HomeMy WebLinkAbout20010404.min.docMINUTES OF DECISION MEETING
APRIL 4, 2001 - 1:30 PM
In attendance were Commissioners Paul Kjellander, Dennis Hansen, and Marsha Smith.
Commissioner Kjellander called the meeting to order. The first order of business was approval of items 1-3 on the CONSENT AGENDA. He asked if there were any questions or comments regarding items 1-3. Commissioner Smith said she had a question on item 3. She noted that Staff had proposed immediate amortization and she wondered if the Company also thought it was a good idea. Terri Carlock replied that she didn't ask the Company because there have been other issues where Staff proposed immediate amortization and the Company didn't object. Commissioner Smith moved for approval of the Consent Agenda. A vote was taken and the motion carried unanimously.
The next order of business was MATTERS IN PROGRESS:
Judy Stokes' April 2, 2001 Decision Memorandum re: Pocatello Business Office Transition.
Ms. Stokes reviewed her Decision Memorandum. Commissioner Hansen said he agreed with Staff that there should be signage advertising Idaho Power's payment area and that the employees at the pay stations who are taking the payments should be aware of the time it takes to process a payment so they don't leave customers with the impression the payment will be processed immediately. He acknowledged that store clerks won't have much knowledge about Idaho Power's operations, however, and it would be difficult to keep them trained. He suggested that on the signage there should be a phone number for customers to call Idaho Power if they have questions. Commissioner Hansen made a motion that the Commission decline to initiate a case in this matter. He said by establishing pay stations, the Company is giving its customers an opportunity to make payments.
Commissioner Smith said she agreed with the comments of Commissioner Hansen and she supported the motion. She said we have seen in the past that utilities have a hard time finding payment agents and she didn't think the training of the agent's employees with regard to Idaho Power's procedures would work. She agreed it is enough if people have a phone number so they can contact the company, that it is clearly made known to them that their payment will not be credited on the day the payment is made at the payment agency, and that they should contact the company if they have questions about their account.
There was no further discussion. A vote was taken on the motion and it carried unanimously.
Scott Woodbury's April 2, 2001 Decision Memorandum re: Tariff Schedule 22—Energy Buy Back (Temporary Program) Eligibility—1000 kW Load Reduction. Case No. IPC-E-01-04.
Mr. Woodbury reviewed his Decision Memorandum. Commissioner Hansen said he believed the proposed program is a good one and there is little risk as far as forecasting the price because it is of short duration. He said he hoped the company realizes that when it goes out and purchases the power that it is concerned and aware it is trying to get it for as low a price as possible while getting the participation it needs. He stated the program is to benefit the ratepayer as the company goes out and purchases the power. He added he is very supportive of the program.
Commissioner Kjellander moved for general approval of the company's proposed Schedule 22 request. A vote was taken and it passed unanimously. Commissioner Kjellander then entertained discussion on each of the program changes Staff had recommended:
Eliminating the penalty for failure to achieve 85% of committed load reduction. Commissioner Hansen stated he is opposed to this change since the program is voluntary and he felt the penalty the company proposed needed to remain. He moved that the penalty proposed by Idaho Power not be removed. Commissioner Smith said she felt the company adequately responded by pointing out a participating customer gets one event with no penalties and then there is a 30% compliance band, which she felt is adequate to give people some idea of how they need to restrict their usage. There was no further discussion and the motion passed unanimously.
No recovery of lost revenues. Commissioner Hansen stated he felt the issue could be decided in the end and he would be willing to give Idaho Power the opportunity to come and make its case to the Commission but he wouldn't be for granting it right now or for saying "no," either. He said that after the program has been completed, the company should have the opportunity to present its case for recovery of any lost revenue at that time and it should take its chances on whether their request would be granted. Commissioner Kjellander stated that in so doing, it would be treated the same way as in other buy back programs. Commissioner Smith said it is her understanding that in some of the previous programs they have approved the collection of lost revenues. John Hammond stated that in Idaho Power's irrigation buy-back program, the Commission allowed that the company could keep track of lost revenues, costs, and benefits in their account 555, reserving for later consideration what portion of lost revenue recovery would be appropriate after the company, all interested parties, and Staff had met to decide what level was appropriate prior to it passing through the PCA mechanism. Commissioner Hansen stated that would be his motion. There was no further discussion. A vote was taken and it carried unanimously.
