19980127_1.docx

MINUTES OF DECISION MEETING
January 27, 1998 - 1:30 p.m.
In attendance were Commissioners Dennis Hansen, Ralph Nelson and Marsha H. Smith and staff members Don Howell, Scott Woodbury, Cheri Copsey, Keith Hessing, David Scott, Joe Cusick, Stephanie Miller, Bill Eastlake, Allan Killian, Tonya Clark and Myrna Walters. Also in attendance were Larry Ripley and Ric Gale from Idaho Power Company; Tom Dukich and Bruce Folsum of WWP and Conley Ward, Attorney at Law.
Commission President Dennis Hansen called the decision meeting to order. Matters from the Published January 27, 1998 Agenda were discussed and acted upon as recorded herein.
First item on the agenda was Approval of the Minutes of the January 21, 1998 Decision Meeting.  Commissioner Hansen commented that the minutes had previously been circulated and reviewed and there were no corrections to them. He made a motion to approve the minutes; motion carried unanimously.
Items 2 thru 6 were on the Consent Agenda portion of the Agenda.
Commissioner Hansen asked if there were any comments or questions by the Commissioners in regard to any item on the Consent Agenda.
Commissioner Smith said she was curious as to why the comment period on Item 3 (Idaho Power/FMC Application in Case No. IPC-E-97-13) was extended to 60 days?
Cheri Copsey, Deputy AG assigned to the case responded that it was because of staff’s schedule, the complexity of the filing and the timing for the workshop recommended. It would leave ample time for questions, etc. Staff did not anticipate the process going longer than 60 days.
Commissioner Nelson said he was wondering if this schedule had been discussed with the parties?
Cheri responded that it had. Have not identified a date for the workshop, however.
After discussion of concerns with Item 3, Commissioner Nelson made a motion to approve staff recommendation on all items of the Consent Agenda. Motion passed unanimously.
MATTERS IN PROGRESS
7. Scott Woodbury’s January 23, 1998 Decision Memorandum re: Case No.WWP-E-97-11.
Scott reviewed the decision memo. Pointed out the difference in this proposal. Spoke to program costs. Staff recommends approval of the program with modification.
Commissioner Hansen asked for questions or comments?
Commissioner Nelson said that in reading this he thought there was a small part that didn’t balance. Quoted from Paragraph 2 on Page 4 - “The Company states that it is proposing to absorb one-third of the lost margin associated with the MOPS II pilot”. Decision Memo also spoke to the 17% of any actual lost margin being deferred. Asked what happens to the rest of the percentage?
Scott responded that it will be passed on to the customers - 50% of the lost margin.  
Commissioner Nelson asked what the total amount deferred in Idaho was?
Scott said  it was $218,000 not including any lost margin. That figure came about in the company’s reply. Company was able to show the calculation of that figure in response to a staff request in the State of Washington. The $836,000 figure also included some incremental MOPS I costs that will accrue in the State of Washington.
Bruce Fulsom and Tom Dukich of WWP were in attendance and spoke to the filing. Bruce explained that if 2,000 customers out of the 7,500 signed up for MOPS II, that would general $200,000 in lost revenue and $54,000 of that would be lost margin to be deferred. That would be spread among the allocations of lost margin to be deferred,  15 to 20 thousand dollars. That becomes a small part of the cost. Bruce explained the percentages.
Commissioner Nelson said by his calculation, the 1.161 million comes to about .2 of 1% over the year and over 3 years it would be 1/3 of that. Know staff has some concerns about this but if we are going to support pilot programs this is not a big price to pay.
Commissioner Smith asked - on page 2, talking about deferred cost treatment, it says “at that time,  if the company has not filed a general rate case by April 30, 2000 (i.e., within one year following the end of the MOPS II pilot)...” is that 2,000 correct or should it be 2,001?
Tom Dukich responded - there will be a 3-year hiatus. Agreed with Commissioner Smith that it should say 2001.
Commissioner Hansen commented that he saw a lot of benefit for the company and sees a benefit to the industry and understands that the company would be willing to share that information to the other industries, and sees that sharing  as a benefit to the PUC, but, didn’t see that many benefits to the current customers. Didn’t see a choice of alternate supplier. Has a concern that the customers are being asked to share the burden of the cost that outweighs the benefit that they will receive.   Was hoping Commission would have had a different proposal from the company for sharing the cost of the pilot program and was concerned and perhaps was overreacting about deferring costs to a later date, especially in light of restructuring of the electric industry. When we start deferring costs are we creating more stranded costs or costs that someone else may have to pick up? Said his choice would be to have the company look at the possibility of changing the cost allocation to pick up a greater portion of it, but that probably is not an alternative to the company. Said those were his comments. Asked what the pleasure of the commissioners was?
Commissioner Smith suggested having the company respond to Commissioner Hansen’s questions.
Tom Dukich responded that if the company does not file a general rate case the costs will not be recovered. In terms of the benefits to everyone, think it is a benefit to all customers, the information is used to the best result of the customers. Either way all the customers will benefit - not just the participants. The way the company evaluates the pilot, they are going to share the information. Alternatives offered can be talked about as the company goes along. On cost, it is the case where the majority of customers are in Idaho and the way the allocation is figured, only 1/3 of the cost is picked up by 2/3rds of the customers (those in Idaho). Washington Commission has decided that they are willing to go along with the production/distribution allocator.  
Commissioner Hansen then asked what the pleasure of the commissioners was?
Commissioner Nelson made a motion to approve Item 7. Commissioner Smith voted aye; Commissioner Hansen asked that the record show that he voted against the motion.
Meeting was then adjourned.
Dated at Boise, Idaho, this 27th day of January, 1998.
Myrna J. Walters
Commission Secretary