19980511_1.docx

MINUTES OF DECISION MEETING
May 11, 1998 - 1:30 p.m.
In attendance were Commissioners Dennis Hansen, Ralph Nelson and Marsha H. Smith and staff members Brad Purdy, Scott Woodbury, Ron Law, Terri Carlock, Weldon Stutzman, Birdelle Brown, Joe Cusick, David Scott, Keith Hessing, Randy Lobb, Lynn Anderson, Bev Barker, Tonya Clark and Myrna Walters. Also in attendance were Mike McGrath of Intermountain Gas Company and Larry D. Ripley and Ric Gale of Idaho Power Company.
Matters from the Published May 11, 1998 Decision Meeting Agenda were considered and recorded as follows.
Commission President Dennis Hansen called the meeting to order.
1. Minutes of April 29, 1998 Decision Meeting (Minutes have previously been reviewed by Commissioners and corrections made).
Commissioner Hansen made a motion to approved the minutes; motion carried unanimously.
CONSENT AGENDA - Items 2-7.
Commissioner Hansen called for questions/comments regarding any items on the consent agenda.
Commissioner Nelson made a motion to approved all consent agenda items; motion carried unanimously.
MATTERS IN PROGRESS
8. Weldon Stutzman’s May 4, 1998 Decision Memorandum re: Case No. GTE-T-98-1; Interconnection Agreement Between Sterling International Funding, Inc., dba Reconex and GTE Northwest.
Weldon reviewed the decision memo. Staff suggests the Commission allow the agreement to become effective after 90 days by operation of law.
Commissioner Smith questioned how that would work. If the Commission does nothing, does it go to the FCC?
Weldon responded. If a state Commission fails to act on a negotiated agreement within 90 days it becomes effective by operation of law. The agreement was submitted on February 23, 1998.
Commissioner Nelson said he thought inaction sounded like a good course. Thought it was fine to let it go into effect without action. Made that in the form of a motion.
Motion carried unanimously.
9. Scott Woodbury’s May 7, 1998 Decision Memorandum re: Case No. INT-G-98-2 Firm Distribution Only Transport Service (Schedule T-4); proposed Modifications to Schedules LV-1, T-1, T-2 and T-3.
Scott reviewed the matter. This is the filing of a new schedule - T-4. It is applicable to new customers with larger loads. Company also has proposed an exit fee. Company proposes a lottery system for waiver of the fee. Company has requested this be processed by modified procedure. Staff is not opposed to processing it in this manner but does suggest a 42 day comment period to June 24. Decision meeting have not been scheduled yet, for June. Is asking the Commission if modified procedure is appropriate.
Commissioner Smith said she would prefer that if the comment period is lengthened it be to 35 days. The 24th of June is cutting it pretty close for a July 1 effective date.  
Commissioner Nelson agreed that would work well.
Commissioner Smith said she would then move that the application be processed by modified procedure with a 35 day comment period. Motion carried unanimously.
10. Scott Woodbury’s May 7, 1998 Decision Memorandum re: Case No. INT-G-98-3 (Proposed IGC Tariff Advice No. 98-1) Proposed Standards for Competitive Practices.
Scott reviewed the matter. Noted that the heading listed this as a tariff advice and formal case.    Company asks that it be treated as a tariff advice. Staff recommends formal case, using modified procedure with a 45/60 day comment period.
Commissioner Hansen said he didn’t  have a problem with making it a formal case and soliciting comments under modified procedure. However, as Commissioners stated in an earlier decision meeting, the Commission doesn’t want to go back and hash out what happened in the past. Would want to make sure the comments were made to the filing Intermountain Gas has made now.
Commissioner Smith said she didn’t care what you call it but she did think that  what the Commission envisioned was customers commenting; but didn’t know if public meeting  was necessary. Do think a formal case is needed and if a public meeting would help; if things need to be handled in a face to face meeting, that could also be held; whatever time is needed.
Commissioner Nelson said he didn’t think this was an emergency - would suggest 45 day comment period.
Scott said he thought 60 days would provide appropriate time but would concur to the 45 days.
Commissioner Nelson made a motion to go ahead and process this as a formal application, under modified procedure, with a 45 day comment period.
Motion carried unanimously.
11. Idaho Power Company Power cost Adjustment Application - Case No. IPC-E-98-5.
Brad reviewed the matter . This is Idaho Power’s annual PCA filing. These filings have a quick turn around time; thus no decision memorandum. Commission put it out on modified procedure.  Only party commenting was Commission staff. Staff brought up a couple of points. 1. It notes that it has some concerns about deferral of QF costs and that perhaps something needs to be done to take those costs out of the PCA or factor them into the base rates. The staff recommends no action at this time but that the parties work together to come up with some solution to that.
(2) FMC Contract. Because it was recently renegotiated and approved by the Commission there are some changes to how revenues are collected from FMC. This has an effect on the PCA . Company and staff have agreed upon a modification to the manner in which the PCA accounts for FMC revenues. It is set forth in staff comments. Company filed a response to staff comments and they do agree with staff on the FMC methodology. The remaining point of contention involves what staff termed  rate stability.   This current PCA filing is a substantial increase over current rates. It is 4 some percent over base rate; however because we were operating under a PCA reduction, staff has proposed that a portion of this year’s increase be deferred (broken up into 2 pieces). A portion to be deferred for next year’s PCA adjustment. The company came back in its response and objected to that noting that the Commission’s order establishing the PCA mechanism (ON 24806) does contain a mechanism to deal with larger increases; but Idaho Power says this is roughly only 4% over base. It is simply Staff’s position that a portion of this PCA should be deferred.
Commissioner Nelson said he did think that after 5 years something like this needs some fine tuning. CSPP costs have grown. Would like staff and the company to look at how to handle this every year there is a surcharge. We do have a permanent increase built into PCA for CSPP. Because that is now becoming such a substantial amount, have to think that this is beyond reasonable. For that reason would approve the PCA as filed with the adjustment for FMC which was a good piece of work by staff and the company. Would recommend approving as filed with FMC contract change which would give 8.64% increase over base.
Commissioner Smith said she would also approve the PCA as filed with FMC adjustment. It was widely advertised and staff was the only one who commented. Don’t think it was anticipated that a larger than 7% increase would occur because change was from extraordinarily good water and this credit situation. Cannot go with staff recommendation because she is  not willing to take the risk. Next year’s problem could be worse if  part of this year’s revenue requirement isn’t all taken now. In a sense of fairness that it is operating as it should, to smooth out bumps, it is uncomfortable. It is a large increase and we need to explain the reason for it  to the customers. The PCA mechanism is operating as anticipated.  
Commissioner Nelson made his comments into a motion, to approve the proposed PCA change with the change to the FMC contract included.
Motion carried unanimously.
Dated at Boise, Idaho, this 14th day of May, 1998.
Myrna J. Walters
Commission Secretary