Full prudence review prior to any permitted recovery of program costs (including a demonstration of prudent management of energy supply). Commissioner Kjellander moved for approval of this point. Commissioner Smith said it seemed to her that by the very set up of the program, if there was doubt about prudence, the program would not be implemented. She said she didn't know what would be gained by including this recommendation. Commissioner Kjellander withdrew his motion and the matter died for lack of a motion.
Clarification that a reimbursement of program enrollment costs is not triggered by a failure to accept any bid. Commissioner Smith stated she considered this point to be a question rather than a proposal. Mr. Woodbury replied that the company in its reply indicated that the program is voluntary, that the participants are not required to accept a bid but the company begged the question that was posed by the Industrial Customers of Idaho as to whether or not in the company's perception that not accepting a bid anytime during the program would require a reimbursement of the enrollment costs. Commissioner Smith asked if there was anyone from the company present who could answer the question. Commissioner Kjellander asked if he is correct in his understanding that any participating customer has to pay for the metering and some of the other enrollment costs up front. Mr. Woodbury confirmed that was the case. Maggie Brilz of Idaho Power stated that they have a section in their tariff that indicates that if a customer drops out of the program before the year is up the company may want them to reimburse them for the set up fee to get them enrolled mainly as a way to recover any costs should customers drop out of the program. She stated she didn't anticipate there would be any drop outs since customers aren't required to offer a bid if they participate. She said the company just wanted to be covered in the event the potential situation might occur but the company didn't anticipate it would happen. Commissioner Smith asked if a customer enrolls in the program and stays on a year, and for whatever reason they never choose to accept a bid, would they be considered as voluntarily terminated? Ms. Brilz replied they would not. Commissioner Smith said that clarifies that reimbursement is not triggered by a failure to accept bids.
Continued investment in permanent long term conservation and energy efficiency solutions. Commissioner Smith moved that the Commission encourage Idaho Power's continued investment in permanent long term energy efficiency solutions. There was no discussion on the motion. A vote was taken and it carried unanimously.
Company investment in long term demand side management (DSM) programs for residential and small customers. Commissioner Smith moved that the Commission continue to encourage the company to invest in DSM programs for residential and small customers. Commissioner Hansen said he is concerned that this language has nothing to do with this program. He said he thought the PUC has been pro-active in encouraging the company to be involved in demand side programs, and he had a problem with putting it in the order that the company should invest in long term demand side programs for residential and small customers. He said he felt they were trying to put too much into this order, so he was opposed to it. Commissioner Smith responded that she wasn't thinking the Commission was doing anything new but rather it was just reaffirming the Commission's previous commitments to those efforts and sending a signal that just because they are approving this program didn't mean it would replace other DSM programs. She said in her mind this point isn't new, different, or more but rather a reaffirmation that the Commission still thinks the other programs are important even though it is approving this program. Commissioner Hansen said given her explanation, he didn't have a problem with the motion. A vote was taken on the motion and it carried unanimously.
Credit for all profits related to market sales of oversubscribed power. Commissioner Kjellander asked Mr. Woodbury to explain this recommendation. Mr. Woodbury said it was a recommendation made by Astaris in its comments. He said Astaris is concerned there is an issue of timing and that the company may be buying power that it doesn't really need, and it should have the opportunity to re-sell that power and make a profit. He said this point just clarifies that the profits will accrue to the customers and it is more of an accounting issue. He said the company might have a different slant on it. Maggie Brilz of Idaho Power responded that because of the way the PCA works, if the company were to find itself in a position through this program or even the irrigation buy-back program where it had energy greater than its modes were, the company would sell the energy into the market and it would flow through the PCA. She said any benefit that would come from potentially being oversubscribed would go back to customers the same way any sale through the PCA would go back to customers. The Commissioners agreed that no motion was necessary since the recommendation is already a given.
