20010627.min.doc

MINUTES OF DECISION MEETING
JUNE 27, 2001 - 1:30 PM

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

Commissioner Kjellander called the meeting to order. The first item on the agenda was approval of the CONSENT AGENDA. Commissioner Kjellander stated that item #9 needed to be moved to the Consent Agenda. There were no objections. Commissioner Kjellander asked if there were any questions or comments from the Commission on items 1—6 and item 9 on the Consent Agenda. Regarding item 6, Commissioner Smith asked how long a suspension period the Staff was proposing. Birdelle Brown replied that Staff didn't make a recommendation because it wasn't sure how deeply it would have to delve into the matter. Ms. Brown said they talked about doing discovery and requesting comments from the industry in general, which would require a 14-21 day waiting period, so she estimated it could be done in 30-40 days. Commissioner Smith said she was wondering if they wanted to do it the standard 30 days plus five months or do something different. Ms. Brown said in the past when she has run into this situation, the Commission has set a suspension period of 30 days plus five months and then if they were able to process it sooner, they did. Commissioner Smith said she had no objection to that and was just asking for clarification. There were no further comments and the Consent Agenda was approved.

The next order of business was MATTERS IN PROGRESS:

Lisa Nordstrom's June 13, 2001 Decision Memorandum re: In the Matter of the Application of Z-Tel Communications, Inc. for a Certificate of Public Convenience and Necessity to Provide Local Exchange Telecommunications Services. Case No. GNR-T-00-39.

Ms. Nordstrom reviewed her Decision Memorandum. There were no questions or comments. Commissioner Smith moved that the Commission grant the Certificate and deny Z-Tel's request for waivers. A vote was taken and the motion carried unanimously.

Terri Carlock's June 25, 2001 Decision Memorandum re: Authority to Guarantee RTFC Loan of $30,000,000 to Syringa Networks, LLC by Various Telephone Companies. Case No. GNR-T-01-9.

Ms. Carlock reviewed her Decision Memorandum. Commissioner Kjellander asked about additional filing requirements and if they were in direct reference to the USF. Ms. Carlock replied that filing requirements were in reference to supporting the draw amounts, updating project details, financial covenant filing requirements with RTF and the lease agreement between Syringa and the applicants.

Commissioner Hansen said he is concerned about the potential impact of the guarantees on the ratepayers of these companies. He said he knows the Staff proposes adding a paragraph that would make the guarantee the responsibility of the shareholders, but a lot of the companies have very few shareholders and are just a family organization. He asked if they have the resources to back this up if something goes wrong. He said it's fine to make the shareholders responsible but if they don't have the resources and can't back it up, then the guarantee will fall on the ratepayers. Ms. Carlock said she did an analysis of the eight companies to see where their financial capital structure is currently and where it would be if they had to guarantee the loans, and she found there would be sufficient common equity to cover it. She said the companies also have some other operations from within that the companies could draw from.

Commissioner Smith said she would like to note that she doesn't think it is necessary or appropriate to make any remarks about burden of proof in a future proceeding.

Commissioner Kjellander made a motion that the applicants be granted authority to guarantee the $30,000,000 loan of Syringa with RTFC in the amount of $18,000,000, including a paragraph in the order stating that any loan payments made under the guarantee will be the responsibility of the shareholders and will not be included in any rate proceedings for Idaho ratepayers and that filing requirements be imposed.

Commissioner Hansen asked about Exhibit A, stating there is just a note by Fremont Telephone Company stating "no guarantee - it will be picked up elsewhere." Ms. Carlock replied that in her memo she indicated that in further contact with the parties, information was provided that Fremont's guarantee was not going through at this point, so rather than including Fremont for the guarantee, it would probably be picked up by cooperatives. She stated they weren't sure at this point but it would not be increasing the other parties' guarantees. She stated that Fremont is still putting in the capital contribution.

Commissioner Kjellander asked Ms. Carlock if she knew when the USF issue would be presented to the Commission for review. She replied it will be up to the companies and at this point she doesn't know what their plans are.

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

There were no further items on the agenda and Commissioner Kjellander adjourned the meeting.

Dated this _____ day of September, 2001.

______________________________
COMMISSION SECRETARY

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