19911119.docx

Minutes of Decision Meeting
November 19, 1992 - 1:30 p.m.
In attendance were:
Commissioners Marsha Smith, Joe Miller and Ralph Nelson and staff members Mike Gilmore, Scott Woodbury, Brad Purdy, Jack Taylor, Gary Richardson, Birdelle Brown, Tonya Clark, Bev Barker and Randy Lobb.
Items from the November 19, 1991 Agenda were discussed as follows.
1.  Regulated Carrier Division Agenda dated November 19, 1991.
Commissioner Nelson moved approval.
Commissioners Smith and Miller agreed.
2.  Jim Long's November 12, 1991 Decision Memorandum re:  U S West Advice No. 91-7-N - Allows Customers the opportunity to self report the percentage of intrastate use of their terminating FGD services.
Commissioner Nelson said it looked okay to him.  
Commissioners Smith and Miller agreed.
3.  Lynn Anderson's November 15, 1991 Decision Memorandum re:  GTE Advice No. 91-15, Adding Basic Calling Service (LMS) in Several Exchanges.
Okayed unanimously.
4.  Mike Gilmore's November 8, 1991 Decision Memorandum re:  Recent FCC Action Adopting Federal Rules for Pay-Per-Call Services.
Was mentioned that the Attorney General is taking up a bill.
Commissioner Smith said she thought Commission could answer no, we don't have an interest.  If Mike Gilmore thinks later we have an interest, okay.  In the meantime, see what happens with the AG's bill.
Agreed.
5.  Randy Lobb's November 12, 1991 Decision Memorandum re:  Customer Complaint Questionnaires on Hayden Pines Water Quality.
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Commissioner Nelson said we addressed this very strongly in the last case.  It appears that Mr. Ford is doing what he can on this within reason.  Can understand not wanting to spend money on a solution.  Did make sense to find out what this procedure costs.
Randy Lobb explained sequestering.
Commissioner Nelson said he wondered if he isn't running water from the dirty well.
Randy Lobb said DEQ and Bud Ford say he is not.
Commissioner Miller asked Randy Lobb if he talked to the customers, and what was their temperature?
Randy Lobb replied they are tired of it.  It is a real annoyance to them.
Commissioner Miller said from a standpoint of appearing to be responsive and since there is a legislator involved, is there something we could do more than just waiting until summer and looking at it again?
Commissioner Nelson asked if Commission could find out what this program would cost?
Randy Lobb said he thought finding out the cost would be a reasonable step at this time, but just getting a cost estimate won't do much for the customers.  Customers do notice chlorination.  He could do more of that.  He says he has regular schedule of flushing.  Maybe more fixed schedule plus chlorination would help.  He says he is going to send out a news letter to his customers.
Commissioner Nelson said he would like more information about how much this sequestering costs.  Does Boise Water like it?  Wouldn't mind a surcharge if it solves the problem.
**Terri Carlock, Don Oliason, Lynn Anderson and Dave Schunke were in attendance at this time.
Randy Lobb commented he didn't know exactly what the problem is.  Hiring a consultant would be a start.
Commissioner Miller said we haven't required a formal response.  Maybe that could be the next step, something in the nature of a show cause.
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Commissioner Smith asked what the complaint questionnaire was?
Randy Lobb explained.
Commissioner Nelson said that is quite a few customers responding.
Dave Schunke reported on his conversation with Representative Chamberlain.
Decision:  Treat it as a formal complaint - send a summons.
Commissioner Miller suggested a press release be done to show something feasible is happening.
Commissioner Smith said we might want to call Mr. Ford and tell him something is coming.
**Send a letter to Representative Barbara Chamberlain telling her we are making it a formal complaint and will let her know the response.
**Order should be issued requiring summons be issued and identify particular concerns in it.  Do more than a standard summons.
6.  Scott Woodbury's November 12, 1991 Decision Memorandum re:  Case No. WWP-E-91-4 - Power Sales Agreements Empire Lumber & Regulus Studmill Section 4(d) Regulatory Out Language.
Scott Woodbury explained that everything was approved in these contracts earlier, except Section 4(d).  This filing is the result of negotiations.  There were a lot of concerns the way it was worded.  Think the way it is worded it pretty much gives a right of first refusal to the utility if the developer wants to sell the output again.  Explained what it addressed.
Commissioner Nelson said he would accept the contract as amended.
**Approval will be recorded by Minute Entry.
7.  Brad Purdy's November 15, 1991 Decision Memorandum re:  Application of Island Park Water Company for a Certificate of Public Convenience and Necessity.  Case No. GNR-W-90-1.