No change to normal PCA modeling and deferral process. There was no discussion on this point.
Full disclosure of any involuntary curtailment plans. Mr. Woodbury said this point was also a recommendation of Astaris. He said Astaris stated that in order for participants to make a truly informed decision as to whether to participate voluntarily, they should know the company's plans for involuntary curtailment, if the company in fact has plans. He said Idaho Power did not address this recommendation in its reply. Maggie Brilz acknowledged the company did not address this point in its comments and she said she wasn't exactly sure what Astaris is asking for or referring to. She said the program is a same day, day ahead, or two-day ahead program, and Idaho Power does have operating plans that specifiy what would happen in the event there was a system situation where the company would need to be doing something to maintain the system's integrity by potentially involuntarily curtailing customers, but that plan doesn't identify certain customers or a series of customers but rather identifies the situation that needs to be addressed and the steps that go along with that process. She said she didn't think the company is opposed to sharing with customers what the general process is but there are specific operational parts to the plan that are confidential and not available to the public. She said she could certainly give Astaris some assurances as to what the plan generally entails. Commissioner Kjellander confirmed the company didn't need direction from the PUC in that it was already willing to provide what information it could.
Commissioner Kjellander stated that if there was no objection, they would skip the next bullet point (10.) and move on. Commissioner Smith moved for approval of the next three bullet points:
Establish subaccounts inAccount 555 to identify and track program costs and lost revenue.
Provide Staff with read only access to secure internet site.
Provide summary program performance report following completion of the pilot program.
There was no discussion on the motion. A vote was taken and it carried unanimously. The Commission moved on to the next item under MATTERS IN PROGRESS:
Doug Cooley's March 26, 2001 Decision Memorandum re: Revisions to Idaho Rural Exchange Carrier (IREC) Tariff Adjusting the Equal Access Recovery Charge (EARC).
Mr. Cooley explained that this item had been discussed at last week's Decision Meeting and he had more information for the Commission in response to the question as to who was at fault. He said in conversations with Rural Telephone, the company acknowledged it was at fault for not putting the EARC in its billing system and the company is willing to absorb the loss, which Staff estimates to be approximately $3,800 of the $5,853 amount. He said Rural will simply collect the approved equal access recovery charge for the remainder of the year. He said Direct Communications also acknowledged it was at fault for not collecting for the year 2000. He said that Staff estimates that if the company had been collecting for 2000, it would still have over $12,000. He said in his memo to the Commissioners, he outlined four options that address whether or not to forgive the oversight and whether or not to extend the recovery period in order to drive down the per minute recovery rate for Direct Communications. He said whatever the Commission decides, the Staff intends to monitor the program and there will be a final true-up to assure there is no over recovery.
Commissioner Smith questioned how much Direct Communications will have to absorb. Mr. Cooley replied that the amount is $4,300 of the approximately $16,000 that they were approved for. He said clearly if the company had been collecting in the year 2000 it still would have been an inadequate recovery rate. Mr. Cooley said the remaining $12,000 that would be collected in the remainder of this year would still generate a per minute recovery rate of over 6 cents per minute. He said it might be more palatable to the IXCs to extend the recovery period if the Commission so chooses and try to drive down the per minute rate.
Commissioner Hansen commented that he has a hard time coming up with too much sympathy for Rural and Direct because they did not put the charge into place last year. He said the companies should have to absorb that but he didn't have any problem with allowing them to recover the remaining amount over the course of the year 2002.
