19970106_3.docx

MINUTES OF DECISION MEETING
JANUARY 6, 1997 - 11:00 A.M.
In attendance were Commissioners Ralph Nelson, Marsha H. Smith and Dennis Hansen. Also in attendance were staff members: Don Howell, Scott Woodbury, Weldon Stutzman, Brad Purdy, Keith Hessing, Joe Cusick, Stephanie Miller, Terri Carlock, Dave Schunke, Rose Schulte, Birdelle Brown, Rick Sterling, Tonya Clark, David Scott and Myrna Walters; and Larry Ripley and Sam Turner of Idaho Power Company; Ron Lightfoot from U S West; Conley Ward, Attorney at Law, Eileen Benner of AT&T and Alan Richey of Micron.
Commissioner Nelson called the meeting to order.
Items from the January 6, 1997 Decision Meeting Agenda were discussed and acted upon as follows.
First matter to be discussed was Item 1 - Petition for approval of Revised Depreciation Rates of Various Telephone companies - Case No. GNR-T-97-1.
Don Howell said the Petition was just filed on Thursday. It is to change depreciation rates for six USF companies. They are asking for a January 1, 1996 effective date, to make the adjustment for 1996. The petition does not seek any intrastate revenue at this time. It is primarily an accounting change. Think it is staff’s recommendation that we try to accommodate that request with a 21-day comment period.
Commissioner Smith said she had a question. Thought usually when we had depreciation rate changes that they got some kind of accounting letter from the Utilities Division Administrator.
Stephanie Miller, Utilities Division Administrator, said she didn’t think staff thinks its okay to approve the rates, what staff is recommending is that the companies be allowed to book the amounts effective January 1996 and save approval of the rates for later. Don’t have time to look at all that before February.
Commissioner Smith said she thought the companies could change their depreciation rates and they could book it and later look at rates.
Don Howell said the accounting letters that have been done before were to U S West for their accounting treatment.
Commissioner Smith commented the petitioners need to decide what they want. Do they want to book them or ask for propose rates?
Conley Ward, Attorney for the six petitioners, responded - said his hope was that the petition was clear. All they are asking is for authority to book effective 1-1-96. They have not asked for revenue requirement coverage.
Commissioner Hansen said that if that is what we are talking about we can do a letter.
Conley Ward said the question is what he needs for the Feds. He talked to Ray Hendershot about this. Did think a letter would be approved. Thought a safer way is to have an order of this Commission. This does not bind the commission to ratemaking. *Even a Minute Entry would be okay.
Stephanie Miller explained how U S Wets was handled. It was taken up at a decision meeting; decision was made to have her respond by letter.
Commissioner Nelson said U S West may not have been asking for approval from anyone else (but the Idaho Commission). If we have until February anyway, this gives all the parties a chance to think about the issues and how they would most like it done. Would like it to go out on modified procedure.
Commissioners Nelson and Hansen agreed to modified.
2. Scott Woodbury’s January 2, 1997 Decision Memorandum re: Case No. IPC-E-96-23 Amendment to Idaho Power-Micron Electric Service Agreement.
Scott Woodbury said he had circulated some additional documents. Reason for this is the growth has been less by Micron. Company states that they reached an agreement in principle prior to September 1 and then proceeded to draft the agreement. There was nothing filed with the Commission until November 14. Staff disagrees with the company that the only parties affected are Micro and the utility.   Under the sharing arrangement of excess earnings, staff contends that all customers are affected. Excess earnings are shared between shareholders and ratepayers. Staff has put a number on that difference between the date that they are requesting (September 1) and November 14 when the amended contract was filed. Staff has recommended that the effective date be the order signing date. Company and Micron are recommending September 1 the date they apparently reached the agreement in principle. Alternatively they are suggesting that it be the date of the filing (November 14) that was their intention. Staff has no problem with the contract changes, just the date.
Keith Hessing said on the amount of money that Micron would pay Idaho Power Company, September through December it would be $400,000.  
Commissioner Hansen asked if it would have an affect on their return on equity?
Keith Hessing replied  - since the revenues were less it would reduce that.
Commissioner Nelson said he was of the opinion that this did not have an affect on other rates so if the parties had reached an agreement we could go with the effective date of their agreement.
Their contract demand was 90,000 kwh and they want that to be 40,000.
Keith Hessing said they hadn’t reached the contract demand in the agreement.
Alan Richey of Micron explained this didn’t change the contract demand. It is 100 mw in general. What Micron is changing is the billing demand. The monthly billing rate. They actually fell below the contract demand earlier in the year and began negotiating with Idaho Power. September 1 was a reasonable date agreed upon. Fell below that several months earlier and there were negotiations after that. The contract demand is not going to change. Micron will still be obligated to the 100 mws until the year 2000. That part didn’t change. Micron will still have to pay some amount more than they are actually using. Under billing there was a minimum they had to pay. One of the requirements was still that Micron be bound by the 100 mw through 1997. Didn’t change that.
Keith Hessing said the actual billing demand increased as a result of this and the contract was reduced from 100 to 25. It dropped back to 25 for the minimum. They still have a rate they are paying which allows them to go 100 mw. That stays the same.
Alan Richey added: Micron is still paying a premium for that. There are actually two charges.
