19920113.docx

MINUTES OF DECISION MEETING
January 13, 1992 - 1:30 p.m.
In attendance were:
Commissioners Marsh H. Smith, Joe Miller and Ralph Nelson and staff members Mike Gilmore, Don Oliason, Judy Stokes, Brad Purdy, Gary Richardson, Stephanie Miller, Birdelle Brown, Bev Barker, Randy Lobb, Madonna Faunce, Jack Taylor, Jim Long, Terri Carlock, Tonya Clark, Dave Schunke and Myrna Walters.
Minutes of the January 13, 1992 Decision Meeting were taken by me and transcribed as follows.
Items considered at this decision meeting were the following.
1.  Eileen Benner's January 8, 1992 Decision Memorandum re:  U S West Advice 91-10-S; filed 12-31-91 to be effective 2/1/92.  Trouble Isolation Service - Clarification.
Approved.
2.  Terri Carlock's January 10, 1992 Decision Memorandum re:  Idaho Power Company Guarantee for Long-Term Notes to be issued by Milner Dam, Inc - Case No. IPC-E-91-26.
Approved.
3.  Brad Purdy's January 8, 1992 Decision Memorandum re:  PPL-E-91-2, UPL-E-91-4.
No comments were received.
Discussed Brad Purdy's proposed order cleaning up language.
Commissioner Miller asked what the decision was before on what they wanted and how far Commission was willing to go?
Commissioner Smith explained it was acquisition adjustments.  Were told when they seek rate treatment, Commission will look at them.
Brad Purdy said they wanted to be told they won't automatically be disallowed this adjustment.
**Commissioners won't prejudge them either.
**Bill Eastlake was in attendance at this time.
Top of Page 8 of the proposed order summed it up.  Said
might be applied, but not automatically.
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Commissioner Miller said he thought it was adequate.
Brad Purdy said staff is comfortable with this language.
Approved.
4.  Brad Purdy's January 10, 1992 Decision Memorandum re:  Case No. UPL-E-91-5.
Decisions to be made were set out on Page 5 of the Decision Memorandum.
Commissioner Smith said she wondered why Mr. Edwards was all worked up about Mr. McClure's problem.
Judy Stokes explained her conversation with Leland McClure.  Says he is disabled and he can't afford to pay the damages.
Commissioner Smith said fortunately that is not a decision the Commission gets to make.  He is on his own.
Judy Stokes explained to Leland McClure that the Commission didn't have any jurisdiction over this matter.
Commissioner Smith said it appears all commissioners agree that Mr. McClure's backhoe matter is out of our expertise, let alone jurisdiction.
Quality of Service Question.
Commissioner Miller said it was hard to get very motivated about this.  Don't really know anything about the quality of the lines.  Do know the territory is awfully rugged.  Can't expect same quality as Pocatello.
Don Oliason reported they only had three outages in two years.
Commissioner Smith said it appeared to her that they have practically rebuilt the whole town.  Asked if after this year won't it all be done?
Don Oliason replied it would.
Commissioner Nelson spoke to fluctuations.
Don Oliason said there was discussion on surges.
Brad Purdy said they are saying some contractor said there were a lot of outages.
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Commissioners said to find that the answer of the company is conclusive that service is reliable and completion of the line will solve problems.  One unplanned outage in 2 years seemed good.
Commissioner Smith said would need more evidence on surge damage.
5.  BOI-W-91-2 - Amendment & revision of Certificate No. 143 of Boise Water Corporation.
Commissioner Miller said he thought Commission could discuss the matter without a decision memorandum.  Think easiest way to discuss it is to divide the territory into three regions.  Issue is that different parts of the proposed additional territory could be different.
Looked at Exhibit 2.
(1)  Landover Subdivision.
(2)  Area west of Gary Lane and Bogart Lane.  Area west of the subdivision; that area being outside Boise City limits but inside Boise impact area and for all intents and purposes served by no one at this time.
Third area would be the area generally west of Pierce Park and east of Gary Lane.  It is different from the other two areas in that it is in the city limits of Boise and to a very large degree presently and fully served by Garden City municipal water system.
Each of those areas has some differences as compared to the others.  It may be that we will conclude the differences are material for Commission decision but for discussion, did recognize they are 3 different areas.
(1)  Landover Subdivision.
Commissioner Miller said his view is that the important factor is it is within the city limits.  It has been annexed into the City of Boise, Boise Water has franchise to serve it; entitlement of Garden City in that area but petition within franchised area of Boise Water.  From second point of view, Boise Water has the capability to provide adequate and reasonable service.  With respect to that area, that appeared to be the easiest of the three.  Certificate should be granted with respect to that area.
**All three commissioners agreed to that.
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Second area is west of Gary Lane, west of Bogart.  Would come out at the same place for about the same reasons but it is not within the city of Boise limits but is within the impact area.  With respect to that area, local authorities acting through their lawful authorities have determined that that area should or will be part of the City of Boise.  Boise Water has franchise and ability to do it.  Come out at the same place on that for about the same reason.
**Agreed.
Commissioner Nelson said they also have the franchise from Ada County which extends their legality.  Thought on that 1300 ft. that runs from that area west of Gary Lane that staff recommended be part of Garden City's area, thought it probably was a reasonable settlement offer but since settlement discussions don't bear fruit, can't see putting restrictions on Boise Water Corporation because we don't have authority to put any restrictions on Garden City and think unless that down the road will become part of Garden City that those people will be better off served by the regulated utility.
