20010530.min.doc

MINUTES OF DECISION MEETING
MAY 30, 2001 - 1:30 P.M.

In attendance were Commissioners Paul Kjellander, Marsha Smith, and Dennis Hansen.

Commissioner Kjellander called the meeting to order. The first order of business was approval of the CONSENT AGENDA, items #1 and #2. Commissioner Kjellander asked if there were any comments or questions on either of the items. There were none and the items were approved.

The next order of business was MATTERS IN PROGRESS:

Scott Woodbury's May 15, 2001 Decision Memorandum re: Avoided Cost Variable Rate—Colstrip Final Order No. 28708—Petition for Reconsideration.

Mr. Woodbury reviewed his Decision Memorandum. Commissioner Smith asked if the Commission has an open and ongoing case to address the issues of the variable rate methodology for the QFs. Mr. Woodbury replied that the case at hand, in which there was a final order, was the case addressing the Coalstrip-related adjustable methodology. Commissioner Smith asked if there is another case other than the annual adjustment. Mr. Woodbury replied there is not.

Commissioner Hansen commented that the Commission has spent a lot of time and effort on this matter, and in looking at the Company's request, he didn't see any reason to include an escalator for the variable O & M costs. He said what the Commission included in the order is as close to being fair as to what we had in the past. He made a motion to deny the petition to reconsider.

Commissioner Smith said she supported the motion partially on the basis that the petitioners failed to allege the nature and quantity of evidence they could provide in the order and therefore didn't meet the rule requirements in that regard.

A vote was taken on the motion and it carried unanimously.

Commissioner Kjellander stated he wanted to move item #5 ahead of #4 because Pacificorp was waiting on the telephone to hear the discussion on that item.

5. Michael Fuss' May 25, 2001 Decision Memorandum re: Pacificorp's Schedule 2020-20/20 Customer Challenge Program Rider. Case No. PAC-E-01-07.

Mr. Fuss reviewed his Decision Memorandum regarding the modified 20/20 program.
Commissioner Kjellander noted the one-month lag time between what had been proposed for the 20/20 startup and the 10/10 program. He asked if Staff had inquired as to why it is going to take longer to get the 10/10 program put in place. Mr. Fuss said Staff did ask the Company and was told the programming for the 10/10 program is significantly different, and the Company had already started programming for the 20/20 program. He said the company didn't think it could get the new program completed and tested in time to make the original deadline. He confirmed that Staff felt it was a reasonable delay.

Commissioner Smith asked if the Company could switch the programs, starting the 10/10 first and the 20/20 second. Mr. Fuss replied that the 10% figure would still need to be programmed into their system. Commissioner Smith asked why they couldn't just use 10% instead of 20%. Bill Griffith, Director of Pricing at Pacificorp, responded to the question. Mr. Griffith said the two-tier program is quite a bit more complex from a programming perspective than the simple percentage off program that was originally designed, and that's the reason for the one-month lag in getting the second tier of the program operational. He said the Company has already programmed and tested the 20/20 program and it is now operational in Oregon and was approved also with the 10/10 supplement effective July 1st. Commissioner Kjellander reiterated Commissioner Smith's question as to why it isn't possible to get the 10/10 program going on June 1st. Mr. Griffith replied that at this late date, the bills going out on June 1st will have the 20/20 programming code that has already been developed, written, and implemented, and that code would have to be changed. He said it sounds simple up front to just change the numbers from 20% to 10%, but there are issues such as taxes and accounting and the way the program is linked that will make it a fairly extensive job. He said they wouldn't have time to check it and test it to make sure all the areas had been changed from 20% to 10%.

