address mechanical malfunction.  It was never intended to in effect insulate a utility from liability for human error.  It is an incorrect plugging in of wires.
Thought we don't have to get into the Commission customer relation rule testimony when that wasn't incorporated into the contract and we could just go to the reparations or overcharge statutes.  If you get there, then the period for which the liability applies is the 3 year rule of that statute.  Asked other commissioners if they wanted to detour around Rule 2.4?
Mike Gilmore said 2.4 was just an attempt to put it in plain language.
Decision was:  Skip around it and get to the statute.
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How much of anything is FMC entitled to recover?
Page 32 -
Commissioner Miller said 3 years of energy charges was okay.
Other Commissioners agreed.
Page 31 calculation was correct, numberwise.
Commissioner Smith asked about the $93,000?  Was it Baggs' number?
Mike Gilmore said yes.
Page 42 questions -
Commissioner Miller said he wouldn't give FMC anything for contract or billing demand portion, on the theory that they aren't really overcharged for that.  It would have been the same even if it was hooked up correctly.  They may have had some sort of claim that because of misconnection that they were misread, but that is different than an overcharge sort of claim.
EXCESS DEMAND.
Commissioner Miller said that was the hardest for him because it is a little more complicated from a factual point of view.
Commissioner Nelson said they made a lot of assumptions.
Commissioner Miller said everyone agreed it was a calculation and speculation.  Came to the conclusion it was too speculative to be able to award any figure with certainty and even though often times in ratemaking we have to make assumptions, there is a difference between ratemaking assumptions based on uncertainty and in effect where we are awarding damages, involuntarily.  That is different from ratemaking.  It is a retroactive damages case.  In ratemaking if you are wrong, you can always go back and face it, can't in this.
Commissioner Smith said she didn't think they should get their billing and demand.  There were just too many assumptions.  Think it is a good argument but when you get down to the actual calculation on refund, you are just never sure you are at a good number.
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Mike Gilmore asked - whats your requirement of certainty?  How do you respond to Peseau?
Commissioner Nelson said you could assume that they wouldn't have incurred x demand until they were over by 3 mw (there was a figure in there).
Mike Gilmore reviewed Peseau's testimony.
Don Oliason said if you are over 2 mw, you are over contract demand.
Commissioner Miller said the problem was that this is data gathered in 1991, without any showing that that data is reflective of the situation in the period at issue.  So it is just this calculation which to him is not founded on facts arising out of the hearing period.  Seems like you would have to start with facts for the period in question.
Mike Gilmore asked - what about Roethe's argument that none of this is available, it is Idaho Power's fault, not FMC.  Why should Idaho Power benefit when it was their mistake...better be prepared to meet that in the order.  It is Idaho Power's meter, they created the problem and they testified to uncertainty,a everything is in Idaho Power's pocket.
Commissioner Smith asked what the dollars were for this?
Mike Gilmore responded - $184,000.  Billing and contract were lumped together.
**Tom Faull was in attendance at this time.
Commissioner Smith said - if the utility makes an error they will refund is what she thought is the precedent we are setting.
Explained why.
Commissioner Miller said he thought the rule we are trying to apply is the quantification of the amount has to be done with a reasonable degree of certainty.  Don't think we are trying to say difficulties of quantification always lead to no refund.  On these facts the degree of certainty had assumptions, together with a number.
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Commissioner Nelson said all you would have to assume is excessive power of x mws.  Mills testified to the furnaces not running without the auxiliary power on.  It would seem that it was fairly certain there was excess demand that should have been charged for, and because you can't quantify it, aren't going to give the award.
Commissioner Miller said it is not just necessarily that.  We are only saying there has to be reasonably exact quantification.  Here where you take statistical quantification for period different from period in question, it is difficult for him to say that is a reasonable quantification of losses suffered during the time in question.
Commissioner Nelson suggested using 90% instead of 100 and base it that way.
Mike Gilmore said had FMC tried to pin down disputed numbers... try to tie it to a specific number, if I am Roethe and want to petition for reconsideration or appeal, if there is testimony that it was never shut off, at that point I would argue that Commission should pick arbitrary number.
