19970514_2.docx

MINUTES OF DECISION MEETING
May 14, 1997 - 10:15 a.m.
This decision meeting was a “special decision meeting” to consider two Idaho Power Cases - IPC-E-97-5 1996 Earnings Compliance filing and IPC-E-97-6 Fifth Annual Power cost Adjustment filing. (Copies of the decision memorandums are attached to the published agenda for this meeting and set out the decisions to be made).
The meeting was held in Commissioner Marsha H. Smith’s Office and was a teleconference decision meeting with Commission President Dennis Hansen in Soda Springs, ID and Commissioner Ralph Nelson in Salt Lake City, UT. In attendance in Commissioner Smith’s Office, in addition to Commissioner Smith, were staff members Brad Purdy, Scott Woodbury, Kathy Stockton, Keith Hessing, Stephanie Miller, Terri Carlock and Myrna Walters.  Also in attendance were Larry Ripley and Ric Gale of Idaho Power Company and Peter Richardson, Attorney at Law.
Commissioner Hansen called the decision meeting to order.
Brad Purdy gave a brief overview of his Decision Memo regarding Case No. IPC-E-97-6 - PCA adjustment case.
Commissioner Hansen asked for questions. Said he had a question on ICIP’s concerns with DADS. Because of not being as familiar with these, when Idaho Power talks about short term contracts in the past and how it benefited the customers over 6.5 million, is that pretty well factual that they have made short term contracts in the past without commission approval and that had benefit of that kind of revenue to the customers, or was he confused?
Brad Purdy replied that the Company has made those types of contracts.
Keith Hessing explained. Said staff hasn’t audited that number. Have no reason to believe that they haven’t made those kinds of sales.
Commissioner Hansen asked what the difference was between those and DADS? They are selling at a reduction, what is the difference of going out on the spot market and selling on short term basis without commission approval or getting involved in Arizona Power without approval, is there a difference?
Keith Hessing said if there is a difference, staff expects that when the company enters into those contracts they are entered into at a net profit. Don’t expect them to loose money.
Commissioner Hansen asked - to your knowledge, the company has not entered into any where they were including this as a revenue loss?
Keith said not to his knowledge.
Commissioner Nelson said he thought that the contract with Arizona Public Service was more of a contract in the normal course of business although it had a clause for Commission okay. Thought accounting adjustment there was in order since we don’t  usually give prior approval. Said he thought a bit differently about DADS. Had some confusion of how he would treat it so his suggestion would be to remove revenues and cost of revenues so we took the whole program out.  Believe those revenues were like 12 or 13 mills a kW hour. Would take that out of costs. Make that experiment a non issue for the PCA.
Commissioner Smith said her thoughts were a little different. Commission has encouraged the utilities to try different things. The reason that it appears that they are not making money is that we haven’t separated the costs into different functions, and therefore there is no rate to call out to allocate to this service..was just wondering if the company did increase to recover those costs, isn’t it collecting twice - those are some of her thoughts.
Commissioner Hansen asked if Commissioner Smith was agreeing with staff?
Commissioner Smith said she was agreeing with what the company filed.   She had another question for Keith Hessing about the PGE contract (on page 6 of the decision memo).
Keith Hessing said the auditors look at the contracts captured in the PCA, don’t have knowledge of what contacts have been captured in the past. Have no reason to believe that the company misrepresented that.
Commissioner Smith said then it seemed to her that it cuts in favor of the company’s position because it would put the two on the same treatment. You wouldn’t be singling out DADS.
Commissioner Nelson asked if it was the company’s proposal that they include the revenues from  DADS and include average cost of growth of 16.8 mills?
Keith Hessing replied it was his understanding that the PCA  mechanism captured the cost of service of  the load and they have offset those costs with actual revenues as well.
Commissioner Nelson said he still felt the same way about offsetting revenues with costs of DADS.
Commissioner Smith said she would accept how the company has filed it.
Commissioner Hansen asked about other issues? Proposed effective date was another issue. Asked the other commissioners if they wanted to go through each item?
Commissioner Smith made a motion to accept the company proposal and offset the revenue with
costs at actual revenue they are getting. Commissioner Hansen said he would second that.
Commissioner Nelson asked about clarification?
Commissioner Smith said it was revenues they are actually receiving. That was her motion.
Commissioner Nelson said he thought he was going to stick with taking DADS out and making that revenue neutral. Would vote no on the motion.  
Motion carried two to one - Commissioners Smith and Hansen for; Commissioner Nelson against.  
Stephanie Miller said what Commissioner Nelson wants to do will result in the same amount the other commissioners want.  
Larry Ripley, Counsel for Idaho Power asked to clarify to Commissioner Nelson what the company does not do , it has not isolated what the costs are to provide service to the DADS customers; thought Commissioner Nelson had assumed company has  categorized costs. Company has not done that.  So when you are saying isolate the costs, company does not have capability to isolate for various categories.
Commissioner Nelson said he would agree that the outcome would be no net difference with what company is proposing.   Asked if taking total costs and adding DADS revenue, was 10 mills?
Larry thought the revenues were closer to 12.
Commissioner Nelson said he would consider the Arizona Public Service contract at the 16.84 mills.    All commissioners agreed to that.
Brad Purdy asked about the rest of the questions on the decision memo.  
Commissioners agreed the commission should accept the accounting adjustment proposed by Staff and that the $2.5 million one year buy-out of Valmy minimum delivery requirements was okay.  
Discussed how company has booked it.
Kathy Stockton said staff is not sure it imputes earnings at this point.  
Commissioner Nelson asked - if we are making true ups, wouldn’t it affect next year?
Terri Carlock said the Company did propose true-ups for next year.  
Commissioner Nelson suggested studying this issue further and proposed that staff talk with the company and work it out and do it in the true up for next year.
Commissioners Hansen and Smith agreed.
Implementation date: Commissioner Nelson said he thought the company thought the timing was tight also.    Thought allowing additional time was a benefit.
Commissioner Smith said the only question for the company is how strongly they feel about this?
Ric Gale said the company doesn’t need an extra week. Start to get into the irrigation accounts later in the year, having them have mixed rates.
Commissioner Nelson asked if that issue could be held and discussed at the next meeting.
Scott Woodbury reviewed his decision memoradum regarding Idaho Power Company’s 1996 Earnings Compliance Filing.
Scott reviewed the matter. Said company indicates appropriate revenue available for refund is $3,474,622. Comments have been filed by FMC, ICIP and staff. FMC and ICIP opposed the proposed adjustment for DSM. It was staff’s contention that the customer be given the reduction today and then charge larger in the future. Company’s response to FMC and ICIP cited staff language. Company is present at this decision meeting,  as is the counsel for ICIP.  
Commissioner Hansen called for questions from the Commissioners.
Commissioner Nelson said he didn’t have any questions. Would comment that he would accept staff propose because he is very concerned about expenses at this point and the accounting treatment we have given.
Commissioner Smith said she felt like Commissioner Nelson does. Had a question of Peter Richardson. Does he still feel the same about this now?
Peter Richardson said at this point he would stand by the original comments of ICIP.  
Commissioner Nelson made a motion to accept Cmpany’s filing. He would move that the company’s proposed 1996 earnings filing be accepted; seconded by Commissioner Smith; passed unanimously.
As there was no other business, the telephone conference/decision meeting was adjourned.
Dated at Boise, Idaho, this 20th day of May, 1997.
Myrna J. Walters
Commission Secretary