HomeMy WebLinkAbout20010723.min.docMINUTES OF DECISION MEETING
JULY 23, 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 MINUTES from May 18, May 21, May 30, and June 13 Decision Meetings. There was no discussion and the minutes were approved.
The second order of business was approval of items 2—15 on the Consent Agenda. Commissioner Smith said that regarding item 9, she was wondering why the Staff thought it had to be done by modified procedure instead of just granting Verizon the waiver. Mr. Hammond replied that this matter has been an ongoing issue and Staff wanted to comment rather than just let it go by. There were no other questions or comments. A vote was taken and the Consent Agenda was approved.
The next order of business was MATTERS IN PROGRESS:
Don Howell's July 19, 2001 Decision Memorandum re: LLP Power Generation's Petition for Declaratory Order. Case No. GNR-E-01-1.
Mr. Howell reviewed his Decision Memorandum. There were no questions or comments. Commissioner Smith moved that the Commission approve the application with an Order similar to those issued for Idaho Power in its non-utility operations, limiting it to just the facts within the petition. A vote was taken and the motion carried unanimously.
Don Howell's July 20, 2001 Decision Memorandum re: In the Matter of the Tariff Advice Submitted by Qwest Communications to Revise Its Percent Interstate Usage (PIU) Reporting Methodology for Access Services In Its Northern Idaho Service Area. Case No. QWE-T-01-16.
Mr. Howell reviewed his Decision Memorandum. There were no questions or comments. Commissioner Kjellander made a motion to approve Tariff Advice No. 01-03-N premised on the Company's ability to subsequently amend or modify the tariff advice after the receipt of public comments, if any. A vote was taken on the motion and it carried unanimously.
Doug Cooley's July 19, 2001 Decision Memorandum re: New Access Tariff and Local Exchange Tariff Filed by Midvale Telephone Exchange, Inc.
Mr. Cooley reviewed his Decision Memorandum. Commissioner Hansen asked for clarification regarding a possible draw on the USF fund. Mr. Cooley replied that if there are revenue losses with the reduced rate, Staff would not want to see further USF funding to meet the losses. Commissioner Hansen asked if the only other alternative if there were revenue losses would be to raise rates. Mr. Cooley stated there could be the possibility that revenues in general could increase with an attractive vacation service because more people would sign up and more revenue would be generated, or losses could come out of the Company's funds. Commissioner Hansen said he wanted to know what justification there is to give a customer a discount rate if that customer has service with another exchange. Mr. Cooley replied that would be a good question for the company. He said Midvale was responding to customer requests for the vacation service, but as far as justification as to the value of dial tone for one customer versus another, he didn't have a good answer and he noted Staff also shared his concerns. Commissioner Hansen asked if cellular service would count as having service with another company. Mr. Cooley said the wording of Midvale's proposed tariff does not indicate that it has to be a landline and therefore one could clearly assume a cell phone would qualify as full service in another exchange. Commissioner Hansen said he is concerned about the proposed tariff and would have a hard time supporting it because it could have a negative impact on some of the other customers.
Commissioner Smith commented that there seems to be some confusion. She noted that on page two of the memo, it says, "During the vacation period, no incoming or outgoing calls are provided and there is a connection charge ($25) when full service is reestablished." She said she thought she heard Mr. Cooley say something different. Mr. Cooley clarified that Midvale Telephone offers a vacation service right now that does suspend service so that there are no incoming or outgoing calls, but the proposal is to remove that restriction and simplify the disconnect/reconnect administration. Commissioner Smith clarified that the company is trying to save money by not having to turn people on and off of the vacation service. Mr. Cooley replied that seemed to be the thrust of the Company's concern in that they have to send employees to remote exchanges to program or administrate the bookkeeping under the existing structure. Commissioner Smith stated the Commission has allowed vacation rates because in the long run it wants to maximize the Company's revenue—the plant is installed and the lines are there—but customers are only there a few months out of the year. She said when they are there, the intent is to get them to hook up and pay money. She said the Commission has tried to accommodate the needs of the customers by trying to maximize the Company's revenues, but this proposal seemed to be very odd. She asked when the tariff was filed—January 29th or June 23rd. Mr. Cooley said he thought the original tariff was filed in January. She said it was time to get it moving and she didn't think the tariff should be held up just because there are concerns about how the vacation service is structured. Mr. Cooley said customers have not been affected by the lag. Commissioner Smith made a motion to approve the Midvale tariff with the exception of the vacation service. She asked if the Staff and Company could help the Commission understand the proposal better and she suggested that Staff review and compare other vacation service tariffs that are already approved. She said if the Company has reasons why it wants to move to something else, she needs a better understanding and wants to be able to compare the proposal to what is in place to see if it will work. A vote was taken on the motion and it carried unanimously.
John R. Hammond's July 10, 2001 Decision Memorandum re: Idaho Power Company Irrigation Customer Jay Hulet's Complaint Regarding the Company's Irrigation Buyback Program in Case No. IPC-E-01-3.