Commissioner Smith said she would just like to do the best we can.  Don't think evidence supports what FMC wants us to find.  If Court tells us, we will do it, but right now, as far as getting to a number, don't know how to do that.
Commissioner Miller said maybe on reconsideration they can make him understand it better.
Commissioner Smith agreed.
Don Oliason said he had a complaint come in from an irrigation customer with a malfunctioning meter.  Idaho Power said we will estimate all last year and reduce it 20%.  It was for that one season, does that mean Idaho Power could not back bill in that situation?  Does that relate to this case?
Commissioner Smith thought not.
Mike Gilmore said his biggest concern is that this will be used for stonewalling.
Commissioner Miller said if case is on, it is on.  The facts of that case have to control that case.  There is a statute right for reparation, etc., each case is going to
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have to stand on its own facts, on quantification of the amount.  In this case it is impossible to say what the correct amount is.  That is the best we can come to right now.
Bev Barker said this isn't the first of these, it is just the large amount of money involved.  Company saw it as a contract.  She is concerned about the regular run of the mill situations.
Mike Gilmore said part of the discussion that troubles him is the next customer, you will never know what excess amount is but you will know it is always something.
Commissioner Nelson said he didn't think Mills' 90% testimony was disputed.
Mike Gilmore explained what both parties said.  Explained what Idaho Power would say on quantification.  
Commissioner Miller said that is the overall burden.  Said he would like to reread Peseau's testimony and Mills' testimony and see if he changes his mind and come back to this.
Interest on Energy Amount.
Commissioner Miller said he thought Commission could give them 12% interest for the entire 3 year period on the theory that the reparation statute says interest accrues from date of overcollection so thought as a matter of law,  that this is the day the money came due, the customer did not consent to the overpayment.
Mike Gilmore said excess demand - see zero as finding of law.  See any kind of factual determination ...their argument being absolutely bullet proof.  Think that would be much, much better to demand.
Commissioner Smith said she sees it as factual determination whichever way you go.  If we can't find evidence covering it.... don't have any problem at all saying they probably ran them all at demand and it added to excess demand, but there isn't enough data from the right time period.  Whether it is fair or not that FMC doesn't get anything due to the set of circumstances, is the question.  If the Court wants to give it to them, it is okay with her.
Tom Faull said it seems to him the only fact you know for sure is it is not zero and that is where you are.  Because you can't identify reasonably well what it is, are not going to give anything.  We know it is not zero and we know it is not 100%, but wouldn't it be better to pick absolute minimum?
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Don Oliason said he could go through the figures with Mike Gilmore to see if there is something quantifiable.
Mike Gilmore said you will know it is not zero but you will know it is something(that will be the rule on meter malfunctions).
Commissioner Miller said he keeps coming back to each circumstance being different and we may try quantification.  Don't have the sense about that number or anyother number in this case.  In setting rates, am happy to pick a number, think in damage case it is different from ratemaking.  Before anyone should be called to pay to anyone else, should be sure that number is reasonably certain quantification of what should be paid.
Commissioner Smith said she didn't see anything wrong with using that as a standard.  We should be dilligent about using that as a standard.
Interest:  12% agreed to.
Commissioner Smith asked what IPC's return on equity was?
**It was 12.25 in fall of '86.
**Three years at 12% was the decision.
Will go back to excess demand question.
6.  Letter from Tom Arkoosh dated 9-12-91 regarding UPL-E-90-4.
**Commissioners agreed to dismissal of the case, per request of Mr. Arkoosh - wil be dismissed without prejudice.
7.  Mike Gilmore's September 13, 1991 Decision Memorandum re:  Recent Idaho Power Letter for an Opinion Concerning Bonding for Reclamation Work for Bridger Coal Company.
Commissioner Miller said Mike Gilmore's draft response looked fine to him except for reference to publicly-traded.  
That will be taken out.
Other commissioners concurred.
8.  Stipulation of Boise Water Corp. & City of Garden City in Case No. BOI-W-91-2.
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Commissioner Smith said she didn't know why we wouldn't let Garden City in.
