19930517.docx

MINUTES OF DECISION MEETING
May 17, 1993 - 1:30 p.m.
& Reconvened Meeting
11:00 a.m., MAY 18, 1993.
In attendance were:
Commissioners Marsha H. Smith, Joe Miller and Ralph Nelson and staff members Don Howell, Mike Gilmore, Brad Purdy, Scott Woodbury, Tonya Clark, Gary Richardson, Belinda Anderson, Stephanie Miller, Eileen Benner, Jim Long, Birdelle Brown, Joe Cusick, Jack Taylor, Randy Lobb, Tom Faull, Mary Friddle, Bev Barker and Myrna Walters.  Also in attendance was Walt Sorg of GTE.
Items from the published May 17, 1993 Agenda were discussed and acted upon as follows.
1.  Regulated Carrier Division Agenda dated May 17, 1993.
Commissioner Nelson asked about saying - indicated an urgent need?  Don't we need letters of support for these applications?  Questioned the wording.
After brief discussion, RCD Agenda was approved.
2.  Brad Purdy's May 5, 1993 Decision Memorandum re:  Idaho Power's Conservation Lighting Program and Intervenor Funding.  (Intervenor Funding Portion held from 5-6-93 Decision Meeting).
Program itself was approved at 5-6-93 decision meeting - discussed where to start.
Commissioner Miller said he had a couple of thoughts.  (1)  The fact that this was modified procedure doesn't seem to be a reason to deny intervenor funding itself.  Statute encourages participation at "all stages".  So, thought the intent was fairly clear that it could be other things but don't think Commission should grant intervenor funding to finance work or activities that should be a normal part of a group relationship with a utility.  Expect them to attend meetings, participate on panels, etc.  Don't think the purpose of the intervenor funding was to underwrite what should be normal activities of customer classes.
Commissioner Smith said that is the kind of activities you want the company to be doing, encouraging them to do that.  If you grant intervenor funding, company would soon stop doing that.
Commissioner Miller said he didn't think intervenor funding was for normal things, but is for true litigation.  In this case, based on what we know, would cut out prefiling expenses.  In this case that does seem to be the distinction
-2-
between normal and true litigation expenses.  Beyond that, it is hard to make a judgement on the reasonableness of remaining fees since it was presented in a lump sum for attorney fees and expert fees.  Brings up the question of whether or not we should require more detail, identification, etc.  In most cases it wouldn't make a difference.. but in a case where we are not concerned about a cap, we still need to do it responsively.  Whether or not we need more details, was not sure, was as far as he got on this.
Brad Purdy said the danger of coming up with a standard in this case, if we are going to elevate the standard for intervenor funding, should this be the standard in subsequent cases - a number of awards granted on the same level to CUC?
Commissioner Miller said if we do, would require rule change.
Commissioner Nelson said he agreed with what Commissioner Miller said.  Would help their petition if they would have given more detail.  To take it to the next step and discuss how much they helped us, they did the work, but don't know if it affected our decision materially.
Commissioner Smith said she went through the decision memo and tried to figure out if anything they said contributed materially to what we did.  On the customer setting, company did do a little clarification.  On PCB, it caused us to discuss it.  On comments on TA lamps and lighting, the company agreed in one instance and not on the other.  Was trying to decide how much of it they said helped.  
Brad Purdy said the simple truth is CUC has been working on this behind the scenes for some time.  Is it a normal activity?  A lot of this filing is a result of their work.  Question is:  do you fund this type of work?
Commissioner Smith said question is did they make a contribution to our decision?
Commissioner Miller suggested eliminating the prefiling expenses.  Can stop there or make a further adjustment for degree of contribution or a third option would be to ask them for a more detailed accounting, for the time when the case actually existed.  Or, could stop here at the $5,000 and decide if we want amendment to the rule in the future.  Said he was torn.  On the one hand should be responsible for administering, on the other hand we are down to $5,000.
-3-
Commissioner Nelson said he would be willing to go along with that amount.  Might be better to ask in the future for demonstration.
Commissioner Smith said it is up to them to prove their number.  If they don't, they run the risk of not getting the amount, it is not in her mind, changing the rules.
Brad Purdy said the difficult is, the next step you go to is providing time sheets, etc.
Commissioner Miller said he didn't buy the argument on attorney/client.  Whether Commission would be in any better position to judge, ... rule is ambiguous.  Discussed the wording in the rule.
Commissioner Nelson said he did think the burden is on them to give us the best tack.
Brad Purdy said he was just trying to think of what the company may say in the future.  Expect other parties to use this standard from now on.
