19980323_3.docx

MINUTES OF DECISION MEETING
March 23, 1998 - 1:30 p.m.
In attendance at this time were Commissioners Dennis Hansen, Ralph Nelson and Marsha H. Smith and staff members Scott Woodbury, Carolee Hall, Weldon Stutzman, Joe Cusick, Syd Lansing, David Scott, Rick Sterling, Tonya Clark, Ron Law, Bob Smith, Cheri C. Copsey and Myrna Walters. Also in attendance was Jeannette Bowman of Idaho Power Company and Conley Ward, Attorney at Law.
Commissioner Hansen called the meeting to order.
Items from the published March 23, 1998 Decision Meeting Agenda were discussed and acted upon as follows.
1. Minutes of March 11, 1998 Decision Meeting (Minutes had previously been reviewed by the Commissioners and corrections made).
Commissioner Hansen made a motion to approve the Minutes; motion carried unanimously.
Items 2 thru 11 on the Consent Agenda portion of the IPUC Decision Meeting Agenda were then considered.
Commissioner Hansen called for discussion or questions on these matters.
Commissioner Nelson made a motion to approve all the items on the consent agenda; motion carried unanimously.
15. Cheri C. Copsey’s March 20, 1998 Decision Memorandum re: Idaho Power Company’s and FMC Corporation’s Application for Approval of a Special Contract for Service to FMC Corporation and a Revised Schedule 28--FMC Tariff and for Approval of Revisions to the Power Cost Adjustment of Idaho Power Company as a Result of the New FMC Contract, Case No. IPC-E-97-13.
Cheri reviewed the decision memo.  
Commissioner Hansen asked for questions or comments from the commissioners.
Commissioner Smith commented that she voted in favor of granting the intervention originally and she was still there.
Commissioner Nelson said he didn’t see anything in the petition for clarification that would cause him to change his mind so he would reaffirm the original decision.
Commissioner Hansen said he was of the same opinion as Commissioner Nelson and would still vote to deny participation in the hearing. He then made a motion to deny Solutia’s request for reconsideration. Vote on the motion was 2 to 1 with Commissioner Smith voting no.
12. Scott Woodbury’s March 20, 1998 Decision Memorandum re: Case No. HPN-W-97-2 Hayden Pines Water System.
Scott Woodbury reviewed the decision memorandum. Commission initiated an investigation and indicated that Hayden Pines would be the provider until the Commission determined otherwise. Staff recommends that the matter now be scheduled for hearing in order to determine the case status, etc. Would recommend that it be scheduled as soon as possible, into April. He has already communicated his intention to the parties in the case.
Commissioner Hansen called for comments or questions.
Commissioner Smith asked Scott if he meant hearing, or rather prehearing?
Scott responded - prehearing.
Commissioner Hansen said the question is does the Commission wish to proceed to prehearing?
Commissioner Nelson made a motion that the matter be set for prehearing conference. Motion passed unanimously.
13. Scott Woodbury’s March 20, 1998 Decision Memorandum re: Case No. HVW-W-98-1 Happy Valley Water System Change in Ownership.
Scott reviewed the decision memorandum.
Staff recommends that the Commission suspend the certificate of Mr. Davis, appoint Mr. Dunnick as interim operator and put this matter out to notice. Provide notice to all past owners and direct as part of the commission’s order that payments from March 1 on go to the operator/manager Mr. Dunnick and prior payments go to Zeke Davis and any disputed billings by customers be reported to Commission Consumer Staff for processing in the normal fashion.
Commissioner Smith commented that she was concerned that the Commission needs a record.
She wondered if there was enough record to pull someone’s certificate. Didn’t object to the proposed outline but didn’t want to be sued later if the court finds Mr. Davis owns the system. Understands there needs to be a reputable person to accept payments, etc., but this isn’t in the record. Second concern is Mr. Dunnick’s qualifications and if he needs to be bonded while this is sorted out in the courts. Don’t know how to set out to get a record to suspend the certificate and appoint Mr. Dunnick  and don’t know if he is going to perform any better than Mr. Davis.
Commissioner Nelson said he thought there was enough information filed with the Commission to show enough doubts to suspend the certificate of Mr. Davis. Did wonder about turning it over to Mr. Dunnick without a proceeding. Wondered if there was any chance of having Mr. Roe being trustee in the meantime.
