19970415_1.docx

MINUTES OF DECISION MEETING
April 15, 1997 - 1:30 p.m.
In attendance were Commissioners Dennis S. Hansen, Ralph Nelson and Marsha H. Smith and staff members Don Howell, Bob Smith, David Scott, Syd Lansing, Birdelle Brown, Bev Barker, Marge Maxwell, Jean Jewell, Don Oliason, Terri Carlock, Wayne Hart, Stephanie Miller, Scott Woodbury, David Hattaway and Myrna Walters. Also in attendance were Joe Miller, Attorney at Law and Jeannette Bowman of Idaho Power Company.
Matters listed on the 4-15-97 Agenda were discussed and acted upon as follows.
Commission President Dennis Hansen in presiding over his first decision meeting, announced that he will conduct the meetings a little bit differently.   He will ask each person who has something on the agenda to review their memo as it comes up, and give their recommendation;   will then ask the Commissioners if there are any questions. Will then call for  a motion and vote.
Commissioner President Hansen then officially called the meeting to order.
Regulated Carrier Matters - No. 1 - Discussion of possible motor carrier rule suspension in light of recent federal court ruling.   Since no decision memo was received on this matter, it will be forthcoming at another decision meeting.
2. Birdelle Brown’s April 7, 1997 Decision Memorandum re: Petition to Expand the Arbon/Rockland EAS Petition, Case No. GNR-T-976-5.
Birdelle reviewed the Memo - said that staff in investigating the EAS matters has been looking at them as if the customers were going to want all the EAS available. This filing is a confirmation of what staff is already doing.
Commissioner Nelson said he would recommend expanding the scope of the existing EAS docket - GNR-T-96-5, but he would rather open another case.
Commissioner Smith said she thought staff probably was looking at this and since we already have an open case, she would say it is all at issue in this matter and would like it all decided in this matter.
Commissioner Nelson said his preference was to bring the current case to a close.
Commissioner Hansen said in review - there are several suggestions on this and he would now put it before the Commission. Asked all in favor of opening a new case to say aye.  
Commissioner Nelson voted to open a new case; Commissioner Smith opposed the motion.
Commissioner Hansen had to break the tie. Said he would just as soon do it as one case. Would support Commissioner Smith on this.
3. Birdelle Brown’s April 10, 1997 Decision Memorandum re: Century Telephone of Idaho Advice 95-5 to Update the Idaho Telephone Assistance Program (ITAP) effective 5-1-97.
Birdelle said this is an update of ITAP for Century.   She explained the calculation of ITAP - this is Century’s application of that.
Commissioner Hansen called for the question.   Asked in comparing rate to other telephone companies, would this be about the same as theirs?
Birdelle responded - they will vary from 6 cents to 14 cents. This falls within that range.
Commissioner Nelson said he would move that the Commission accept the compliance filing.
Approved unanimously.
4. Birdelle Brown’s April 11, 1997 Decision Memorandum re: U S West Advice 97-05-S to Provide EAS in the Treasure Valley effective 4-25-97.
Birdelle reviewed the filing.
Commissioner Hansen said U S West had some billing problems when they transferred over Twin Falls area. Asked if that was going smoothly now?
Bev Barker responded that the problem had not been taken care of yet.
Commissioner Hansen ask if this will be done right this time?
Birdelle Brown said staff had gotten assurances.
Commissioner Hansen asked staff to check into that.
Commissioner Hansen said since there were no questions, he would call for the question.
Commissioner Smith moved approval of the filing. It carried unanimously.
5. Bob Smith’s April 10, 1997 Decision Memorandum re: Case No. GNR-W-96-1 Investigation to Determine Whether Valley View Subdivision, Inc. is a Water Utility Subject to Commission Regulation.
