19940420_1.docx

Minutes of Decision Meeting
April 20, 1994 - 1:30 - p.m.
In attendance at this time were Commissioners Marsha H. Smith, Joe Miller and Ralph Nelson and staff members Don Howell, Weldon Stutzman, Brad Purdy, Lori Mann, Don Oliason, Gary Richardson, Bev Barker, Tonya Clark, Stephanie Miller and Myrna Walters.
Also in attendance were Richard Slaughter, Consultant, Ron Lightfoot of U S West and Bart Kline of Idaho Power.
Items from the April 20, 1994 Agenda and Agenda Addendum were discussed and acted up as follows.
1.  Regulated Carrier Division Agenda dated April 20, 1994.
Approved.
2.  Robert Horton’s April 15, 1994 Decision Memorandum re:  Rates to Accompany “Express Parcel” Authority.
Withdrawn.
3.  Brad Purdy’s April 6, 1994 Decision Memorandum re:  Case No. IPC-E-93-10; Idaho Power’s Request to Terminate Service to Villager Condominiums.
Commissioner Nelson said he was looking at this today and didn't look up what the Supreme Court said about safety.
Brad Purdy read what the trial court said.  Pointed commissioners to page 4 of the decision memo.
Commissioner Miller said he read the Supreme Court case along with everything that Villagers provided the Commission and it seemed to him that in the Supreme Court case the court made the distinction between expansion and enlargement.  In an expansion case, is increased use, you can take into account safety, etc., in determining whether the expansion is justified.  In other types of cases where the nature of the use changes in kind, in an enlargement case, questions of safety, etc. are irrelevant because an easement can’t be enlarged.  His impression was the court viewed this as an enlargement case and all the information about safety, etc. was basically irrelevant.
Questions of why are irrelevant so concluded that if all those things are irrelevant then it is hard to say they are fully adjudicated.  Don’t really think those would preclude the commission from considering the case.  Problem he still has is that here you have a judicially determined easement that cannot under any property law be expanded, so that is the rule we have to live with from the Supreme Court.  Can we on the basis of regulatory law change a result that the Supreme Court says has to fall from easement law?
Commissioner Smith said Idaho Power is acknowledging the decision but they are saying it is unsafe.  They are asking to not furnish service because it is not safe.  Don’t think it is a question of changing what the Supreme court said, can we find that because it is unsafe, can they not provide?  From the customer point of view the Court has said your easement cannot be expanded.
Commissioner Nelson said he thought it was unfortunate that the Court didn't make a finding on this issue.
Commissioner Smith said she didn't think it had been fully litigated.
Brad Purdy repeated Idaho Power’s position as he saw it.
Commissioner Miller said we ought to discuss the burden of proof question.  If you were starting fresh, think the Commission has deferred to the utility’s judgement on plant.  In that circumstance you might tend to defer to utility judgement... still there is a lawful easement where service is being provided and to compel these people in two choices...in this case would have to be a much stronger showing that public safety is at risk.
Commissioner Nelson said their engineers decided at one time that underground was okay, to terminate service, they would have to prove that now.
**In attendance at this time were Bill Eastlake, Madonna Faunce and Terri Carlock.  
Commissioner Miller said starting afresh, what might be most convenience might be one thing but in order to justify termination they would have to make a pretty strong showing.
Brad Purdy said 61-515 gives the Commission the obligation to look at the safety of the public and the Idaho Power employees.  
After discussion, decision was to hold hearing.
**Commission can’t award fees.
4.  Scott Woodbury’s April 11, 1994 Decision Memorandum re:  Case No. IPC-E-94-4  Amendment to Firm Energy Sales Agreement  East Fork Ditch Hydro Project.
Approved the proposed changes.
**Do by Minute Entry rather than order.
5.  Scott Woodbury’s April 18, 1994 Decision Memorandum re:  Case
No. PPL-E-94-2  BPA Exchange Credit Adjustment.
Was discussion on whether the BPA adjustment was considered in the PPL/WWP sale case.
Madonna Faunce said she didn't think the BPA adjustment was excluded.
It did not include BPA in the rate agreement.
Stephanie Miller said staff did expect the company to make the adjustment.
Commissioner Smith said unless we have evidence that PPL is overearning, it would be arbitrary, capricious and an abuse of our duties to deny this.
**Approved the May 1 effective date.
Commissioner Smith suggested language about the unfortunate timing.
**Eileen Benner was in attendance at this time.
Commissioner Miller spoke to the hearing on Motion to Delay, to be held on Friday.  
Don Howell said the Commissioners control the scope of the proceedings and the process.
6.  Scott Woodbury’s April 18, 1884 Decision Memorandum re:  Case No. WWP-G-94-1  Relocation of Facilities.
After brief discussion, matter was approved.
6A.  
Case No. IPC-E-94-2--Idaho Power’s Application for Authority to Institute a Pilot Program for Irrigation customers in Eastern Idaho.
Item was held at this time, per request of Idaho Power company.
6B.  Don Oliason’s April 19, 1994 Decision Memorandum re:  HPN-W-91-1; Customer Meeting Organized by Hayden Pines Water Company.
Commissioner Nelson asked why Neighborhood Watch has a seat at the table?
Don Oliason responded.
Commissioner Nelson asked if the Homeowners Association couldn't handle this?
Commissioner Smith said she was reluctant to commit the Commission resources to pay a consultant to participate in this and if we have a PUC staff member there, that should be adequate and if staff feels their expertise is lacking, then addition consulting services could be looked at.
Don Oliason said Montgomery Watson has a proposal in to the Commission regarding their participation.