Commissioner Smith made a motion to approve the adjusted EARC rates for ATC, Cambridge, Fremont Telecom, and Rural, with the understanding Rural won't get what it didn't bother to collect up until now; and she made a motion that for Direct Communications, the Commission will extend the period in which it can recover its remaining costs to December 2002, with the understanding that what it didn't collect up to now it won't recover, either. There was no further discussion. A vote was taken on the motion and it passed unanimously.
John Hammond's April 2, 2001 Decision Memorandum re: In the Matter of the Application of Idaho Power Company for Authority to Institute a Pilot Program to Allow Irrigation Customers to Take Electric Service at Time-of-Use Energy Rates. Case No. IPC-E-01-6.
Mr. Hammond reviewed his Decision Memo. Commissioner Hansen stated that because of the limit of 300 participants, it might be wise to review the customer's ability to effectively shift load. He said if customers are allowed into the program and they have very little ability to shift load, then it isn't going to be productive for the ratepayers and the purposes of this pilot program. He stated the company should only accept those who offer the most potential benefit to the ratepayers, or accept them first, and later accept others if there is room in program. He said he also has a hard time seeing why customers who are in the irrigation buy-back program shouldn't be able to participate in this program. He said they are doing these kinds of programs as a benefit to the ratepayers and not necessarily because they benefit the irrigators. He stated he also disagreed with the recommendation that Idaho Power offer an irrigation specialist to counsel irrigators. He said most irrigators know quite a bit about how to water and how to use it. He said the cost and expense might be worth it if the program was for all irrigators, but with a maximum of only 300 participants, he was hesitant to put any extra costs on the company for an irrigation specialist to advise the participants.
Commissioner Smith said she thought it is a great program and a good thing to be piloting as well as a good time to be piloting it. She stated she is extremely disturbed, however, at the company's request that it be entitled to recover lost revenues, and she wasn't sure how the company planned to calculate those lost revenues. She said she is also disturbed at the company's not-so-veiled threat not to offer the program if recovery of lost revenue isn't approved. She said she would like some indication of the company's commitment to the program, regardless of whether lost revenues are determined to be appropriate or inappropriate.
Maggie Brilz of Idaho Power responded that as with other programs that the company has brought before the Commission in the past several weeks, the fact that the company has a PCA causes it to look at programs differently. She said normally, without a PCA, any utility that could reduce its costs by more than it would be reducing revenues would have a benefit that would flow to the company's shareholders and ultimately it would be a benefit to all customers. She said that because Idaho Power has a PCA and because the program will hopefully shift energy consumption from the higher priced hours to the lower priced hours, there will be a benefit that will flow through the PCA to its customers and to the company. She noted there is that balance in the PCA that gives the company incentive; however, the reduction in revenues the company will experience as part of the program is a true cost to Idaho Power and when one looks at the bottom line as to what it would cost Idaho Power to offer this program, the company will have that reduction in revenue. Ms. Brilz said that in order to design a program to encourage customers to shift load, there obviously has to be an incentive to those customers. She said the fact this is a voluntary program doesn't provide the company the opportunity to counter balance that reduction in revenue by collecting it from the other irrigation customers who don't choose to participate. She said at some point, when they have an opportunity to reset rates for all customer groups, the impact from a time-of-use program could be taken into account and the balancing will take place then. She stated that prior to that time, the benefits of reduced power supply costs flow through the PCA but the company continues to pick up 100% of the tab of the reduction in revenues, and therefore, without the opportunity to recover those costs through the PCA, the company feels it has a tremendous disincentive to move forward with the program. Ms. Brilz said the company sees the program as providing a benefit and Idaho Power would like to begin exploring the possibility of including more time-of-use pricing options to customers, but because of the immediate impact to the company, absent being able to shift the reduced revenues to some other group in order to collect them, it is not in a position to move forward without having some opportunity to recover those costs.