Scott responded that that possibility was discussed and he did discuss with Mr. Roe that possibility and he was willing. In talking with the Dunnicks that would not be their favored alternative. Scott did attend a meeting with the Dunnicks, DEQ, and some of the customers, last week. Explained what Mr. Dunnick proposed. Staff believes that Mr. Dunnick has the support of all the customers at the meeting. They have been frustrated in their experience with Mr. Davis.  Did discuss with Bob Smith what a reasonable fee for someone like Mr. Roe would be and decided $500 a month for management and maintenance. However those expenses were spread over a 12 months period and company would now be moving to higher operating expense period.  Thought costs could be kept down by keeping management at a lower cost. Seems the pressing question to the customers right now is who should they pay. They have letters from Mr. Dunnick saying I own the system, pay me and letters from Zeke Davis saying pay me.  
Commissioner Nelson made a motion that the certificate issued to Mr. Davis be suspended and Mr. Roe be appointed as trustee and negotiate an agreement with him.
Commissioner Smith said she could not vote to suspend anyone’s certificate until we have a record. We know nothing about Mr. Roe. There is no plan presented as to how he would handle the system, don’t have enough information to support this motion.
Was discussion on information sent to the Commissioners, attached to the decision memo.
Commissioner Nelson asked Commissioner Smith if she had a substitute motion?
Commissioner Smith said she just wanted to know how we are going to get the evidence.
Scott Woodbury said if the Commission feels the evidence is not here,  the matter can be set over for a week and staff can get more information.
Commissioner Smith asked if there shouldn’t be a show cause hearing? Asked what was needed?
Scott said he has yet to have a conversation with Mr. Davis. That is why he suggested setting it over for a week to come up with reasonable grounds for the Commission to consider.
Commissioner Smith suggested getting affidavits.
Commissioner Nelson said he feared that in a week bills will have gone out from Mr. Dunnick.  Think we need to do something now. That is why he was suggesting that Mr. Roe the Water Master for Hayden Pines for the past 20 years seemed agreeable to him.
**Commissioner Hansen said there was a motion before the Commission. Commissioners Nelson and Hansen voted for Commissioner Nelson’s motion; Commissioner Smith voted no.
14. Scott Woodbury’s March 20, 1998 Decision Memorandum re: Case No. GNR-W-97-1 Valley View--Final Order No. 27328 Petition to Reconsider Cross Petition and Objection to Petition to Reconsider.
Scott reviewed the decision memo.
Commissioner Hansen called for questions or comments.
Commissioner Nelson asked if this wasn’t a fully submitted matter.
Scott explained. Said if it is viewed as a petition for reconsideration it could be set over to fully-submitted matters. If it is a petition for clarification, Commission can decide that it needs further action such as notice for comment.
Commissioner Nelson said there are five points to consider.
Scott said if it is viewed as a petition for clarification the proper procedure would be to notice it up.
Commissioner Smith commented she thought this matter had been drug out long enough and the Commission should stick with the order issued originally. Think nothing needs to be added on jurisdiction. On #2, if you are a public utility you can only charge what is in the tariff. If they want collection authority outside their tariff they can try and make a case. That has nothing to do with us. 3. We don’t need to tell them to file a rate case, they can file anytime they want. 4. We have been open to having third party installation services performed. The utility is ultimately responsible to have a safe, reliable system.  As long as they understand that is their responsibility, they can file a tariff to allow this. If it costs them more than $500 to make the installation they do have something called rate base, maybe they don’t understand that. 5. Think some advance notice is required. That may be the only thing that needs clarification. Think the Commission should just issue an order denying reconsideration.
Commissioner Nelson said he would agree with that. When they filed vacation rate they could have put in 10 days. Agreed it could be covered in a tariff.  
Commissioners Hansen and Nelson concurred with Commissioner Smith’s comments.
16. Carolee Hall’s March 10, 1998 Decision Memorandum re: U S West Communications (NORTH) Advice 98-01-N Requesting Approval to Make Additional Options to its Calling Card Service; to be Effective April 1, 1998.
Carolee reviewed the memo.
Commissioner Smith made a motion to approve the tariff advice; it passed unanimously.