Bob Smith explained that Valley View Subdivision is just south of Kamiah, Idaho.  The matter has been open since March 1994. There are 49 customers on the system. December of 1995 Valley View Water District was formed. A sale was to have taken place. June of 1996 a formal case was opened. Staff proceeded to investigate and on February 10, 1997 filed its report with the owner and customers for comment. Received a few comments, mostly from the company and one customer. Comments from the attorney had to do with policy. Staff didn’t feel there was any information filed to change their recommendation,  and report was filed with the Commission along with this decision memo. In the report staff recommends taking jurisdiction, issuing a certificate, setting new rates, customers complying with rules, and  that the owner of the system  separate his billing so that the water system charges are specifically identified separate and apart from those for sewer. Staff further recommends that the company engage an engineer to make recommendations regarding over pressure problems on the system, installation of pressure valves and investigate additional water supply. Current supply is less than adequate. Staff recommends a moratorium be placed on new connections until new source of supply is found. Staff doesn’t believe that the case can be seen thru to closure without a hearing; recommend issuing a certificate and setting hearing or do it on modified procedure.
Commissioner Smith commented it seemed to her that the one main issue raised is do we really have jurisdiction? Think we need to afford them the occasion for due process to see if they are a public utility. Commissioner Smith also questioned the fact that staff Alternate #4 has the same $20.00 rate as the company, but the numbers aren’t the same, how could it generate the same amount of money?
Don Oliason was asked to respond. Said the revenue requirement was a total of $16,355.96 on Exhibit 104. Believe that is just about what the company actually earned in the year staff analyzed (approximate revenue collected).
Commissioner Nelson said he wondered if the difference in numbers was bad debt.
Don Oliason further commented - existing rates did generate more than what he used.
Commissioner Hansen asked if that was an item we could have staff get back to the Commissioners on?
Commissioner Nelson suggested continuing current rates and going forward.
Bob Smith said for clarification, the owner did not request a formal hearing but did request an opportunity for further comment.
Don Oliason said the present rate produces $20,500 and rate staff recommended is for $16,300.
Bob Smith clarified revenue collection because of bad debts as pointed out by Commissioner Nelson, revenues that have been collected are about $16,000. Company has a significant amount of bad debts. This is just the most recent case.  Staff also believes that a public hearing is unavoidable. Ultimately it will require a hearing.
Commissioner Nelson made a motion to set it for hearing; Commissioner Smith seconded the motion.
Was discussion on clarifying the motion to say - don’t want to set rates subject to refund.
Commissioner Nelson clarified his motion - that a formal hearing in this case be set and that the current rate be continued until the Commission has had a chance to rule on it.
Motion carried unanimously.
6. Marge Maxwell’s April 11, 1997 Decision Memorandum re: Washington Water Power company’s Tariff IPUC No. 26; Revision to Sheet 158 to Reflect a City of Mullan 1% Franchise Fee for Natural Gas Service and
7. Marge Maxwell’s April 11, 1997 Decision Memorandum re: WWP’s Revision to Sheet 58 to Reflect a City of Mullan 1% Franchise Fee for Electricity.
Marge reviewed the two filings. They are pass-thru franchise fees for gas and electricity service in the City of Mullan, ID.
Commissioners unanimously approved staff recommendation to accept the filings as submitted.
8. Scott Woodbury’s April 11, 1997 Decision Memorandum re: IPC-E-97-4 Amortization of Certain General Plan Accounts Request for an Accounting Order.
Scott Woodbury reviewed the filing. Staff requests it be processed by modified procedure.
Commissioner Hansen asked if there were any questions.
Commissioner Nelson said he would move approval of the modified procedure.
Commissioner Smith asked why it just couldn’t be approved?
Scott Woodbury responded that staff’s proposal is a little different from WWP’s proposal and there are concerns about staff audit of those items.
Commissioner Hansen then called for the question. Passed unanimously to consider it on modified procedure.
9.  IPC-E-97-5 Idaho Power Company 1996 Earnings Compliance Filing.
Scott Woodbury reviewed the filing. Amount is $4,890,518 for last year. Company proposes to reduce that amount by accrued interest on DSM which would reduce it to $3,474,629. FMC has petitioned to intervene. Staff recommends modified procedure.
Commissioner Hansen asked if commissioners had questions or concerns?