Why don't they just file something else.  Don't like two parties stipulating to have the Commission withdraw an order.
Lori Mann asked what the best way to remedy this was?
Commissioner Miller said we don't want to withdraw or rescind our order.  Tell Boise Water they should file a motion.  They could ask for reconsideration.
Commissioner Miller said there is no motion filed.  All they did was file a stipulation.  Could just have our lawyer write them and see if they want us to alter or ask for reconsideration.
**Lori Mann will write to Boise Water.
Commissioners will review letter.
9.  Discussion of the Oral Argument conducted September 13, 1991 - Case No. IPC-E-91-2.
Brad Purdy said you could categorize Idaho Power's Motion into :  (1) Its objection that some of the testimony relates to issues in '20 case and further break that down into the revised testimony and original testimony.
On original they argued some of it is '20 case, some of it is incomplete and third, it is categorically the testimony of July 11.
Commissioner Miller said he thought everyone finally came to the understanding that the reasonableness of .7% is not an issue in this proceeding.  If we were to change the overall amount of the interconnection cost, say it was $50 and we said no $40, the end result ... to the extent it is an issue in this case and Arkoosh claims that the only reason for mention in this case is if in the other case we say it is not right, in this case, want to use it for refund of maintenance cost.
Brad Purdy explained he is using this case to possibly reconsider for both cases.
Commissioner Smith said his argument is he wants refund of the whole amount.  Bart Kline was saying no, only .7 of the difference.
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Commissioner Miller said on the .7 thing, even if we decide that is the wrong number, prospectively, would be very surprised if we did make refund, because it is under an approved tariff.
Commissioner Smith said it would be prospective only.
Commissioner Miller said if we want to come to that conclusion, that would take care of part of this case.
Brad Purdy said he thought Arkoosh was going to argue that this case is his only vehicle to collect O&M...which will be determined in the other case.  He will continue to submit testimony.
Commissioner Nelson said it is going to be difficult to go back and order refunds.
**Went thru questions.
Commissioner Miller said on the first one would leave it in the record saying it primarily background that is the basis for some of the argument, but point out it is going to be decided in the other case.
2.  Commissioner Miller said - could knock out #2.  testimony is so detailed, Idaho Power would have to respond to it.
Commissioner Smith said she could go for that.
Brad Purdy asked - do you want to take any position at this point about him being entitled to refund and it being prospective?
Commissioner Nelson said he thought it was premature.
Commissioner Miller said we could make preliminary observation but don't think we should prejudge it officially.
3.  Commissioner Miller said - would leave it in and consider it in context.  It is part of his argument that he was charged too much.  It is part of his overall argument.  It wouldn't be fair to let someone go through someone else's testimony and take out a paragraph.
Commissioner Smith said her thought on that is he needs to be a little more specific than adopting all the testimony.  In that regard he should go page by page or line by line and set out what went with the other case.  Don't think he should sweep it all back in.
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Brad Purdy said you could say in terms of consistency, he has now filed new stuff and you can look at all of it.
Commissioner Smith said to the extent it speaks to overcharge, okay.  Think he should be more specific on what he wants in this case.
Commissioner Miller said at this point, don't let him incorporate all his prior testimony, but if there is some he wants in, he should make supplemental filing (new set of testimony that takes whatever parts of his old testimomy he wants).  
Discussed IPC's Objections on Pages 5, etc., of their filing.
Commissioner Smith said she didn't have any problem with Brown's testimony conflicting with Jewell's.  
Agreed to that.
No. 4 - Commissioner Miller said he thought it was a matter of weight.
5.  Commissioner Miller said he would knock that out.
**Agreed.
No. 6 - Page 14 - was weight question.
Page 15 0 No. 7 - take that out.
Adjourned at 3:20 p.m.
Continued on next page ................
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        DATED at Boise, Idaho this       day of November, 1991.

PRESIDENT

COMMISSIONER

COMMISSIONER
ATTEST:

Commission Secretary
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