19911101.docx

MINUTES OF DECISION MEETING
November 1, 1991 - 2:30 p.m.
In attendance:
Commissioners Marsha H. Smith, Joe Miller and Ralph Nelson; staff members Lori Mann, Belinda Anderson, Gary Richardson, Stephanie Miller, Mike Gilmore, Tom Faull, Tonya Clark, Terri Carlock, Lynn Anderson, Birdelle Brown and Myrna Walters.  Also in attendance was Woody Richards.
Items from the November 1, 1991 Agenda were discussed as follows.  
1.  Eileen Benner's October 30, 1991 Decision Memorandum re:  U S West Tariff Advice No. 91-8-N.  Addition of Toll Denial service to PNB's intrastate access tariff.
Commissioner Nelson moved approval of the tariff advice.
Other commissioners concurred.
2.  Lynn Anderson's October 31, 1991 Decision Memorandum re:  U S West Advice No. 91-5-S, Case No. USW-T-91-8.
Commissioner Miller asked what Lynn Anderson's problems were?
Commissioner Smith explained it was discriminatory and there was a notice problem.
**Will need an order.
Commissioner Miller asked Lynn Anderson about the filing, what were the problems he wanted worked out?
Lynn Anderson said most of the problems were in the initial proposed application.  Have now cleaned up the tariff.  In prior tariffs they didn't have that there would be any notification to the Commission.  Got that to 15 working days now.  In original application wanted to waive hook-up charge for additional line.  They don't want to extend that and they couldn't explain why.  Don't have any information on held orders which he estimates would be 30% being held.  Thought that would smoke them now.  Still didn't offer information.  The short of it is this tariff is okay.  It only gives a week less then current 30 days and we can look at each proposal as they file it.  Hope they will give us more information as they file.
Okayed.
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3.  Terri Carlock's October 31, 1991 Decision Memorandum re:  Citizens Utilities Company $250 Million Debt Securities Issue, Case No. CUC-S-91-3.
Commissioner Nelson commented he had no problem with this.
Approved by all three commissioners.
4.  Terri Carlock's October 31, 1991 Decision Memorandum re:  PacifiCorp Debt Amendment up to $l,l50 million, Case No. PAC-S-91-1.
Commissioner Nelson asked if it was to finance common out or will it be additional?
Terri Carlock replied she thought it would be additional. This was for refinancing.
Commissioner Nelson questioned the wording in the third paragraph of the decision memo.
Terri Carlock said that is a general statement if they don't have specific use for it.
Application was approved.
5.  Dave Schunke's October 29, 1991 Decision Memorandum re:  Case No. UPL-E-91-2.
Commissioner Smith said apparently no one disagrees with the way staff wants to do this.
Dave Schunke said that was right.
Commissioner Smith proposed doing it the way staff suggested.
Approved.
6.  Letter from Phillip H. Robinson, Attorney-at-Law re:  Hope - Clark Fork Service Area - PPL - Case No. PPL-E-90-1.
Scott Woodbury suggested it should not be connected with the old case number but should be handled informally now.
**Don Oliason and Rose Schulte were in attendance at this time.
Commissioner Nelson asked them if they had looked at this area?
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Don Oliason responded.  Said they have done some tree trimming (company).  It is the wind storms that cause the outages.
Commissioner Nelson said he was asking specifically about the Gow connection.
Rose Schulte said he had the complaint to begin with from George Gow, after the major storm.  Discussed with him, his complaint about company attending to his line responsively.  They failed to walk the length of the branch off the feeder which serves Mr. Gow.  He said the crews did not tend to that, therefore it caused another days outage.  If they had paid attention, they would have found the downed trees.  He said that is just one of the problems.  Says the only way to get rid of the problems is to place the line on the road - thought company should address that.
Gow says it is not going to work and it should be changed.  Suggested to have the new local improvement districts law.  Sent him HB 207.  Perhaps that was the way to go to get that line underground.  It is very heavily timbered.
Commissioner Nelson asked about motor access on this?  It seemed like this wasn't a long strip of line.
Don Oliason said part of the problem is they brought in extra crews from Washington - transmission was out.  If they had cleared the trees on the branch line there still wouldn't have been electricity.  They prioritized their work.  Thought he needed to talk to the manager and get more details on the outages.  Thought part of the problem was WWP.
Commissioner Smith said she would recommend informal process as opposed to formal complaint.
Scott Woodbury said he thought it was a preferable way to go.
Commissioner Smith asked Don Oliason if more staff work needed to be done before it goes formal?
Don Oliason indicated further information was needed.
Commissioner Smith said she thought we were at the point of requiring the company to respond.
**Decision was to go formal - do summons.
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7.  Firm Energy Sales Agreement between Idaho Power Company and Marysville Hydro Partners for Falls River Hydroelectric Project submitted October 28, 1991 - IPC-E-91-20.
Scott Woodbury said everything is fine now.  New twist is they have to go through Fall River Rural Co-op and BPA.  Just meant throwing in a couple of lines transferring entities to entities.  He suggested we do it by minute entry.  Think that meets with approval of the parties.
**Added Horseshoe Bend also.
Said it was a compliance filing.  They have made the insertion.
Commissioner Miller asked Tom Faull if he had looked at these?  Asked if there was any reason to give him and Scott Woodbury more time to look at them?  Since we are not going to be meeting for sometime, have no problem with them.