Mike Gilmore said just because you get attorney breakdown, didn't tell you if they did something responsible.
Commissioner Smith said it sounded like there was two votes for $5,063.
Commissioner Miller said he could do it.  Asked Marsha Smith if she would like more information?
Commissioner Smith said she didn't think there would be request for intervenor funding for a case where we asked for comments.  Have a basic problem to begin with.  Think their participation is valuable, though.  So she was torn.
Commissioner Miller said - could have the rule that comments are worth $2,500.
Commissioner Smith said she didn't think she needed any more information.
Commissioner Miller said he thought materiality was the question and it is still minimal.
Discussed the amount.
**Bill Eastlake was in attendance at this time.
-4-
Commissioner Miller said somewhere in the $2,500 region would be agreeable.
Discussed the $5,000.  Thought materiality was strictly a judgement.
Commissioner Nelson said he would go $4,000.  Other two Commissioners concurred.
3.  Brad Purdy's May 10, 1993 Decision Memorandum re:  Application of Bar Circle "S" Ranch, Inc. Water Company for Expansion of Certificated Area.
Approved.
4.  Joe Cusick's May 7, 1993 Decision Memorandum re:  USWC Advice 93-1-S.
After brief discussion, approved extension.
5.  Don Howell's May 10, 1993 Decision Memorandum re:  U S West's 1992 Revenue Sharing Report, Case No. USW-S-93-2.
Commissioner Nelson commented - could go modified procedure on this.
Commissioner Miller said he thought that was fine but wanted to resay - he would like to see us move toward a system where quality of service and network reliability is part of the revenue sharing system and in which the opportunity for sharing would be linked to network reliability and quality of service.  So if quality goes down the price ought to go down so we could provide quality of service incentive.  This isn't the place to do it but want to get quality of service linked up to the condition of revenue sharing.
After discussion, Commissioners approved putting the matter out on modified procedure.
**Dave Schunke was in attendance at this time.
6.  Staff Workplan for possible comprehensive review of EAS policies - Eileen Benner.
Matter held at this time.
7.  Jim Long's April 29, 1993 Decision Memorandum re:  Parma Petition for Toll Free Calling to Caldwell, Nyssa and Nuacres (Case No. GNR-T-93-11) - Held from 5-6-93 Decision Meeting.
Held.
-5-
8.  Birdelle Brown's May 14, 1993 Decision Memorandum re:  GTE Advice 93-07 to Increase Discount Rate on Netcom II Service.
Commissioner Nelson asked what the costs involved were and does the proposed revenue cover those costs?
Birdelle Brown said they are billed out at regular MTS rates and then discounted.
Commissioner Nelson asked if the discount covered it?
Birdelle Brown said it was her perception that everything was cost-based (of GTE).  They could absorb it without raising rates.  Yes, service overall covers it.
Commissioner Miller asked - from a revenue point of view, would GTE be better off collecting from toll carrier than this?
Birdelle Brown said that is what the case would be because GTE doesn't have competitive toll carriers.
Commissioner Miller asked if we knew how likely it is the state will be building their own system?
Birdelle Brown said she had talked to Gary Mountain but didn't think they are close to that.
Mike Gilmore commented that was what U. S. West used earlier.
Birdelle Brown commented he could be a possibility.
Commissioner Smith said she thought they were going to go out and get bids.
Discussed Telecomm '92.
Birdelle Brown said she could do more research on this.
**Commissioners want more information.
Commissioner Miller said he was interested in the likelihood of or possibility of state-constructed network -  is it likely enough that this revenue loss would untimately be in the next rate case - that is $50,000.  His only real question is whether some other form of competitive service is sufficient for us to accept revenue decrease associated with this.  Then you would want to do this.  If there is no good reason to give us this revenue, is curious.
-6-
Don Howell asked if it should be suspended?
Commissioners agreed it should.
10. Scott Woodbury's May 14, 1993 Decision Memorandum re:  Case No. WWP-G-93-3 - Gas Tracker.
Scott Woodbury commented that Potlatch has intervened in the case.
Commissioner Smith asked if they want a hearing?
Scott Woodbury replied it is a sizeable increase but it doesn't appear to be anything from a technical standpoint that modified procedure on a tracker would be unreasonable.
Commissioner Miller said he would not move to approve this without at least modified procedure, especially when we have one intervenor who does not at the point know his position.  Given that intervention and the size of the increase and the public input, should do modified procedure at this point.
Commissioner Smith said if we do the normal comment time, we will be past the June 1 effective date.
Commissioner Nelson asked about the timing?
Mike Gilmore asked if information could be gotten into the service area?