Commissioner Hansen welcomed the new staff engineer, George Fink, who was in attendance at the decision meeting.
The meeting was then adjourned.
**After the adjournment of the decision meeting, Commissioner Hansen asked to meet to reconsider the decision previously made regarding Happy Valley Water System.
In attendance at that time were Commissioners Dennis Hansen, Ralph Nelson, and Marsha Smith and staff members Scott Woodbury and Myrna Walters.
Commissioner Smith stated that in order to suspend a certificate there needs to be evidence that the holder has failed to perform the reasonable and expected duties that are required when you have that kind of responsibility. Affidavits of whatever kind, indicating that he hasn’t adequately provided service, that he doesn’t take care of duties like paying the power bill, etc., failure on his part to provide the duties of a public utility, need to be obtained.
Scott said that the Dunnicks contend that Zeke Davis doesn’t own the system anymore.  
Commissioner Smith asked what the law requires? You can’t take a certificate away without just compensation for it.
Commissioner Hansen said what we are worried about is justifying a “just cause”.
Scott said Commission has filings that have been made with the Kootenai County Recorder that the escrow agent has conveyed the system to the Dunnicks.
Commissioner Smith suggested taking each question separately.
1. To suspend or do anything to the certificate you have to find they are failing to provide services. That is a separate question from the disputed ownership. If the main problem is who do people pay, we can note this disputed ownership and during the process of the resolution of the dispute, payments are going to be made to some un-involved third party so there is no question about that.
Commissioner Nelson said whoever collects the money will have to have authority to pay the bills.
Commissioner Smith said she thought we were on real thin ice on certificate law if we take away Mr. Davis’ certificate without a showing about safe and adequate service.
Commissioner Nelson commented that what happened is that Mr. Davis defaulted on the note.
Commissioner Hansen asked if the Commission could move to nullify the previous action taken earlier in the meeting and reconsider this item at the decision meeting on March 31, is that a possibility?
Commissioner Smith asked Scott Woodbury what kind of evidence was needed so that if we had to we could show a court we had a reasonable basis to take this action?
Scott said he didn’t have a problem with establishing a documentary record showing transfer of ownership but you need the underlying contract which we don’t have.
Commissioner Smith said she thought the Commission needs to look at Title 61 and say Mr. Davis’ behavior doesn’t cut it.
Commissioner Hansen said you can’t take his certificate without evidence. If he called our bluff, what would we say?
Scott commented his conduct is aggregious but you can’t take this certificate for that. It is based on change of ownership. Said his recommendation was based on change of ownership which he thought was sufficient to find reasonable cause to issue notice and suspend management of Zeke Davis and provide Davis with opportunity to come in here and show why it should be otherwise.   They are still in negotiations to purchase the system.
Commissioner Nelson asked - didn’t they fail to meet financial obligations?
Commissioner Smith asked if the Dunnicks have filed a competing application for service or for a new certificate?
Scott replied that there is a filing from them to transfer the certificate to them from Zeke Davis.  Suggested that perhaps that is the basis for finding that while the Commission sorts this out the payments go somewhere else without bothering the certificate that has been issued.  Second step is harder. What kind of process do you need to determine who the person will be to do that interim management and what kind of assurance (bond) is needed while customers are paying money, that they are doing it appropriately.
Commissioner Smith said she felt unprotected hiring someone to do that without some kind of assurance. But know that gets epxensive. Don’t want to create expenses that will fall on the
customers. That is the hard part. Can we just pick somebody? How are we going to guarantee their performance?
Scott said he agreed that with a system this small there is not much money for bonds and management fees, billing, etc. Discussed using Roe of Allied Water - would it be Roe personally or Allied Water? Would it be reasonable to use Dunnick if he posted bond? Perhaps not where he is one of the parties. Suggested staff could work with Dunnick regarding appropriate accounting procedure, it would be less costly to go that route.  
Commissioner Smith recommended staff coming up with suggestions:   Somebody who can read the meters, send out the billings, pay bills and collect payments.
Commissioner Hansen said he thought Mr. Roe would be appropriate.
Unanimous decision made was to rescind the original motion made earlier in the decision meeting and hold for more information from Scott Woodbury.
Dated at Boise, Idaho, this 26th day of March, 1998.
Myrna J. Walters
Commission Secretary