Commissioner Hansen commented that if the Company is really serious about saving energy and having a conservation program, the bar is still a little too high to make this an effective program. He said he is concerned that a lot of people can't save 10%, and for example, a lot of people in southeast Idaho don't have air conditioning, so that won't come into play as an energy-saving option. He stated that from personal experience, in the month of April, he and his wife decided they would see how much they could save. He said that although they didn't turn off the refrigerator or cook outside over a bonfire, they saved 7.8%, going from 712 kw to 656 kw, so they wouldn't have qualified for the program. He said that would probably be the case for a lot of customers, and they will be discouraged and question why they should try to achieve 10%. He said the PUC started a contest to see how much employees could save on a monthly basis compared to last year, and out of 18 people participating, only three saved more than 10% on their electrical consumption. He stated his concern is that we are putting in a program that is really not encouraging people to conserve because the bar is so high they can't make it. He said he will support the program because it is better than nothing, but he still is concerned as to why it can't begin down in the 5% range. Commissioner Hansen said he is also concerned about the short time period involved. He said he recalled that early last fall or winter, Pacificorp was concerned about the price it was paying in November and December for power on the market, so he questioned why the Company wanted to end the program in September and not a least carry it through the end of the year.

Mr. Griffith from Pacificorp responded that in terms of saving 10%, it is a four-month program that runs through the summer season. He noted that for customers without air conditioning, one of the ways the Company is suggesting saving energy is to dry clothes on the line rather than using electric dryers, which will involve a fair amount of savings. He said the Company has sent bill inserts with May bills to its Idaho customers that give customers tips to achieve energy savings. Mr. Griffith said that without air conditioning, you have a lower base to start with but savings can be achieved by drying clothes on the line, running full loads of wash rather than partial loads, using the microwave instead of the range, and turning off light bulbs and computers. He said these tips will be circulated to the media as well. He said the Company thinks the 10% is achievable, although it will certainly be a push, but any savings a customer makes will still be a savings. He stated another reason for keeping it at 10% is that they are weather normalizing it and taking all the weather risk. If the summer is cooler than last, customers who have air conditioning will be able to do very little and still end up with savings, so they are trying to keep it simple—just 10% off of last year's bill for the same month—and by keeping it simple there are things such as weather they aren't adjusting for. He said in terms of the time frame, the Company is still looking at what to do after the four months, and the Company views it as an experimental program it can learn from. Mr. Griffith said the Company is in agreement with Staff's recommendation to provide a report to the Commission at the end of the study. He stated the Company is concerned that in the winter these kinds of programs could have some public safety concerns for some of their customers, so summer is a simpler and safer time to implement the programs rather than in winter, although they are still grappling with the issue of whether the programs can be extended beyond the summer.

Commissioner Hansen said he wanted to clarify if the 10% was also going to run for four months. Mr. Griffith replied that the 10/10 will actually run three months, starting July 1st, and the 20/20 will start June 1st and will run for four months, with both programs ending September 30th, 2001.

As a follow-up to Commissioner Hansen's question, Commissioner Kjellander asked if from a programming perspective it would be all that difficult to continue the 10/10 program through the end of October so there could be a full four months for each program and customers wouldn't feel slighted if they didn't get the opportunity to be in the program for four months. Mr. Griffith replied that the Company is looking at a different market in October, which is a shoulder month, and in looking at capturing resources and savings from the program, it is the summertime where the Company wanted to achieve the savings to get the benefits. He said the Company believes that in October there might not be similar benefits. He said they could run the program a month longer but from a resource perspective it didn't have the same meaning in October as it does in the summer months.

Commissioner Kjellander stated that he really would like to see all of the program start up at the same time and end at the same time. He said he recognized that it isn't a give away program.and there needs to be some benefit to the Company, and if October turns out to be problematic, maybe ending it at the end of September does make sense. Commissioner Kjellander then moved for approval of the program as outlined in the Decision Memo, with the Company establishing the subaccounts in its FERC Account 557 and with the requirement that the Company provide a summary program performance report at the completion of the program.

There was no further discussion or comment on the motion. A vote was taken on the motion and it carried unanimously.

Scott Woodbury's May 16, 2001 Decision Memorandum re: Final Petition for Clarification (Final Order No. 28205) Order of Clarification (Order No. 28711)—Petition for Clarification. Case No. UWI-W-99-04 (United Water/Barber Water).

Mr. Woodbury reviewed his Decision Memorandum. There were no questions or comments. Commissioner Kjellander moved that the request for reconsideration be denied. A vote was taken and the motion carried unanimously.

Being no further items on the agenda, the meeting was adjourned.

Dated this _____ day of July, 2001.

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COMMISSION SECRETARY

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