20021015Decision Memo.doc

MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN

FROM: SCOTT WOODBURY

DATE: OCTOBER 15, 2002

RE: CASE NO. PAC-E-02-1
RECONSIDERATION OF ORDER NO. 29034

In Order No. 29034 the Commission ordered PacifiCorp to provide a $20 credit to all customers for failing to provide a “bill stuffer” notice (Rule 102) – $1,087,720.
1. Q. Was there a record to support the Commission’s decision in the underlying case?
A. No. The Commission issued its Order sua sponte, i.e., voluntarily and without prompting or suggestion.
2. To remedy a due process – fair notice challenge, the Commission granted reconsideration.
3. Q. Was a sufficient record developed on reconsideration to support your decision?
A. No.
4. Q. Is Customer Information Rule 102 ambiguous (is language capable of more than one construction)?
Title – Notices to Customers of Proposed Changes in Rates
01. Customer notice of general rate cases and tracker rate cases.
05. Purposes and effects of this rule.
To encourage wide dissemination to customers of information concerning proposed rate changes.

It is not a purpose of the rule to create due process or other procedural rights of customers.

Failure to comply with Rule 102.01-.04 can be grounds for returning an application for incompleteness.

5. PacifiCorp consulted with its legal counsel (shortly after filing) as to the requirement of a Rule 102 “bill stuffer” and was advised “no, this is neither a rate case nor a tracker.”
6. Idaho Code, Title 61, Chapter 7, Enforcement and Penalties.
61-706 – Any utility which violates or fails, omits or neglects to obey, observe or comply with any . . . rule, direction, demand or requirement . . . is subject to a penalty of not more than $2,000 for each and every offense – (district court filing requirement – Idaho Code § 61-712).

Q. Can a single violation constitute multiple offenses? I.e., applied on a per customer basis? Rule 102 Notice requirement – requires notice to each customer.
Q. Can the Commission require payment of penalty to customers instead of to state treasury?
A. No. Idaho Code § 61-712.
Q. Does the Commission have authority to order a credit apart from Chapter 7, Enforcement and Penalties?
A. No – not on the facts of this case – this is not a “refund.”
Q. Is the penalty imposed unduly punitive and excessive?
A. Arguably yes.
The Commission’s credit requirement in this case was contrary to historical precedent.
Avista PCA Tracker. Rule 102 violation noted – “once again deficient.” Case No. AVU-E-00-2. Company cautioned that repeated instances of oversights would demonstrate a non-acceptable pattern of neglect.

IGC – PGA Tracker. The Commission notes that failure to comply with Rule 102 can be grounds for returning an application for incompleteness. The Commission chose instead to adopt Staff’s recommendation and suspend the proposed effective date for 30 days.

Washington Water Power – Order Nos. 25756; 25816 -- $82,000 fine for 41-month violation of line-extension rules reduced by settlement to $75,000. Commission finding of Company indifference and actions and practice adverse to public interest.

The Commission has never interpreted its rules to allow penalties to accrue on a per customer basis.
The Commission has never imposed a penalty of this magnitude.
The Commission has never imposed a financial penalty for a violation of Rule 102.
Q. Did customers have actual notice?
A. Arguably yes. Evidence of actual notice: newspaper, articles; Company press releases; Commission Orders/press releases. Also hearing attendance must be taken into consideration and the presence of intervenor Tim Shurtz.
“When party had actual notice of issues to be addressed and relief sought and was not prejudice by inadequate notice, court will not grant relief for what is, at most, harmless error.” 126 Idaho 290.
Q. Was the Commission’s Order arbitrary? PacifiCorp alleges that the Commission failed to articulate a reason basis for imposing a penalty of this magnitude in this case. PacifiCorp alleges that the Commission must explain a reason for departure from past practice.
Q. Was there evidence of PacifiCorp good faith compliance?
A. Yes.
Consideration of rule
Company consulted with counsel.
Determination that rule did not apply.
Company communication plan was in place and implemented.

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