Hearing none, Commissioner Smith made a motion to accept staff recommendation; Commissioner Nelson seconded the motion; passed unanimously.
10. Annual Assessment Rate of Utilities and Rail.
David Hattaway asked the commissioners if they found the assessments set out on his decision memos (Utilities and Rail) to be proportionate and adequate to cover expected expenditures for FY 1998?
Commission Nelson said he noticed that the recommended assessment is within 1/10th of 1% of last year and he would recommend approval. Passed unanimously.
11. Revised Local Exchange Tariffs - for Payphone Service - addressing FCC Dockets 96-128 and 96-388 - Deregulation of Payphone Equipment - requested effective date of 4-15-97. (Wayne Hart had 9 separate decision memos and a Tariff Summary Sheet for consideration of the Commissioners.
Wayne explained that the existing local exchange companies are to separate out their 62 operations and unbundle the rates that they charge. The FCC delegated to the commissions of each state the responsibility of reviewing intrastate tariffs to insure that they have not established criteria or terms that would give unfair advantage to them versus independent 62 operators. Were also to review their access rates. Each company was to file those tariffs January 15 and they are to be effective April 15. All 9 of the decision memos (independent companies under GVNW are under one decision memo) indicate each company did file January 15. He has reviewed all of them. For the most part staff accepted that they have (all companies did unbundle their tariffs) and deserve separate rates for different payphones. Had concerns on GTE and US West South in terms that they may have prices on independent components that may be viewed as anti-competitive but at this point we are not sure that that is the case. Company has provided some evidence that it is not the case but independents are not sure that they buy that. Only one of the companies has revised their access charges (PTI).U S West and GTE indicate that when they looked at their payphones, at the same time you pull the investment out of the rate base you also have to pull the revenues. There was no subsidiary in the CCL charges. The other small companies all make the claim that we have looked at it and it is so small it isn’t worth making a change. They recommended no changes now but when they make USF changes. Staff recommends that be accepted.
In most cases payphones is a fraction of a % of their revenue. We are recommending approval of all the tariffs. On U S West South, continue to monitor the impacts (the two sections staff is concerned with), recommend monitoring too, to see if it develops into anti-competitive.
On GTE there were only two pages that could be  pulled from what we are approving now and leave them as they are and work with the Company. One is answer subdivision and pull that page to get that information on pricing. The company agreed that that would be acceptable. That gets the tariff on the books and they would qualify for compensation.  
Commissioner Hansen asked if there were questions?
Commissioner Nelson said he would move approval with the addition of staff recommendations.
Commissioner Smith commented that apparently on April 11, MCI and AT&T filed their emergency request with this Commission. Asked Wayne if he get that? It indicates intrastate rates are to be adjusted to remove payphones and no one has changed their intrastate rates.
Wayne responded anything regarding intrastate charges came in after that (April 11). Will be glad to share that information with MCI and ATT. Most of it is proprietary.
Commissioner Hansen recognized former commissioner, Joe Miller, who wanted to comment.
Mr. Miller said it is unusual to make comments at a decision meeting but this is a very significant matter from an interexchange carrier’s point of view. Currently they pay $6 a month to compensate payphones for dial around. Under the new rules it goes to over $40 a month. This is a significant revenue impact. The intent of the FCC was to insure that all other subsidies that exist in the local exchange carrier rates are removed so interexchange carriers don’t pay twice. The petition alleges that in the 14 states of the U S West territory for U S West alone, would be as much as $50,000,000. It is an allegation, don’t have process today. Would request that if the Commission is inclined to approve unbundling elements and their rates are appropriate that the Commission continue with that but we aren’t satisfied that the subsidy issue has been adequately addressed. Think there are two bases that the commission should consider this on. (1)  As customers of local exchange companies we have some right that the rates should be investigated when they are inappropriate under state law and have indicated that in our petition.  (2) The FCC orders require the state to insure that payphone costs for subsidies are removed for local exchange rates and access rates, are removed from those rates. At this point it seems we have an assertion from the local exchange companies that there aren’t any subsidies but utility companies make all kinds of assertions and there hasn’t ben an investigation that this is in fact the case. Even though we haven’t seen staff’s information, just glanced at staff memo on GTE, each of the other memos have something similar. Think the acceptance of company assurance without an investigation isn’t what the FCC contemplated. As a state commission, owe customers right to an investigation. Apologize for speaking at a decision meeting but because of the timing, request that if the commission is inclined to approve unbundling and not approve subsidy, can certify that these companies are entitled to dial around but adopt proceedings to consider this.
