19930312.docx

Minutes of Decision Meeting
March 12, 1993 - 1:30 p.m.
In attendance were:
Commissioners Marsha H. Smith, Joe Miller and Ralph Nelson and staff members Scott Woodbury, Lori Mann, Belinda Anderson, Syd Lansing, Eileen Benner, Mary Friddle, Stephanie Miller, Joe Cusick, Carol Cooper, Lynn Anderson, Birdelle Brown, Jack Taylor, Gary Richardson, Don Oliason, Terri Carlock, Beverly Barker, Don Howell and Myrna Walters.
Also in attendance was Walt Sorg of GTE.
Items from the March 12, 1993 Published Agenda were discussed as follows.
1.  Regulated Carrier Division Agenda dated 3-12-93.
Approved.
2.  Scott Woodbury's March 5, 1993 Decision Memorandum re:  ATL-E-93-1 - General Rate Case.  (Held from March 8, 1993 Decision Meeting - for further discussion).
Scott Woodbury said staff is opposed to interim relief and thinks there should be a full hearing.  Staff would suggest the following schedule:  Prefile testimony on April 9; could go to hearing on the following Friday, April 16.  
Said 19 customers have called and talked to Carol Cooper.  Seventeen want a full rate case with a public hearing.  All oppose interim without a public hearing.  Those voicing an opinion of where it should be held indicate - 6 want it in Atlanta, 4 want it in Atlanta and Boise.  Forest Service indicates that the road past High Bridge through Arrowrock is open.  No other roads will be open until mid-April or May.  Road is in bad condition.  
Said issue in the case is primarily rate design.  Company's filing didn't establish reason for interim rate relief.  
Scott Woodbury said he talked to Conley Ward.  Gave him the dates.  He did say that the Commission's failure to give interim relief would not be well received - Lynn Stevenson was very adamant that he is entitled to it.  It was suggested there was a reason for rate relief last August.
**Decided on hearing on the 16th of April.
Discussed hearing location.
Don Oliason mentioned there will be logging trucks every 7 minutes coming down the road from Atlanta.
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**Dave Schunke and Bill Eastlake were in attendance at this time.
Was decided there were 15 permanent residents and 24 seasonal in Atlanta.
Commissioner Miller suggested sending a staff person as hearing officer to take comments from those unable to come to Boise.
Commissioner Smith suggested saving them some money and having it in Boise.
Commissioner Miller said the options are:  have it here, or stream-lined group go to Atlanta for public comment, or stream-lined group go for hearing in Atlanta.
Commissioner Smith said - have a hearing here and decide if we need to go up there.
Commissioner Miller said - could start here and if demand for public hearing is such, can go up there.  It occurred to him that he wondered if you have to do rate of return regulation for this company and do price caps or social contract regulation where you would address rate levels, not earnings levels.  The need to regulate Atlanta's earnings under rate of return regulations is foolish.  They will never overearn.  Doing rate of return regulation not only doesn't serve any purpose, but the process requires revenue requirement that would lead to the death of the company.  Is there any other arrangement that could be worked out that would result in rate levels that were acceptable to the public?  Don't know what you would give Atlanta as part of the bargain.  At least the promise they would never have to do rate cases.  Just seems to him that the traditional way of regulating utilities doesn't work for Atlanta Power company.  If you are just trying to get rates just below self-generation, do you really need to go through revenue requirement stuff?  Maybe it is something to think about.
Commissioner Nelson said in the last case we recognized that we couldn't set rate of return rates, but set rates to attract people on the system.
Commissioner Miller said the way we do now is to set rates and say we won't give them to you.
Commissioner Nelson said on that theory we could grant interim rates but if that causes customers to fall off the system that wouldn't help the company.  
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Commissioner Miller said if theres a different way to solve this problem, maybe we can bring it up to the parties.
Commissioner Smith said it would require analysis of what it would cost for self-generation.
Commissioner Miller said - might just think about something different for Atlanta.
Commissioner Smith suggested negotiating with the Company.
Don Howell suggested running it with just the cost of business.
Commissioner Miller said he would take it one step further.  For small water companies it becomes all operating expenses.  Here we are saying we don't care what income or expenses are.
Scott Woodbury asked about scheduling?
Staff will pursue alternative proposals.
Hearing is to be scheduled in Boise.
3.  Joe Cusick's 3-9-93 Decision Memorandum re:  U S West's Advice No. 93-2-N; Moving Language Concerning Payments from FCC No. 8 to IPUC Appendix No. 10.
Tariff advice approved.
4.  Birdelle Brown's March 10, 1993 Decision Memorandum re:  Oregon-Idaho Utilities Advice No. 93-1 Regarding Customer Service Commitments - Effective October 1, 1992.
Advice approved.
5.  Don Howell's March 10, 1993 Decision Memorandum re:  U S West's Request to Modify Its Tech II Construction Schedule, Case No. USW-S-93-1.
Request approved.
5A.  Lori Mann's March 11, 1993 Decision Memorandum re:  Capitol Water Company Rate Case -- CAP-W-92-2.
Commissioner Smith said she had a question on rate base.  Took staff number, added 2224 and 1549 and did not get $41,685.  
Terri Carlock explained.  Said every time a number was changed up, it changed ratebase.
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Commissioner Smith suggested she would not give those numbers in the chance that someone else might try to add them up.  
Also said there is no mention of amortization of rate case expenses.  Should it be mentioned?
Lori Mann said they agreed to staff's 5 year amortization.  Didn't know if it should be mentioned.
Commissioner Smith said she thought it should be mentioned  for the benefit of other utilities reading the order.
Commissioner Nelson said he thought it should be mentioned because of the wording on truing up.
Commissioner Smith said - also for future reference, it should be mentioned.
Asked - on the cost of capital, should we add wording supporting Terri Carlock's work and methodology on Page 6?
Lori Mann said the reason she didn't mention it was because Commissioners were going above that.
Commissioner Smith said she thought Terri should be complimented on her methodology.
Commissioner Nelson said it wouldn't hurt to agree generally with Terri Carlock's methodology.
Commissioner Miller said he thought the Commission found it agreeable but would do it for conservation, etc.
Commissioner Nelson said although we agreed with Terri's methodology, agreed we wouldn't go out and borrow capital for the company.
**Randy Lobb was in attendance at this time.
Commissioner Nelson said - actual cost of capital was artificially low because he personally guaranteed the loan.
Thought Commission was taking Terri's method and adding to it.
Commissioner Smith said she thought we should say why we went above staff.  Said she only had one other question.  Final question is on Page 8 about installing meters.  Thought we were going to encourage it but not require them?
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**Meters were to be installed.
Discussed meter costs.
Commissioner Smith said on exhibits, should say accepted.  On both attachments.
Item 6 - Held at this time.
Meeting adjourned.
Dated at Boise, Idaho, this 30th day of March, 1993.
Myrna J. Walters
Commission Secretary
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