Commissioner Smith asked about the company's calculations of the revenue impact. Ms. Brilz replied the calculations were probably the cleanest out of all the customer groups. Commissioner Smith asked how that could be and how the company could know how much energy the customers would have used on-peak. Ms. Brilz stated this program doesn't reduce energy consumption but is targeted to shift when the consumption takes place. Commissioner Smith pointed out that the company is still getting revenue for every kilowatt that is consumed, and the company can't know for any customer how much they would have used on-peak without the program as they do with it. She said the company is just extrapolating some numbers to figure that out. Ms. Brilz replied that what will happen in the calculation is the company will have the total energy consumption by pricing block for each customer in the program and absent being on the time of use program, they would have the flat energy rate that is on Schedule 24, so the way to calculate the revenue impact is to total their energy consumption across all blocks and price it at the standard Schedule 24 energy rate, which is what they otherwise would have paid. She said the company will have the revenue from each pricing block for each customer to compare against, so it actually is a very clean way to measure the revenue impact. She added the company will have the total metered energy consumption revenue under the time of use rates and they can compute the revenue as if the customers had been on the standard Schedule 24 with the same price all 24 hours.
Commissioner Smith stated that she understood but she was frustrated with the company's position that it doesn't want to go ahead unless it is guaranteed the lost revenue will be recovered. She said this program seems different than the other buy-back programs in that the company is still getting paid for every kilowatt of energy, including the surcharge amount, and also, she assumed, for a compensatory rate for the cost, yet the company still wants more.
Commissioner Hansen asked Ms. Brilz that if the company will pull the program if the Commission does not allow cost recovery. Ms. Brilz said they have been given direction from management that the company's position at this point is that it doesn't want to move forward at this time with the program without having compensation for the reduction in revenue.
Commissioner Smith said she would like to inquire of the other Commissioners if they wished to institute a Commission program for time of day use by irrigators, which would look a lot like Idaho Power's program. Commissioner Kjellander said he thought that was an appropriate thing to discuss because he was having a hard time seeing the company's position.
Jeannette Bowman of Idaho Power said she did most of the analysis on the program and she could maybe help with some of the questions. She stated that in order to move to a cheaper time period, the company worked with its irrigation representatives and they were able to put the program together with a 50% discount for customers who shifted to off-peak. She explained the 50% shift in the revenues is outside the PCA, and they are only working with base costs and taking percentages off the base cost no matter what they would put to that base with the PCA being an independent variable that would rest on top of it. She said that even if they were to do 0 for the base cost, they would still have the PCA implications, so it wasn't put into the analysis because it is an extraneous piece. She said if the company is going to lower the price by 50%, in order to make that break even, they assumed the power costs would also dropby 50% because the company is having to make purchases at a lower price. She said the differential between what it was in last summer's market was more like a 20-30% difference, but it was not 50%, and in looking at the forward markets for this season, the differential between the on-peak prices and the off-peak prices are even less. She said if the forward markets are indeed correct, the company doesn't have the 50% differential in costs but it will have the 50% differential in its revenue stream when moving to off-peak.
Commissioner Smith said that when the PCA surcharge is added, the company is making up for some of that to the extent that a portion of that is based on the forward looking costs for summer—some of it is purchased power from the winter and about a third of it is the forward looking costs the company came up with. She noted the company is already getting a piece of that in the PCA.
