19960903_1.docx

MINUTES OF DECISION MEETING
September 3, 1996 - 1:30 p.m.
In attendance at this time were Commissioners Ralph Nelson, Marsha H. Smith and Dennis Hansen. Also in attendance were staff members Scott Woodbury, Don Howell, Tonya Clark, Randy Lobb, Birdelle Brown, Joe Cusick, Rose Schulte, Terri Carlock, Bob Smith  and Myrna Walters. Also in attendance was Jeanette Bowman of Idaho Power Company. Tom Dukich, Brian Hirschkorn and Neal Colwell were in attendance from Washington Water Power Company.  
Commission President Ralph Nelson opened the meeting.
Items from the September 3, 1996 Decision Meeting Agenda were considered and acted upon as follows.
1. Regulated Carrier Division Agenda dated September 3, 1996.
Commissioner Smith made a motion to approve the RCD Agenda; Commissioner Hansen seconded the motion; Commissioner Nelson concurred.
2. Further discussion on Idaho Universal Service Fund surcharge - 1996 Annual Report - U-1500-174 Decision Memo of August 20, 1996 of Birdelle Brown put back on this agenda from the 8-26-96 Decision Meeting.
Birdelle recommended Option No. 1. If we don’t get U S West monies from the sale of exchanges, then either of the other options will leave the fund short somewhere around March, April or May 1997.
Commissioner Nelson said he was assuming we would get the $300,000 from U S West.
Birdelle replied - we will not recognize any increase until November. Commissioner Hansen said he liked Option 1.
Commissioner Smith said she didn’t like Option 1. Didn’t like Alyson Anderson to have to go month by month. She would prefer something that is Option 3 remodeled.
After brief discussion, Commissioners Nelson and Hansen approved Option 1; Commissioner Smith dissented from that decision.
3. Don Howell’s August 30, 1996 Decision Memorandum re: USW-N-95-2 and USW-S-95-8 - Six-Month Review of U S WEST’S Compliance with Restoration of Local Service Rule 503.
Commissioner Hansen said he thought U S West should be commended on the Southern Idaho job. He is disappointed in the north, though. His feeling is the order should stand as it was originally intended and they failed to meet the 90% Requirement in the north for three consecutive months and should still be paying a fine. Think the amount of the fine should actually increase. But would leave it for 3/6 months.
Commissioner Nelson said he was pleased they responded as they did in southern Idaho. While the fine wasn’t huge, think there was an embarrassment factor. Unfortunately the north they don’t embarrass as easily. don’t know if the amount of the fine makes any difference, so he is stumped.
Commissioner Smith said she thought we were entitled to some explanation. Think everyone expected this was a reasonable goal. Said she would like to hear from U S West why. Why is it we see continuous improvement until May. Did something change? Is there anything you can point to that caused it to happen. Would be happy to increase fine if there was some correlation in paying more fine and increasing service. Want them to direct their resources to increasing service, not paying fines. What happened there and what continues to happen?
Commissioner Hansen said he thought the Commission was responsible to see that service quality is met, whether it is a token fine or not, fine may be immaterial but it lets the public know that we expect better service.
Commissioner Smith said she thought $2,500 was nominal.
Commissioner Nelson said doubling it has a nice ring to it and asking the company for a report would apply some pressure.  
Decision was: double the fine and report in 30 days, speaking to how they will handle it.
Drop the 5%.
Approved.
Bob Wells of U S West was in attendance at this time.
4. Scott Woodbury’s August 23, 1996 Decision Memorandum re: Case No. WWP-E-96-2 Schedule 26 - Experimental Direct Access Delivery Service. (Held from 8-26-96 Decision Meeting)
Commissioner Hansen said he had asked that this item be held from the last decision meeting because he wanted more information and he didn’t get that information so he can’t go forward with evaluating the matter at this point.
Scott Woodbury said Commissioner Hansen’s concern is ESSA. Said he had looked at that and didn’t know if he could do a brief that would satisfy that. Explained ESSA. It is a form of regulation with co-ops. It continues to provide that function. It does seem that 61-331b the opportunity for alternative suppliers to serve customers within the service territory of WWP with specific written concerns. To that end, company’s Schedule 26 offering can be structured to cover those concerns. More problematic is how the commission provides the oversight to alternative providers. When the utility enters into agreements with co-ops and cities, this Commission has no authority to ... had a question from an individual just this week who wanted to provide natural gas service by a co-op in eastern Idaho. Has read the statute regarding voluntary regulation. This perhaps could be the case. It has ramifications here. don’t see the ESSA as being a particular stumbling block. See as a greater question, co-ops that which to provide service to these customers, don’t now if WWP has run into that situation. It is his understanding that Idaho Power has been the only alternate provide that has stepped forward to do that. Don’t know that there is a black and white to this.