Commissioner Hansen said where it could have an effect on other customers, to reach back 2 ½ months before filing would be fair. Feel an effective date of January 1, 1997 or when we approve it today would be more appropriate. However, don’t have a problem going back to November 14.  Have a hard time going back and setting a date prior to it being filed. His recommendation would be now, but if the Commission goes back, would have a hard time going back past November 14.
Commissioner Smith said - knowing that for some time that Micron didn’t need the demand, was wondering, the September 1 date seemed to be the effective date of a number of things in the old contract. So maybe it was tied to the original contract date.
Commissioner Nelson said he would go with the September 1 date. Parties had an agreement that except for the sharing arrangement there is no affect on other customers.
Commissioner Smith said the question is: what took the paperwork so long?
Alan Richey replied - biggest problem was the right of first refusal when deregulation came about.   Actual terms were dealt with sufficiently but right of first refusal took some time from the legal negotiation standpoint - thus the delay.  
After discussion, there were two votes for November 14.   Commissioner Nelson also went along with that.
3. Scott Woodbury/Rose Schulte January 3, 1997 Decision Memorandum re: Petition of Sunbeam Water Users.
Scott Woodbury reviewed the current situation regarding Sunbeam Water users. It is a small water company with water quality problems, DEQ and customer notification. There is currently a boil order in effect. There is a question as to whether the customers have been properly notified.  DEQ has the enforcement tools available to it to enforce both civil and criminal penalties. However, staff is unaware if there have ever been fines imposed. Majority of customers have petitioned this Commission to look into this matter. Staff suggest that we open a docket for investigation and that staff go out and sit down with the customers and the company. They are concerned about the water quality. Company has had some long occurring problems with fitting the requirements of the Safe Water Drinking Act. If DEQ were mor aggressive in treating the problem, we wouldn’t have to be involved. We do have jurisdiction and customers are concerned.
Commissioner Nelson said he would be in favor of staff meeting with customers, the company but not DEQ.
Commissioner Hansen asked if staff could have an informal meeting with them?   Said he questions the PUC getting into a joint venture with DEQ. Don’t have a problem with staff meeting with them. Under the code, we do have some responsibility but it is a DEQ issue.
Rose Schulte said for a long time the customers were afraid to come forward and now they have a spokesperson who is aggressive. Said she last talked to her right after Christmas.  
Commissioner Smith asked if they were still boiling their water?
Rose said yes - the test failed and last Thursday Pumpco came out and treated the water but didn’t do DEQ recommendations. DEQ says it is the whole system. Mr. Parrish hasn’t picked up his latest letter from DEQ.  
Rose said the customers had no one else to turn to.
Scott said Mr. Parrish has been talking to Rose.
Rose said her question is - why do we permit this company to be a regulated utility?
Commissioner Smith said the problem is she didn’t know what we can do. Water quality standards are not ours. Seems to her we could require timely notice of boil orders. If he is not picking up certified mail, could fine him for that. It is a frustrating situation but don’t want to give the customers the impression that we can make him perform.
Rose said the rates are low. The customers know that. They are afraid to drink the water. Customers don’t know who else to turn to.
Commissioner smith asked about what enforcement DEQ and EPA do?
Scott said DEQ is the enforcement arm of EPA.
Commissioner Hansen said if they don’t get satisfaction from DEQ, there are other sources.
Commissioner Smith said it would be good for us to get the message to the company about notice to the customers. If they are not going to run the company correctly they should get out of the business.
Commissioner Nelson said he agreed but he was not sure how to handle this.
Commissioner Smith said she thought staff should set up a meeting and go and tell Mr. Parrish if they are going to pose notice requirements. It ought to be hours, not days before notification.
Rose said it was all outlined in the boil order.
Commissioner Smith said they are somebody else’s rules, we can’t enforce them. Maybe we can contact the Governor’s Office.  
Commissioner Hansen commented we are not in that corrective phase.
Commissioner Smith said it wouldn’t hurt to tell Mr. Parrish that we have had continued problems and he should get out of the business.
Matter is to be kept informal at this time.
4. Birdelle Brown’s January 3, 1997 Decision Memorandum re: GTE Advice 96-15 to Revise GTE Toll Rates and Introduce Two New Calling Plans, Effective February 11, 1997.
Commissioner Nelson said he had a couple of questions on this. Asked about the $750,000?
Thought that was less than 1% of revenues.
Birdelle commented she now had information from GTE about the business plan but not the residential.
Weldon Stutzman said because they are changing rates, they are required to give notice to the customers.
Birdelle said notice has been given.
*Probably should allow time for comment. Put it out on modified procedure.
Commissioner Smith said she thought the Commission ought to hear what people think about it.
Commissioner Nelson said - suspend the tariff and request comments.
5. Brad Purdy’s December 31, 1996 Decision Memorandum re: Case No. UPL-E-96-4; Application of Utah Power & Light Company for approval of Revisions to Its Line Extension Tariff - was under Fully Submitted Matters - Commission adjourned regular decision meeting and will deliberate this matter privately.
Meeting adjourned.
Dated at Boise, Idaho, this 7th day of January, 1997.
Myrna J. Walters
Commission Secretary