Jeannette Bowman said the whole analysis is done outside of any PCA implications and a lot of the PCA piece is making up for last year's piece, and not necessarily the forward piece. Commissioner Smith pointed out that a third of it is the forward piece. She asked if the company is only doing it for 300 customers, how much money did the company think it could possibly be talking about. Ms. Bowman replied she did an analysis on 300 customers using the average, normalized usage for an irrigation customer in the summer of 2000. She said she did the calculations as if the 300 customers shifted it all to off peak usage and by her calculations, the company would be out $432,000. She also did other analyses, such as instead of shifting it all to off-peak, she figured it with 20% still on on-peak, 10% mid-peak, and 70% off-peak. Given that scenario, it was $172,000 the company would lose in revenue. She said the point being, no matter how much shifting there is from the high to the medium, from the medium to the low, or the high to the low, whenever there is a shifting downward, because of the PCA effect and the lost revenue effect, she was not able to build a scenario where the company's net effect is not negative. She said in the company's comments on the case, she gave an example that if the company had a lowering of $1,000 in purchased energy costs, under the current PCA, which has turned out to be an equitable mechanism for both the customers and the company, there is a 90-10 split, so out of the $1,000 in reduced costs, $900 of it will flow to the customers and $100 will flow back to the company. She said in order to save the $1,000 in expense, the company had to offer customers lower prices. She said if the customers moved all their usage to off-peak, the company would lose $400 in revenue. She said the total benefit to the customers is because they shifted to off-peak, and because they shifted they saved $900, or the 90% piece of the PCA cost, and they also saved themselves $400 because their charges weren't as high, so the net benefit to the customer is $1,300. She said the company gets to keep the 10% from the reduced expenses of the power costs, or $100, but it still has reduced revenues, so it has $100 in benefits but $400 in lost revenues because the company had to take a 50% cut in those revenues. Therefore, the company has a -$300 situation. Instead of having 90-10, the company has 130%—30%. She said the proportions track exactly to the 2000 summer prices and the proportions could be worse for the company this year.
Commissioner Smith asked if there are benefits to the company, other than cash, of having a program that shifts peak usage. She suggested some of the benefits to the company could be increased reliability, decreased chances of not meeting load and having to do rolling blackouts, which she assumed would pose some cost to the company.
Ms. Brilz replied there could be some benefits, although in the pilot program there will only be 300 customers so the company didn't expect a huge reduction in peak from these customers. She said the company has estimated potentially there could be a 15 megawatt reduction, which in the overall picture is not a huge reduction to peak. She agreed there could be some benefits as far as reliability issues.
Commissioner Smith said she really wanted to do the program but she didn't want to feel like she's been blackmailed, so she suggested that the company consider that the costs involved with 300 customers in the first year would not be very high. She said she encouraged the company to implement the program and if it turns out that the costs are high, the company should came back and let the PUC know. She said if it turns out the company is $400,000 in the hole, then the PUC should attend to that, but if it turns out the company is $50,000 in the hole, then maybe it was worth that amount and more to have the experience of the program and to be able to improve on it and hopefully go forward with it because she didn't think it was going to be a one-year program. She said in the alternative, the commission could start its own program and order all the utilities to participate.
Commissioner Kjellander asked if he could get a motion on the table and add points from Staff's recommendations to it as needed. Commissioner Smith made a motion to approve the Schedule 25 Irrigation Service Optional Time of Use Pilot Program with the following considerations: not require Idaho Power to offer the program to as many eligible irrigation customers as demand warrants since the company said 300 is about all it can reasonably handle, which is a good start for a pilot program; not require Idaho Power to adjust months or hours during this year, sticking with one program to see how it works, and then adjusting it in the future; not have Idaho Power screen out customers judged to have minimal ability to shift load because it would be difficult to identify the customers; allow this to be a program for those who are not participating in anything else because that's the way the company proposed it; not require the company to offer expertise to irrigators; leave open the questions of lost revenues. She said she didn't expect the lost revenues to be great and if they are, then the company should call it to the PUC's attention, because they will have time to do that before the next PCA to determine whether it would be reasonable at that time to include them.
Commissioner Hansen asked for clarification of the motion. He asked if it would allow those in the buy-back program to participate. Commissioner Smith responded that it would not. Commissioner Hansen said he is supportive of the program but he has a problem with a couple areas in the motion. He said all should be able to participate in the program and it should be geared to those participants who can shift load in order benefit the ratepayers. He said for these reasons he is voting against the motion and not because he is against the program.