Lori Mann asked if there was one subdivision west that Garden City has been asked to serve?
Randy Lobb said he thought it was not an application as such.  It is just in the planning stage.
Commissioner Smith said she tried to develop a sense of empathy for Garden City's placing all the money in this system that had excess capability, but a lot of the expansion of the system was done after '83, after areas of impact had been decided, it was not prudent on their part to oversize a system that was not in their area of impact.  So wasn't able to develop much sympathy for their belief that they ought to have a right to serve it because they have a system in place.  Think as to this area, the two turning points were:  Lot of investment was made after '83 after they knew it was not in their area of impact and (2)  They had deliberately oversized their system and there was not excess water.
Commissioner Miller said he didn't think Commission should make any finding about Garden City being in this area.
Whatever their legal rights are thinking they are inferior to Boise Water rights.
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It would require the consent from both parties and even if there was consent, question of whether or not it would be investment over time and in the absence of consent it was not enforceable.  It was a nice equitable try that won't work.
Lori Mann asked why Boise Water's consent would be needed?
Commissioner Smith said they would be giving up a property right.
Mike Gilmore said under 61-527, Commission took a real strong position that to the extent you are talking about, franchises can be deferred to but they are not bound by.  Hope the order would be in deference to them by not treating them on par with their own orders.
Commissioner Miller asked what those cases are in context with?  What was the nature of the dispute?
Mike Gilmore explained.  
Commissioner Miller said - can't deprive Commission of ratemaking authority by entering into a franchise.
Mike Gilmore said it was all Commission authority.  Municipality by an ordinance or resolution couldn't expand a public utility's certificate beyond this Commission's authority.
Commissioner Smith said existence of franchise is a piece of evidence.
Don't have to give them a certificate because they have a franchise but it is one important factor.
Commissioner Miller said especially when you put that together with local plan.  It is clear that the City of Boise through its franchise tends to meet its obligation through this franchise and for us to interfere with that planning process, should be avoided.
Mike Gilmore said it is a factual factor, not a legal factor.
**All three commissioners agreed Boise Water gets certificate for the first two areas.
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Area 3.
Commissioner Miller said the critical distinction here is that Garden City is there and providing adequate service.  There was some question of the adequacy.  But for the purpose of our decision, we can find that the service is adequate.  Challenges to adequacy were pretty second hand and had no direct complaints of anyone being served there asking to be served by anyone else.
Boise Water alleges that the fact that they are there is irrelevant (Garden City).  Quoted Boise Water's testimony.  Another reading of the statute takes into account the amendment that was made in 1970.  Prior to that time the only thing to take into account is if now an additional phrase has been put in - public convenience and necessity.  Conclusion could be that convenience and necessity does not require extension because there is already service there.  Extension will only result in competition that could be harmful to both companies so that is the argument.
In an effort to try to figure out why it was amended in 1970, as he understood it, surprisingly enough this amendment was proposed by the Commission in response to a plan by the Department of Health for getting into siting of generation plants and Wickberg wanted to be sure that the authority remained at the Commission and didn't go to the Department of Health.  that is why the language about that was lined out and why this phrase was added.  It is basically irrelevant to the Commission.  
Commissioner Smith said her proposed answer was to grant the certificate in its entirety and guess it won't hurt the customers of Boise Water.  Don't know if she has enough information to discuss and determine the adequacy of Garden City in that area.
Commissioner Nelson said we can assume that it is adequate.
Commissioner Smith said the small portion unserved, the developers can have their choice.
Commissioner Nelson said if Commission approves the certification of Boise Water Corporation for that area, think it gives the company a better chance of recovering their investment on the line they have to run through that area in order to hook up customers west of Gary Lane.
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Commissioner Smith said she would note that a similar circumstance exists up on the bench, just south of Glenwood where Garden City does serve some scattered subdivisions within the Boise Water certificated area.  there is a little overlapping around the edges already.
Discussed those area.
Lori Mann said Boise Water's certificate goes into Garden City.  It is in the Garden City area of impact..

Commissioner Miller said his initial decision was to deny the area already served by Garden City since there is already adequate water service.  As a practical matter, however, granting the certificate is not going to significantly change anything.  That is, Garden City is going to provide where they already provide.  Boise Water is not going to go door to door to serve one customer at a time and think that Boise Water is entitled to serve in the areas that aren't served, and trying to draw a line to adequately define already served and areas not being served, would be difficult and unnecessary.  So, either grant the certificate for the whole area or areas unserved, would accomplish the same thing.  And it would be just as easy to grant it for the whole area.  Granting the certificate, would like to make it clear, that granting the certificate doesn't carry with it an assurance of cost recovery.  If the company goes into an area where there is competition and if that delays cost recovery for their investment, depending on the circumstances in the future, it is not necessarily a foregone conclusion that existing customers of Boise Water should protect company from this risk.  That would have to be decided later.  Should be clear that is still an open question.  
Commissioner Smith said she think the costs to serve an area are always at issue when the come up for ratemaking.  Assessment of reasonableness of amounts expended to serve any area is at issue in a rate case.
Commissioner Miller said - don't want Boise Water to think we are saying we will protect you in these risks.
**Think it should be said in this area.
**Discussed what isn't served.  There are areas that aren't served but Garden City has facilities.
Decision was:  Grant the certificate amendments as requested with caveats.
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Meeting adjourned.
Dated at Boise, Idaho, this 12th day of February, 1992.
Myrna J. Walters
Commission Secretary
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