Commissioner Hansen said he wanted to have those addressed before he made a decision.
Commissioner Smith said she thinks it says they could consent to having an alternative supplier, it takes you full scale back to an electric company. Statute does not speak to...read 331(a) definition. It takes you back to the definitions that apply in Title 61, so where that takes you - is it okay for WWP consent but that is the first step but the commission then regulates the alternative supplier under the statute as it is now.
Commissioner Nelson said you could get around that by speaking to the rates set. On his theory you have one rate that is fair, just and reasonable and if you found transmission that is fair, just and reasonable, would be fair because the customer is making a contribution to fixed cost just as any contract. Was thinking of proposed delivery rate. If you could find that that rate was fair to all customers, that the variable energy rate (or bid rate) is at their option and if they think it is fair, it is fair to all of the customers. If we approved it and someone was unhappy, they are free to tell us.
Commissioner Smith asked if there was enough evidence to declare the rates fair?
Commissioner Nelson asked about Washington customers?
Brian Hirschkorn of WWP replied - 90% of the total load is eligible - 2/3rds of the customers under Schedule 25.
Commissioner Nelson said his only concern is we are setting a precedent that we will be
wary of later.
Scott Woodbury said to the extent you discussed those concerns in restructuring and Keith Hessing’s memo is constructive on what Commission is looking for.   Thought what was necessary is some form of override. Should take each certificate and it should be required - how does the Commission go about insuring oversight. In that particular case you were talking about if money was required by the customer that there be a performance bond posted? You may not have had that in mind for electric restructuring.
Commissioner Smith asked the company - does the delay in Idaho participation in any way diminish what they hoped to learn from this tariff?
Tom Dukich of WWP replied - not really. Administratively it is not as straight forward but it would still be of value going forward, for Idaho. Also what is of value, it was part of their policy to discuss these - does it require regulation, etc. One of the purposes of the filing was to try some things out. Washington is light handed regulation. You can put requirements on the brokers. It is a trial. One of the advantages is having the supplier, would get a little different tack on it in Idaho.
Commissioner Hansen said he had re-examined the ESSA and going back and evaluating our order, maybe he could support this, this is one he is not willing to agree to until he feels comfortable and he doesn’t feel comfortable. I can’t support it today.
Commissioner Nelson asked if Commissioner Hansen would like to conduct an evidentiary hearing or ask for briefs?
Commissioner Smith said it was her understanding that staff is in favor of going forward with this. If they do, can they speak to it?  
Commissioner Hansen said it would be helpful to him if it could be spelled out.
**Will get information together for the commissioners by Friday.
5. Scott Woodbury’s August 30, 1996 Decision Memorandum re: PL____(HR3448) - Repeal of Tax on Contributions in Aid of Construction (Water Utilities). (Held from 8-26-96 Decision Meeting).
*Syd Lansing was in attendance at this time.
Commissioner Nelson said he was in favor of a generic order.
Decision was to put out an order speaking to contributions in aid of construction. All commissioners agreed.
6. Scott Woodbury’s August 30, 1996 Decision Memorandum re: Case No. UPL-E-96-3 - Power Purchase Agreement Earth Power Resources, Inc.
Scott said this is what remains of UPL’s filing. They are in general agreement that these matters can be dealt with by amendment. **It should be clear it is pending.
Should we represent that this is a contract that is stand-alone or someway link it to the declaratory ruling? Company says it is a project that they want to purchase. In talking to the developer...they assured staff that they have every intention of pursuing this.
Commissioner Nelson said he wanted to ask the accountants about their reaction?
Rick Sterling spoke to the adjustable not being what we would think of as adjustable. Since we know what it is going to be for the next 20 years, it seems to apply the Commission will be issuing an order every year and that is the case.
Commissioner Smith asked - don’t we have to put it out on notice?
Scott Woodbury replied the commission usually doesn’t put them out. Discussed the concerns informally and it appears it would be worked out by amendment.
Could contact the parties and ask for an amendment.
Okayed.
Don Howell brought up the Phoenix Fiberlink matter regarding interconnection between Phoenix and U S West. The Commission under the federal statutes has 9 months to complete arbitration on disputed issues between LECS. That would be January 1, 1997.
Commissioner Hansen suggested that staff could put together come comments on how arbitration will work.
Don replied - staff was anticipating Commission would want that.
Meeting adjourned until Friday.
Dated at Boise, Idaho, this 19th day of September, 1996.
Myrna J. Walters
Commission Secretary