Commissioner Kjellander said he was supportive of the motion and with regards to keeping it separate from the other buy-back program, a part of him wanted to see everyone engaged in it but since it is still a pilot program, he felt it might be difficult to assess the value of program further down the path if customers are allowed to participate in both programs.
A vote was taken and the motion passed on a 2-1 vote with Commissioner Hansen dissenting. The Commission then moved to the final item on the agenda:
John Hammond's March 23, 2001 Decision Memorandum re: In the Matter of the Application of Pacificorp dba Utah Power and Light for Approval of Its Proposed Electric Schedule No. 72. Case No. PAC-E-01-4.
Mr. Hammond noted this item had been on the Commission's agenda last week and the Commission had suspended its decision on the matter. He said Pacificorp had filed its Second Amendment to the Application of Pacificorp in response to the Commission's request to do so at the last meeting. He said previously the company had been offering the irrigation customers 12 cents per kilowant hour if they would disconnect their pumps. He said the company had come back with a different proposal and is now offering to pay irrigation customers who participate in the irrigation buy-back program 13.5 cents per kilowatt hour and those who choose to have their pumps disconnected 15 cents per kilowatt hour. He stated the change in prices also changed some of the parameters of the program regarding penalties, particularly with regard to those customers who have their pumps on. He said if customers who keep their pumps on use energy over a specified amount, they will be penalized at a rate of 27 cents per kilowatt hour. He said the company had also provided information that there are 4,500 irrigation customers on Schedule 10, 21 customers on the Firm Schedule,118 on Schedule B, and about 4,300 on Schedule C. He noted that in discussions with the company and its attorney prior to the filing, they had considered offering the customers on Firm Schedule more but when they determined there were only 21 customers on that schedule they decided it did not warrant raising the price.
Commissioner Hansen asked Pacificorp why it is worth 1.5 cents to disconnect the pumps when last week he asked the question as to why it is so important that people disconnect their pumps and he was told it probably wasn't a problem at all and the company was probably going to modify that requirement. He questioned why the company needed to put a value of 1.5 cents on it since they had discussed the problems an irrigator might have if pumps were disconnected.
Bruce Griswold of Pacificorp replied the reason for the incremental value is because if the pump is physically disconnected, the company knows it won't be on for the season and they can put that information into their load forecast, knowing they won't have to acquire power for that period of time. He said if the pump is physically connected, the irrigator is expected to nominate an amount that will be curtailed, and if something happens and they don't curtail, the company will still need to have the power available to serve them, so the value of having the pump off is worth 1.5 cents more. Commissioner Hansen asked if there is a tremendous penalty if a customer does use power while participating in the program. Mr. Griswold replied that the way the program is structured, a baseline will be established that the customer cannot exceed, and they established a 5% bandwidth, and the penalty will start after that. He said the company realized that because this is new territory, irrigators won't necessarily know how their usage will occur, so the company can reset the baseline for the rest of the summer if an irrigator exceeds the curtailment amount.
Commissioner Smith confirmed that irrigators will have the month of June to figure out whether or not they have hit it right. Mr. Griswold said the company will work closely with irrigators up front to establish the baseline and then use the month of June to figure out what will actually transpire. Commissioner Smith said she would like to congratulate the company on having that feature in the program, which she felt it is an excellent improvement to the program. She said if its worth it to irrigators to actually disconnect and turn off and if it's worth it to the company, she has no problem with it.
Commissioner Hansen said he agreed it is a big improvement over what the company offered a week ago and from what he had heard from irrigators, they are a lot more comfortable with the program and they understand it. He complimented the company on putting together a lot better package.
Commissioner Kjellander said he, too, wanted to compliment the company for making it easier for the customer to recognize when they will cross the threshold and be penalized. He moved for approval of the revised proposal presented by the company as Amendment 2. There was no further discussion. A vote was taken and the motion carried unanimously.
Having no further business, Commissioner Kjellander adjourned the meeting.
Dated this _____ day of May, 2001.
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COMMISSION SECRETARY
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