Commissioner Smith said she had asked Dave Schunke to do a response to the customer inquiries.
11.  Scott Woodbury's May 14, 1993 Decision Memorandum re:  IPC-E-93-4 - Avoided Cost Trigger Application.
Scott Woodbury said there are two requests for grandfathering - Rupert and Shoshone.
Commissioner Smith said she thought those should be handled separately.
Scott Woodbury agreed if they want to proceed, it should be a separate proceeding.
Discussed spinning those off and doing modified for the rest.
Commissioner Smith asked about the attached Appendix?
-7-
Scott Woodbury said with the requests of Rupert for grandfathering and if we added the 1.8 which was requested also, if that is added to the load, the 9.5 megawatts of the Rupert Project will push the deficit year from 97 to 98 which would affect their rates because what they have asked - the request for grandfathering be treated as part of this application - and if the Commission asks for modification for Appendix A,... they wouldn't believe it.
Modified has already been done on this case.
Commissioner Nelson suggested spinning off the two projects and approving this and taking Appendix A and reconsider.  Thought modified procedure would be appropriate.
Requiring the company to file Amended Appendix A is different than points parties bring up... and Prairie Power should be handled by the company as a line item.
Should Prairie Power, should purchase of customer base, or cooperatives acquisition, be handled by the company separate and apart from its normal annual growth?
Pete Richardson's comments of his client indicate that there is no way the parties had in mind this as part of normal growth.
Commissioner Miller indicated what he thought Pete's comments were saying.
Scott Woodbury said it is not significant that it wouldn't affect first deficit year but is significant telling the company how these should be treated for purpose of Appendix A.  It is not going to change the rates in this particular case but when grandfathering is rolled in, it may have the affect of changing rates.
Commissioner Miller said there are policy decisions to be made here.
Scott Woodbury said one is Prairie Power.
Commissioner Miller said he didn't get that from the memo.  Asked Scott Woodbury about staff recommendation.
Scott Woodbury said - defer any requirement of the company to make an adjustment until the time of a new filing.  
Commissioner Smith said she didn't have enough information to make a decision.  Listed several questions.
-8-
Commissioner Nelson said he did think they should update Appendix A with known numbers.  Think Prairie Power acquisition is a policy decision.  They made decision that was normal growth.  Don't have enough information to change their decision at this point.
Scott Woodbury asked - do you want to handle that in the company's next avoided cost filing?
Commissioner Nelson said yes.
Commissioner Miller said - or consider it here if we had enough information.  If there are things to be decided here, want to know what they are.
Scott Woodbury said the only thing Commissioners are missing is Idaho Power's position on these purchases.
Tom Faull said it seemed to him the only issue is whether the purchase of a service territory from an existing utility should be treated as a separate increment.  Importance of this is the likelihood of the company buying another system in the next 20 years - in the next 3 years.
Commissioner Nelson said - three months may be the right number because in the next avoided case we are going to include that.  said ;he was willing to let it slide for now.  
Commissioner Smith said she would agree.  Appendix A should always have the latest information available - on line dates.
ICIP didn't ask for it now.
Approved these rates.
12. Mike Gilmore's May 7, 1993 Decision Memorandum re:  Scheduling a Prehearing Conference for Consideration of Curtailment Plans for Electric Energy for the State of Idaho--GNR-E-93-2.
Commissioner Smith asked about doing all of them after June?
Mike Gilmore spoke to why separate hearings?
Commissioner Smith asked if companies had feelings about going both places?
Mike Gilmore said he suspected they would rather only do it once.
-9-
Commissioner Miller said there is some risk with two hearings - in the first you come to some conclusions and then have a second and tend to change your mind.  Think one would be sufficient.
Commissioner Nelson asked why the one in Burley?
Don Oliason said 18 out of the 24 are in Eastern Idaho.  
**Terri Carlock and Carol Cooper were in attendance at this time.
Discussed why the co-ops aren't involved - just investor-owned and munis.
July 13 or 14 was suggested as hearing date - 11:00 a.m.
13. Mike Gilmore's May 13, 1993 Decision Memorandum re:  Information to Customers Rulemaking for Gas, Electric and Water Utilities -- Case No. 31-2101-9301.
Language requested by Idaho Power Company was added.
Order of adoption to be issued.
14. Mike Gilmore's May 14, 1993 Decision Memorandum re:  Master-Metering for Electric Utilities--Case No. 31-2601-9301.
Commissioners approved issuing order of adoption in this case.
15. Mike Gilmore's May 14, 1993 Decision Memorandum re:  Gas Service Rules--Case No. 31-3101-9301.
Commissioners approved issuance of an order of adoption in this matter.