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Commissioner Nelson asked about the customers that opted out with wells?  Questioned the 13 people that had left the system taking one of the wells.  Think the general adequacy of the system should be discussed.  Don't think there was enough testimony to determine adequacy of the system.  There were real questions.  There were no pumphouses to protect the wells.
Commissioner Miller said the question he had was the next one.  Do we really have to regulate these guys?  Do we have to give them a certificate?  Can we find they don't have management interested in performing duty of utility and inadequate system, can we not regulate them?
Commissioner Nelson said commission could but we would leave the customers high and dry.
Commissioner Miller said he was not convinced we can end up with a better result for these customers than they can get on their own.  It is a horrible system and we can't make it better ourselves.  Can't depend on Strobel either.
Commissioner Nelson said he thought in his mind that we should set the rate, open a case to determine adequacy of the system and hire a consultant to do that and then order the improvements and if they are not done, see what options are available to us.  Don't think we can certificate him without going through those additional steps.
Brad Purdy said Strobel is going to be out of the picture next year.  
Commissioner Nelson said his thought is, they paid $700 a hook-up and still have a contractual obligation for an adequate system and it is a question of who enforces that contract.  Would appreciate some feed-back on that.
Brad Purdy said if they want to enforce their contract, that is a matter outside PUC regulation.  What we can do is once we step into the picture, we can say this is the way it is going to be from here on out.
Commissioner Nelson said Commissioner Miller is considering telling the people this is not an adequate system to regulate.
Commissioner Miller said they have these contracts and they have rights within that relationship and if we regulate them, and it nullified that relationship, maybe we should just say you have your existing legal relationship, you chose the developer ...
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Brad Purdy asked if Commissioner Miller would feel uncomfortable since Strobel was already told to come in, that they were a utility.
Commissioner Smith said they are providing water for compensation, how can you say they don't fall within that definition?
Commissioner Miller said they refused to do their duty.
Commissioner Smith said we can't decline to do our duty.
Mike Gilmore asked - wouldn't that come back to haunt you?  You can envision all kinds of situations where utility service has been given and say it it contractual.
Commissioner Nelson said he thought it was politically unacceptable.  Those people go out there and buy that property just on blind faith that everything he said would be done, would be done.  People loose their objectivity when they are buying land, cars, etc.
Gary Richardson asked what would happen if you gave certificate, order upgrades and he doesn't do it?
Jack Taylor said he is only a part owner.  
Commissioner Nelson said the only reason people haven't taken the system is because he hasn't done the contractual improvements.
Randy Lobb commented about Buffalo taking over their part of the system.  They are interested in getting back under regulation.
Brad Purdy said they are refusing to accept the deeds until he fixes them up the way he was supposed to.
Jack Taylor explained their contracts.
Commissioner Miller said the alternative is we would have dissatisfaction now or dissatisfaction later.  There will not be quality of service, they will not like the rates.  They will be totally dissatisfied.
Commissioner Nelson said he guessed he wanted to see further down the road how they can be made right.
Commissioner Smith said the key words are "for compensation".
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Brad Purdy said maybe he simply intends to give it to them next year.
Commissioner Nelson said he liked the theory of saying you can't charge for compensation until the system is right.
Terri Carlock said Mr. Strobel has collected more than he has spent.
Commissioner Smith said we can penalize him monetarily but don't think we can not do something.
Commissioner Nelson said unless we define what is inadequate, don't think ....
Randy Lobb said we don't know what is out there.  You can see the pumps, but you don't know what is in the ground and how it works.  The plats aren't what out there.  It is impossible to testify as to what is there.
Commissioner Nelson said there are some general things:  wells aren't covered, there is no control over whether or not they are operating adequately or not, need security at the pumps, have no idea if the pressure is adequate.
Commissioner Miller said he would like to go through the numbers and come back to this.
Pages 5, 6 and 7 of decision memo.
Discussed insurance expense.
Commissioner Miller said he had put down $l,000.
Commissioner Nelson took labor figure times .5%, for $280.
Page 8 -
Unemployment insurance.
Brad Purdy is to check on the amount.
Decision:  $1,000 to cover payroll tax and workmans comp.
Liability insurance.
Page 9
Office supplies.
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Bookkeeping services - discussed the number.
Commissioner Nelson explained his calculation.
Commissioner Smith asked if that is all she does is do the billing?
Response was affirmative.
Discussed giving them $2,000 for the package.
