19990714_1.docx

MINUTES OF DECISION MEETING
July 14, 1999 - 1:00 p.m.
In attendance were Commissioners Dennis Hansen, Marsha H. Smith and Paul Kjellander and staff members Terri Carlock, Tonya Clark, Keith Hessing and Bill Eastlake. Also in attendance were Larry Ripley, Maggie Brilz and Greg Said of Idaho Power Company and Peter Richardson, Attorney at Law.  
Commission President Dennis Hansen called the meeting to order at 1:00 p.m.  
First order of business was consideration of the minutes of the July 6, 1999 Decision Meeting. The June 28, 1999 minutes were held as they had not circulated to all the Commissioners.  
Commissioner Hansen made a motion to approve the July 6, 1999 minutes; vote was taken; motion carried.
Next order of business was the item on the Consent Agenda - Weldon Stutzman’s July 12, 1999 Decision Memorandum re: Application of Nextlink Idaho, Inc. for a Certificate of Public Convenience and Necessity - Case No. GNR-T-99-1.
Commissioner Hansen asked if there was either discussion or questions on this item?
Commissioner Kjellander made a motion to approve staff recommendation. Vote taken; motion carried.
MATTERS IN PROGRESS
3. Weldon Stutzman’s July 12, 1999 Decision Memorandum re: Case No. IPC-E-99-2; Idaho Power Company’s 1998 Revenue Sharing Compliance Filing.
Terri Carlock, in Weldon’s absence, reviewed the matter. The revenue sharing amount is $3,281,878. Staff recommends that the revenue sharing balance, less intervenor funding, be deferred with interest until May 16, 2000 and then be refunded to ratepayers over the one-year period that coincides with the PCA rate adjustments. FMC and Schedule 19 customers would prefer the one-time credit and do not believe the other issues are significant to drop that credit.  Industrial customers argue that if the amount is deferred, that the interest rate is too low.
Commissioners are being asked: (1) Should the filing of Idaho Power and its proposal for refunding the 1998 revenue sharing amount be approved? (2) Should the recommendation of the Commission Staff be approved, along with the clarifications recommended by Idaho Power Company and (3) Is some other option appropriate: For example, issue an immediate credit to the contract and Schedule 19 customers and defer the balance of the funds until next spring?
Keith Hessing also supplied a Decision Memorandum Addendum to provide more detailed information to assist the commission in its decision.
Commissioner Hansen called for questions or discussion. He asked whether the industrial customers and FMC had had a chance to look at Keith’s information and if they did, is their concern not with the order that would direct revenue sharing as the Commission may have indicated earlier, as much as they are concerned that they want their money now? Asked if that was their concern? Do they have a preference?
Terri Carlock responded it appeared they were silent on that, so she didn’t know their position.
They were stressing that they wanted the refund now.
Commissioner Hansen asked Peter Richardson if his main concern was that his clients receive their credit now?
Peter responded that was their primary concern, to not have it deferred until the next PCA case.  Said he had not had a chance to look at the spread sheet prepared by Keith Hessing, would probably  have an opinion on that, but primary concern is getting the refund sooner than later.
Commissioner Kjellander asked if his clients were concerned with the 5% interest being too low?
Peter Richardson replied they would rather invest it themselves than have it sit in Idaho Power’s bank.
Commissioner Smith said she wondered if the Commission has ever deferred the refund and applied the interest rate?
Terri replied that the Commission did in 1997 and ‘98; they were deferred past the PCA time for that purpose. Have not done it in others.
Commissioner Smith said the interest rate does bother her some.
Terri said the interest rate was one developed; it was based on customer deposits.
Larry Ripley of Idaho Power commented. Said when the company deferred the prior amounts the Commission supported it and told the company to use the interest rate that the commission had determined for deposits, it was then 6%. When the Commission’s order came out on interest for 1999, it was set at 5%.
Commissioner Smith asked if the company could get more than that? Perhaps it should be tied to the short-term interest rate.   She asked, on Keith’s calculation, why did the Company do it differently than the Commission had ordered?
Larry Ripley responded - (1) it was inadvertent (2) the contribution to the deferral is based on actual usage in 1998 and accordingly thought to refund the money it should be on the same basis as how it was collected.
Commissioner Smith asked - why does the company say the contribution was based on that?
Larry Ripley said looking at ‘98 earnings the Commission looked at what classes contributed the revenues that created the dollars being refunded. It is different than what the commission order intended. However there is an additional problem. The Commission’s order when the settlement was set up as to the year, used 1993 normalized revenue to come up with this allocation. Although it makes little difference to the Company, if you are going to use normalized revenue, thought the Commission should use 1998 to make the spread instead of 1993. Expect that will reduce the gap between how the Company did it and how Keith did it. Don’t know if FMC or others know it is based on 1993.
Commissioner Smith asked Keith Hessing if he thought it was appropriate to use 1993;  did he use it because he believes there is something more accurate about the way it was originally than and now?
Keith said he thought the Commission might  order it differently, even though revenues are covered on KWHs and  the components that make up the energy rates are more than energy-related pieces. Think you are recovering more than energy related costs. Don’t have any problem with using 1998 but don’t think we have those numbers that he could have used. It may provide a more accurate refund.
Commissioner Smith said she would prefer using that for the calculation.
Larry Ripley said he was told staff has those numbers. If not, he can provide them.
Commissioner Smith said she indicated  a preference earlier because she thought the PCA swing was drastic this year and she anticipated  it could go the other way next year and one of her thoughts was to hold the money. So if a spread can be determined where the industrial customers get theirs back and the other customers’ refund is held, she would prefer that.
Larry Ripley said the Company can do that but would ask that the Commission in the order provide that the revenue refund to the Schedule 19 customers be as of a date certain. As the Commission knows, a Schedule 19 customer this year can be a Schedule 9 customer next year.  A Schedule 9 customer this year can be a Schedule 19 customer next year. Don’t want to have to answer to that.  
Commissioner Smith said this is a ‘98 revenue matter, so thought a date could be picked - December 31, 1998 or January 1, 1999. Don’t know if those customers make determination on fiscal or calendar year.
Larry responded it is based on consumption.
Commissioner Smith asked Keith Hessing for a recommendation?
Keith said he thought any date would be fine.
Larry said the Company just didn’t want uncertainty.
Commissioner Kjellander said he had a question on the residential customer class? What was the average amount to be refunded for residential?
Keith said he didn’t do that kind of a calculation.
Maggie Brilz of Idaho Power responded it would be about $4.50.
Terri Carlock ask the Commissioners if they were going to wait to see the ‘98 numbers and do an order based on those?
Commissioner Hansen said a motion had not been made yet.
Commissioner Smith then made a motion that the Commission calculation be based  on 1998 average revenues, refunding immediately to the Schedule 19 and special contract customers and holding the rest until next year’s PCA case, that being the amount of $3,281,878, with interest paid being the amount of interest paid on customer deposits (5%) and that the Schedule 19 refund is based on customers as of December 31, 1998.
Vote taken on motion; carried unanimously.
Meeting was adjourned.,
Dated at Boise, Idaho, this 16th day of July, 1999.
Myrna J. Walters
Commission Secretary