16. Mike Gilmore's May 14, 1993 Decision Memorandum re:  Small Water Company Policies--Case No. 31-3101-9301.
Commissioners approved issuance of an order of adoption in this matter.
17.  Scott Woodbury's May 13, 1993 Decision Memorandum re:  Case No. ATL-E-93-1 -- General Rate Case -- Atlanta Power Company.
Commission Decisions were listed beginning on Page 16 of the Decision Memo.
-10-
Rate base - includes promissory note to Lynn Stevenson.
re:  Requirements of I.C. 6l-901 et seq, (Issuance of Securities) re:  Company obligation to provide supporting documentation and evidence to justify requested relief?  Effect of District Court Stipulation?  
Commissioner Smith said we closed the investigation saying that the District Court action would make PUC action moot.
Why are we resurrecting this?
Scott Woodbury explained that what came out was a promissory note.  Under our security provisions, we require Commission action.
Commissioner Smith asked - do you think when he sent it to the Commission, that he felt he was doing what was required?
Scott Woodbury replied that Conley Ward was his attorney.
Commissioner Miller asked - are you suggesting they go through a security issuance case or we should conclude that they should have, and do something?
Scott Woodbury suggested acknowledging the company's security obligation and say the Commission has considered it and tell them that in the future in the event they write promissory notes that they comply with Commission requirements.  Don't think you can avoid it.  Think there is some flexibility provided in considering this matter.  We are including it as part of ratebase so it should be acknowledged.
Commissioners agreed to that.
Revenue Requirement:
RE:  "free electricity".
Commissioner Smith asked - is it permissible under Idaho Code to consider free service as price of the system?  The issue of whether free service can be part of the cost in this kind of a deal has nothing to do with discrimination.  Is it lawful as part of the consideration in one of these deals that free service be given?
Scott Woodbury said no.
-11-
Commissioner Nelson said he was not sure a Commission decision becomes law.
Commissioner Smith said if you get to the discrimination issue, you lose.
Commissioner Nelson said - unless you can prove it is costing the other ratepayers something, it is not discriminatory.
Scott Woodbury said id doesn't think it is costing the other ratepayers.
Commissioner Miller said in the early 1900s, free service by railroads and utilities generally was a real problem because deals were made.  Think stamping out free service was a policy decision in early years which caused him to put these cases in that context, place less weight on them and to then go to the point that in this context the inquiry should be whether other customers are disadvantaged, and he guessed he was not sure.
Commissioner Smith said if as a matter of law you cannot give free service, you lose on discrimination, you don't make an adjustment.
Mike Gilmore said if you look at houses at Swan Falls or Brownlee, there is free service.
Commissioner Miller said in this case if staff says there are legal opinions and it is prohibitive, would abide by staff's legal opinion.  But if you don't have strong opinion, think there should be an adjustment.
Commissioner Nelson said he didn't see that it is prohibitive.      
Commissioner Miller said to him it appeared to be a legal question.
Scott Woodbury said upfront, the guy uses 45,000 kws a year, it would help the other customers if he was a buying customer.  Think the free electricity is now more significant.
Commissioner Smith instructed Scott Woodbury to write the order and if he thought it was legally prohibitive, write it up and if Conley Ward doesn't agree, he will petition for reconsideration.
-12-
Scott Woodbury asked about as an issue of the sale of the system or for an employee?
Commissioner Smith said you cannot provide it to employees.
**The amount is whatever their demand is.
Commissioner Miller said you can say you can't give free electricity or you can say you can give it but it is a shareholder expense.
Commissioner Miller asked what the audit said?
Terri Carlock said all Lynn Stevenson is requesting is that part of wages that will be recovered.
**Mike Gilmore said - call it payment in kind, rather than free electricity.
Rate Design -
No dispute.
Accounting Procedures -
Company has indicated they will keep them as they are supposed to.
Customer Relations -
Does Commission wish to characterize the company's customer relations?
**They did agree they would file "customer plan".
Commissioner Smith said she thought a general paragraph on good customer relations and take them up on their "customer plan".
Carol Cooper interjected there should be a deadline for filing their customer plan.
Staff recommendations:
Say Commission wants them to address staff recommendations.  Staff recommended core sampling plan.
Scott Woodbury asked if Commission thought the Company's testing method was adequate?
Don Oliason said it hasn't been done.
-13-
Pole testing program is appropriate for their circumstances.
Scott Woodbury sand there were problems identified but they are working on them.
Modified regulation.