Commissioner Smith said she had questions now. Asked what would be the effect of Joe Miller’s recommendation?
Wayne Hart said companies would lose $45 a month.
Joe Miller responded  - April 7 order of the Commission provides 45 day extension from the April 15 deadline. They wouldn’t get the money for 45 days.
Commissioner Nelson said he hadn’t seen the MCI/ATT request. Was disappointed staff didn’t bring it up with the tariff filings.
Wayne Hart apologized, said he should have.
Commissioner Hansen said he thought Commission had to act on the unbundling. Asked if there was the 45 day cushion on this?
Joe Cusick responded that wasn’t his understanding of the 45 days. Said there are parties that are not represented here today. There are reasons why they would like to see the Smart Line/Dumb Line go into effect. There is a benefit to approving Smart Line/Dumb Line aspect of this but could delay subsidy issue.
Wayne Hart said in reading this, he didn’t catch a 45 day extension for the state commissions.
Commissioner Hansen asked if we held this for one week as suggested by Commissioner Nelson, would it cause a problem?
Don Howell said where there is doubt about the evidence before the Commission, you are going to be damned if you do and damned if you don’t. Maybe it can be looked at in a week’s time. Wonder if the companies provided the staff with information that would show their plant- in- service accounts which go to payphones, have they been removed from rate base? Think that would be easy to put their hands on. This is one of those things that the feds have put a requirement on the state commissions and don’t know what kind of time lines these came in but here we are at the threshold. It wouldn’t be imprudent to get more information.
Joe Miller said the obvious point is the new dial around compensation is all new money so it is not as if companies are losing anything - $45 is all new. It is hard for him to see that there is harm in a further investigation.  
Commissioner Hansen asked if it was the desire of the Commission to hold this one week?
Commissioners voted unanimously to hold this for one week.
Commissioner Smith asked if the PTI filing should be approved because they have revised their access rate?
Wayne Hart said staff has not critically examined what they sent in.
**Will hold all matters for one week.
12. Case No. GTE-T-97-5 Processing of GTE’s Application to determine and fix rates of depreciation for several classes of its depreciable property.
Don Howell reviewed the filing. Staff wants discovery responses before they do modified. They would recommend notice of application at this time.
Commissioner Smith said she would ask the same question - if they are not asking to change rates, then why wouldn’t we say fine, go ahead and do it. Why not let them get as much off the books as they can?
Don responded - in this particular case the company has put a little twist on this. They are not asking for any revenue increase but if the Commission will approve accelerated rates they will rely on them in the future. Other issue is when we compare these depreciation rates, these are faster and more accelerated then those in the U S West case. Commission has also approved new lives for GVNW companies.  
Commissioner Hansen asked if staff couldn’t address their concerns with going modified procedure now?
Don Howell explained the timing problem.
Commissioner Nelson asked what procedurally do we do if we issue a notice of application?
Don Howell responded.
Commissioner Hansen asked what the pleasure of the Commissioners was?
Commissioner Nelson said it is an application requesting specific result so he would approved the notice of application and let staff do their discovery.
Commissioner Smith said she would like some commitment from staff on time frame.
Don Howell said it was his understanding that the discovery is ready and staff can do it as an order asking them to accelerate their information.
Terri Carlock said once the production response is back, she would call the company, don’t know what the time frame is.
Commissioner Hansen asked all in favor of accepting Commissioner Nelson’s motion to process by notice of application in timely fashion, to say aye. Passed unanimously.
Meeting was adjourned at 2:30 p.m.
Dated at Boise, Idaho, this 21st day of April, 1997.
Myrna J. Walters
Commission Secretary