Agreed.
8.  Lori Mann's October 31, 1991 Decision Memorandum re:  Falls Water's application to extend its area of service:  FLS-W-91-1.
Commissioner Smith said they don't need a certificate.
Mike Gilmore said he can understand why they are a little unsure.
Dave Schunke explained the application - he has reviewed it.  Falls Water did not initiate it.  County is applying pressure to have them serve.  It is a certificate filing but think they are asking - do you want us to take on service to this area?
Commissioner Miller asked if there was any probability we would deny the certificate expansion?  Obviously if they start serving, it grants the application.  
Keith Hessing said he thought Jack Taylor wanted to get more information, but county wants them hooked up by the third week of November.
Okayed Falls Water.
9.  Lori Mann's October 31, 1991 Decision Memorandum re:  Potlatch Telephone's Application for a rate increase--Case No. POT-T-91-2.
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Commissioner Nelson, the case chairman, led the discussion.  Said it was an uncontested rate case.  Was presented to the Commissioners.  Think only a couple of issues were not agreed to.
Company and staff agreed on test year.  Used year end rate base.
Commissioner Miller asked - is it the Commission's usual practice to use actual or year-end?
Commissioner Nelson said usually year-end.  These were unusual circumstances.  If we went with average would almost have to come in with another rate case.
Commissioner Miller asked - have we done that in the past?  Anytime there was a big expenditure...are we seriously departing from a practice...?
Commissioner Nelson said he thought we could justify it on known and measurable.
Stephanie Miller said we did it for Idaho Power company.
Mike Gilmore expanded on what happened on Valmy II.
Commissioner Miller asked Stephanie Miller if she had looked at it?
Stephanie Miller said she had.
Commissioner Nelson said ratebase is not there but NECA may reduce it.
Syd Lansing made some adjustments to company application.
Page 3 - #2 Adjustment.
Question on Page 3 - Yes.
Decrease of $11,000 in depreciation expense.  Company accepted Syd Lansing's adjustment for this case.
Commissioner Miller said depreciation expenses were fine with him.
4.  Income Taxes.
Company caved in on this.  If this is staff's position, think it will be an issue in other cases.  Should mention it is not precedential.
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Commissioner Miller said it wasn't clear to him what the real answer was if you had to consider it in a fully-integrated case.
Commissioner Nelson said it is an interesting question.  Would like to see some background on it in a case.
Commissioner Smith asked - Commission is accepting it because it is uncontested?
Commissioner Nelson said yes.
Question on Page 8 -
There was a necessary increase in operating expenses.  Set out in fifth adjustment on Page 8.
Back to ITC - Page 7.  There are two choices.
Syd Lansing chose one and the company did not disagree.  Don't think it was detrimental to the company.
Discussed why it was advantageous to the company.
**Judy Stokes was in attendance at this time.
IV.  Rate of Return
Company and staff agreed that on actual capital structure, 90% long term and 10% common equity.
Staff did not object.
They have agreed on 13.15% return on common equity.
Commissioner Miller asked - does the trend in interest rates affect your judgement at all?
Commissioner Nelson said it might if we were talking about 30% equity in the company.
Woody Richards said it is the capital structure of the subsidiary.
Commissioner Nelson said in the GTE case staff proposed using equity of the parent company and here they are using the subsidiary.  Don't know if that results in lower overall than using parent.
Terri Carlock commented you are using stand-alone for everything else.
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Commissioner Nelson said you might have an interesting case if the tax issue was contested.  Don't want that tax issue to be precedential.
Mike Gilmore explained there are two camps.  
Commissioner Nelson said he is not saying he would decide differently if the issue was before us.
Commissioner Miller said your point is the amount of common equity is so small, it wouldn't be a problem since it is a smaller dollar amount.
Commissioner Nelson said 25 basis points won't make a difference here.  We don't have any study to back up any other decision except the settled amount.
V.  RATE DESIGN
It is not disputed by the company.
Commissioner Miller said his only question was on toll access rates.  Under Belinda Anderson's proposal they moved  up 22%.  What would the company have moved them up?
Lori Mann said company would have raised it up $14,000 and Belinda Anderson's was $35,000.
There was no statewide USF used.
Payphones - to 25¢.
Discussed custom charges.
Commissioner Miller said on toll access rates, guess it is reasonable.  Have to start thinking about loading up these access rates.
Commissioner Nelson said it we think generally access rates are too high ..
Commissioner Miller said that is why toll access rates are definitely a contributor.
Commissioner Smith said they are what is keeping out a long term provider.
Commissioner Miller said it is something to think about for other cases.  This probably isn't the case we want.
Commissioner Nelson said statewide average has to be driven by U. S. West.
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Questions on Page 12.
Decision:  Should we accept rates as proposed by staff?
Eliminate touchtone and mileage?
One Party service?
Commissioner Smith asked - they were given notice that they needed to switch and they would be paying extra?
Woody Richards replied yes.
Approved rates as proposed by staff, eliminated touchtone and mileage charges and granted one party service.
Commissioner Nelson suggested a pat on the back for good customer relations but there are portions of the tariff to be worked on.
Meeting adjourned at 3:15 p.m.
Myrna J. Walters
Commission Secretary
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