Commissioner Miller suggested that perhaps in the future, if customer relations go well, help them find a way that this can become kind of like a co-op and let there be customer input and problems resolved before they get to the Commissioners.  Know that is a very optimistic thing.
Forest Service and FERC.
No action.
Additional hearing in Atlanta?
No.
Commissioner Miller said to issue this order and if we think a town meeting is applicable for the customers to understand the decision and do think about refining this relationship, we could authorize a town meeting and have someone from the staff go up.
Commissioner Nelson said in discussing rates, don't think it would hurt to say in the last rate case rates were suppressed to get new customers.  It hasn't worked and the company is entitled to recover its expenses so after failing in our first experiment, we are forced to go with rates that appear to recover the investment.
Scott Woodbury said there was testimony in the record with respect to alternative source of generation, seems like we have already been down that road.
Meeting was adjourned until 11:00 a.m., May 18, 1993.
MINUTES OF DECISION MEETING
May 18, 1993 - 11:00 a.m.
In attendance at this time were:  Commissioners Marsha H. Smith, Joe Miller and Ralph Nelson and staff members Don Howell, Tonya Clark, Gary Richardson and Myrna Walters.
-14-
Topic of discussion of the meeting was Item 18 from the May 17, 1993 Agenda - GTE Case Nos. GTE-T-90-1, GTE-92-2, GTE-T-92-3 and GTE-T-92-4.
Commissioner Smith said the only thing she was concerned with was the Spirit Lake treatment.  What concerned her was:  Page 10 - where it clearly points out that the original proposal was for EAS and the reason for GTE's withdrawal of the proposal was because it would raise rates to an unacceptible rate of $15.00.  Now we are imposing EAS without Coeur d'Alene for $15.95.  Only suggestion is - should we adopt staff's $14?  Also, the $35 business rate is very high.
Don Howell said the Spirit Lake fix is a temporary measure until customers can choose among all 4 options.  The temporary measure gives license to pick whatever rate they want.
Commissioner Smith said the people in Bayview would get the $15.95 rate.
Commissioner Miller asked what Community Plus does?
Commissioner Smith explained.  They don't get toll free to Coeur d'Alene but they get a deeply-discounted measured rate.
Don Howell said this is the Mark I rate without the $2.25.
Commissioner Smith said for only a dollar they get some EAS.
Mark I customers are getting the most.
Commissioner Miller said by definition they are the high toll users.
Commissioner Smith said you are benefiting the people with kids in school.
Don Howell said Spirit Lake call volumes are on Page 6.
Commissioner Smith said otherwise thought Commission did a pretty good job.
Commissioner Miller said maybe we are giving them enough that this rate is okay.
Commissioner Smith said since you don't have a choice (you have to pay it), thought it was too steep.
-15-
Don Howell said if you adopt the lowest monthly charge, you can get $8.00 recurring and a nickel per minute....
Commissioner Miller asked - when they get EAS, what will be the rate?
Don Howell explained premium.
Commissioner Nelson said at $14.00, everyone is contributing, not just the toll users.
Don Howell said in a year's time when Community Plus becomes available, they will go from $14.00 to $15.95.
Discussed the business rate.
Commissioner Smith said she didn't know.  Double their rates seemed pretty steep for what they are getting.
Commissioner Nelson said he didn't understand why we would go from 50% more to 250% more when we go to EAS.
Commissioner Miller said he thought some moderation is necessary here.
Commissioner Nelson said he had more of a problem with business differential.
Don Howell said - but they are getting the 4-area expansion and they don't have to pay the Mark rate.
Commissioner Smith said she could go with $27 business rate.
Commissioner Nelson said he could go with that also.
Discussed what would happen in a year when they go to new switch.  They can make choices in the future.  Problem is the customers have no choice at this time.  In the second year they have a choice.
Discussed why it is mandatory.
Commissioner Nelson said the other option is to stay with Mark plan until new switch is available.
Commissioner Smith said either option is better than what we originally proposed.
Commissioner Miller said he thought Commission ought to do the mandatory for $14 and $27.
-16-
Commissioner Smith said on Page 19, she wanted to know about the multiple business line.  Suggested adding in - is reasonable.
Don Howell explained what company originally asked.  It got away from the two-tier rate.  It gave away a lot of revenue.  In the multi-tier had 3 tiers.
Said there was just a little bit of testimony on going from three tier to one.  We have gone to a two-tier.  Asked about the rationale?
Commissioner Smith asked - can we use what the company says?  Asked Don Howell to see if he could dredge something up on this.  Will also add text on third choice.
Meeting adjourned.
Dated at Boise, Idaho, this 27th day of May, 1993.

Myrna J. Walters
Commission Secretary
0157M