Jack Taylor explained his $1,600 figure.
Commissioner Miller asked - do you want accounting to be done?  Should allow enough money to assure it gets done.
Commissioner Nelson suggested $1,500.
**$1,500 total for accounting and bookkeeping.
Discussed management fee.
Commissioner Nelson said he gave him $1,500 - $2,000 for on-site.
Decided on $2,000 management and $2,000 on-site.
Electrical repairs.
Commissioner Nelson said he wondered if this was a capital expense?
Jack Taylor explained.  When he says that that covered diagnostic, it would be maintenance.
Commissioner Smith said she gave him zero on electrical repairs.
Commissioner Miller said he gave him what was requested.
**Gave him $800.
Commissioner Nelson said less fuel, etc.  $4,250 - thought backhoe expenses is in current.  Thirty hours for road grader and dump truck are high.  4,000 miles at .28 a mile.  $30 an hour should cover everything.
Commissioner Miller had $2,0000.
Commissioner Nelson said any number is arbitrary.  Decided on Commissioner Nelson's number.
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Allowance for uncollectables will have to be changed.
#Take 5% of total billing.
**Left Island Park matter and went to Item 8 - Eileen Benner's November 15, 1991 Decision Memorandum re:  GTE-T-91-4; GTE's Tariff No. 91-12 for Authority to Combine the Two End Office Switching Rate Elements
Commissioner Smith said she was still where she was when it came in, offices that have not yet been converted have 2, others have 1.
Commissioner Miller asked - what about MCI's argument that even in equal access offices, there are still differences in service quality that justify rate differential and General is incorrect when they say that quality of the service under any groups has become equivalent.  Even in equal access offices, there is this disparity.
Commissioner Nelson asked if he is talking about extra digits, quality?
Commissioner Miller said extra digits.  Said there is the staff point that keeping the rate differential will provide an incentive to get fully convened although that cuts against Dialnet saying there is a benefit to having divergent... they can provide the service some people want at a price less than Feature Group D.  
Commissioner Smith said Dialnet argument made her wonder if moving toward equal access is wrong, but we will never go back.  When an office is converted, you have same rate.  Equal access road is the one we are on.  Staff's argument to provide any incentive is why I would leave the two tier rate for offices not yet converted.
Commissioner Miller asked - what about hybrid rather than flash cut until '93?  That would move from 81 to 96%.
Commissioner Smith asked about GTE's argument.  If we tried to change it, they couldn't.
Eileen Benner said this makes it a little harder to figure out.
Commissioner Miller said on a percentage basis, if you do it all at one step, what is the percentage?
Eileen Benner responded - rate is 3.2.  They propose to take it to 3.8.  Explained why FCC moved so quickly.  Explained U. S. West going to consolidated element.
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Commissioner Nelson said if standard is equal access, discouraging A&B makes sense.  We are being steam-rolled.
Commissioner Smith said it is coming from the feds.
Commissioner Nelson said he thought Commissioner Miller makes a good argument as long as you offer A&B you give people choice.  Always thought there was an inferior choice.  Don't have that much sympathy for it.
Commissioner Miller said ultimate thought is that one rate offered by more providers is what you should encourage.
Three Commissioners agreed to Commissioner Smith's proposal.
Discussion went back to Island Park Water Company matter.  Discussed yearly rate.
Decided on $124 per year.
Went back to the adequacy of service question.
Commissioner Smith said we are giving him this money.  We expect adequate service.
Commissioner Nelson said he will have to make capital improvements then.
Jack Taylor said he did say everything from here on will be in rate base.
Commissioner Miller said if these people don't feel its adequate, they can sue.
Commissioner Miller said his question is what is the continued status of these contracts?  Legal relationship now is regulatory relationship, not contractual goes through commission and tariffs.  What are the continued rights of the contracts?
Commissioner Nelson asked - do you think regulation has wiped those out?
Mike Gilmore said he would argue that those contracts were never enforceable.  
Commissioner nelson asked if he would make that same finding if we didn't regulate?
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Jack Taylor said if you set the rate you are abrogating the contract.
Brad Purdy said he could research the contract law.
Commissioner Smith spoke to contracts being meaningless after tariff is filed.
Mike Gilmore said what you are really saying is these contracts were displacing utility regulation.  
Property tax - proposed figure is $220.
Rate per year will probably come out at $125.
Meeting adjourned.
Dated at Boise, Idaho, this 28th day of January, 1992.
Myrna J. Walters
Commission Secretary
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