Commissioner Miller said the Commission originally had these consultants do some testing, monitoring, evaluating, etc.  Was curious about what they could add at this point.
Don Oliason said he thought their value to us would be in having a resource to call on for advice or for evaluating a proposal to know how much chlorine should be added to the system, etc.  There might be times when it would be good to have an engineer at the meeting.
Randy Lobb originally contacted Montgomery Watson.  
Randy Lobb said we need to check out what the customers will accept.  He did see Montgomery as someone to look over Kimball’s work.  Montgomery would provide evaluation of what the company says.  This is going to be a “lay” committee.
Commissioner Nelson asked why there was a county commissioner on the committee?
Also asked if the Commission was relinquishing our duty by turning it over to a committee?
Randy Lobb said ultimately the decision will be that of the company.  Think it is a good thing to have the customers in on the decision making process, though.
Commissioner Nelson asked if Montgomery Watson wasn't hired because Kimball wasn't an engineer?
Randy Lobb said he thought it was because the customers didn't trust Hayden Pines.  Kimball is an engineer.
Don Oliason said he thought getting the people together in a room, at least there is information being given out.
Lori Mann said they have been doing the sequestering for sometime and they haven’t been putting in the right quantities.
Commissioner Smith asked if they have started using the correct dosage now?
Randy Lobb said yes - explained why they didn't in the past.
Commissioner Smith said she thought PUC participation should be approved, but why the chairman of the committee?
Had a couple of concerns.  If staff does participate on the committee, it has to be made clear that you are a member of the staff and your opinion cannot be made into decisions.
Randy Lobb said it was made clear that they were only staff members.
Commissioner Smith said she did not have a problem with “on need basis” consulting with Montgomery, but really question whether it is worthwhile to have them at committee meetings.  Expect staff to shepherd this wisely.
Lori Mann said if Commission already has Montgomery Watson proposal.
Don Oliason said if Commission approves staff person as chair, he would guide the meeting but not be in charge of it.  would make it clear that his input is not that of the Commissioners.
Staff participation on the committee was approved.
FULLY SUBMITTED MATTERS:
7.  IPC-E-92-31  Idaho Power/Rosebud Complaint.
Commissioner Smith turned the matter over to the case chairman, Commissioner Miller.  
Commissioner Miller announced that the Commissioners have their order ready to issue with two signatures and a dissent by Commissioner Nelson.  Summarized the decision.
Said by way of personal comments, there are some cases the Commissioners decide where the right answer is not the one you appear to reach.  But in this case is satisfied the IRP process is maturing and think it is a worthy call that it will eventually provide a vehicle for comparatively neutral least cost acquisition and the idea of blending together avoided cost with IRP is something the Commission will be working towards.  Do think that we will h ave to examine in detail where we are going to accomplish the competitively-neutral aspect.  We simply have not accomplished that yet.  Because of that we cannot allow the IRP process to become the basis of contract negotiations here.
To do so would require us to overlook once the Commission establishes a policy and after appropriate presentation, it is incumbent upon the utility to follow it until it is changed.  For his part didn't really focus on the question of good faith or bad faith.  His impression is that this isn't a good faith or bad faith case.  It was not necessary for him to come to a conclusion about that.
Last comment is the only think we are deciding is relationship between Rosebud and Idaho Power company.  Any ratepayer consequences will have to be considered in a contract-approval case or in a general rate case.  Think that is where you take up the question of whether proceedings should have been initiated earlier, or whatever.  All that waits for another case.  
Commissioner Nelson said he thought this was a very difficult decision for the Commission.  In the end result, just felt he had to go the other way in part to protest the results of the decision.  Can't fault the decision the decision in its logic, just can't go with the end result.  Is hopeful that going forward, Idaho Power and Rosebud are able to negotiate a contract that is satisfactory to both parties and also satisfactory in terms of supplying the ratepayers with needed generation at a reasonable price.  Beyond that, that is all he had to say.
Commissioner Smith said what she thought about the decision is reaffirming that the PUC has a process and when the process has been used, that is the decision until another process is used to come to a different conclusion.  Think in this area it is incumbent upon us to be current with what the resource needs of the utilities and customers are.  Said her signature on this order didn't constitute an unwillingness to change, it is that a new process hasn't occurred.  It only speaks to a calculation of a rate.  Essentially that is what was on her mind as she signed the order.
8.  INL-T-91-2  Inland Telephone Company - Leon Investigation.
Commissioner Smith said investigation into EAS for Inland's Idaho exchange schedules.  In this case we have determined that the evidence presented - extensive evidence - the evidence demonstrated that it jut couldn't be done economically.  The calling patterns of the customers were split among the different exchanges.  Therefore she believed that the outcome reached is the only responsible one.  Others could not be economically justified.
Commissioner Nelson said he thought that said it pretty well.  Think it came down to the diversity of the calling patterns of the residents that made an investigation of that kind difficult to order, impossible to order.  None of the customers by themselves would fit a significant enough group of ratepayers.
Commissioner Miller said he agreed fully.  Only additional comment was to the staff for the immense amount of work that went into this case and although it is no consolation to the customers, take some consolation that staff did everything they could to analyze this to improve the customers' lot in life.  customers have gotten good service from the staff, even though the ultimate result is what it is.
Commissioner Smith commented - Commission struggled to do this EAS.  Think we looked into everything to make it work but nothing could work.
Meeting was then adjourned.
Dated at Boise, Idaho, this 4th day of May, 1994.
Myrna J. Walters
Commission Secretary
042094.mins