Mr. Hammond reviewed his Decision Memorandum. Commissioner Kjellander commented that it is now the end of July and by the time the Company responds, the irrigation season will almost be over. He asked what the value would be to go to the Company and wait for a response and whether we already had enough information to make the decision. Mr. Hammond replied that Staff's position had not changed and Staff still didn't think Mr. Hulet was eligible or should be allowed to compete. He said based on the information submitted, Staff did not agree with Mr. Hulet and felt that he shouldn't be allowed to bid the Oreana farm into the program at any date; however, since he had pushed the issue and has not accepted Staff's decision, Staff is left with little recourse other than having the Company respond. Mr. Hammond stated that if the Commission feels the matter is fully submitted at this point and wants to make a decision, Staff would have no opposition to that. Commissioner Kjellander commented that he felt it is a game to put the Company through the process of responding and it didn't make a lot of sense considering the timeline. He stated he was prepared to make a decision if the Commission was inclined to go in that direction.
Commissioner Smith said the important thing is that the customer feels there was an irregularity with regard to the information he was given by the utility. She noted he has the right to ask the Commission to look at it and the Commission has the obligation to do so. She said the Company should be asked to formally respond. She noted there might be customers in the program who haven't even received a check yet, given the way the program was structured, so she didn't think the time issue was critical.
Commissioner Hansen said he agreed with Commissioner Smith since Mr. Hulet had filed a formal complaint. He said the customer is entitled to have a response from Idaho Power and made a motion to support Staff's recommendation.
Commissioner Kjellander asked if the Murphy farm was also behind in its payments. Mr. Hammond said he didn't have anything in writing but a company representative had indicated to him both farms were behind, although he didn't know the amount.
There was no further discussion. A vote was taken on the motion and it carried unanimously.
John R. Hammond's July 19, 2001 Decision Memorandum re: In the Matter of the Applications of Idaho Power Company, Case No. IPC-E-01-18; Avista Corporation dba Avista Utilities, Case No. AVU-E-01-9; and Pacificorp, Case No. PAC-E-01-9 to Discontinue Cost Information Filing and Suspension of the Filing Date Pending Determination.
Mr. Hammond reviewed his Decision Memorandum. Commissioner Hansen commented that the Company was concerned about the confidentiality of the report. He noted that previously, the report was distributed publically, i.e. legislators had copies and he has often quoted from reports. He said in the past, the report wasn't treated confidentially, so he questioned why it needed to be treated confidentially now. Mr. Hammond said Idaho Power felt it would be put at a disadvantage to have its costs released to the public and it wasn't explained to him further. No one was present from Idaho Power to help answer the question. Commissioner Hansen said he personally thought the report is very valuable as it provides a lot of insight into cost differences that exist among the utilities and it helps answer questions people have concerning the cost of electricity. He said he didn't have a problem with the reporting moving to every other year as Staff proposes, and he didn't have a problem with the modifications Staff suggests.
Commissioner Kjellander asked when the filing would begin. Mr. Hammond said the first report would be filed July 1, 2002, and thereafter it would be filed every other year. He said if the Commission decides to require the report to continue to be filed, one of the utilities has asked that filing be required every five years.
Commissioner Smith asked if Commissioner Hansen wanted to wait to make a decision until his question about confidentiality could be answered by the Company. She said she viewed this differently and had some sympathy with the companies having to prepare the reports. She said she wondered what the harm would be in filing the reports whenever the Staff requested them or needed them. She said the important costs to keep track of are generation, distribution, and transmission to see if there are any shifts among those three because she didn't think retail access was coming here soon. She stated there could be a push to move generation to the market and divest of that, and there's definitely a push to move transmission, so those are the categories to keep close track of to see if anything is happening to them that we need to pay attention to. She noted she is neutral on this matter.
Commissioner Hansen stated he thought that if the utility company prepares the report every two to three years, it puts the company in a position where they program their activities so they can collect the information. He said he thought it would be easier for a company if the reporting were on a set schedule. He asked if it could be set up so that the report would be due every other year other unless the Commission determined it could be waived, but as far the company was concerned it would be due unless the Commission acted.
Commissioner Kjellander commented that with all the work the Commission does, it might be easy sometimes not to go looking for more work, so the thought of asking for a report when we need it may fall by the wayside and having a firm date might make more sense. He said he thought filing the report every other year was reasonable. He stated the Commission has been fairly lenient in the past in granting extensions when they have been requested, and if we added the caveat of allowing a waiver if requested, it might satisfy everyone's concerns.
Commissioner Hansen made a motion to approve Staff's recommendation with the reports being subject to the Commission's desires on an every other year basis.
Commissioner Smith stated there was one item in Staff's recommendation that concerned her and that was reporting the unbundled cost information by customer class instead of by voltage level. She said she is opposed to that change. She said the Commission specifically chose voltage level as a more representative way of indicating costs, whereas customer class, i.e. irrigation, has absolutely no relationship to the size of the customer or the cost of the service. She said if the report continues it needs to be done on voltage level, not customer class. Commissioner Smith made a substitute motion including everything Commissioner Hansen said except for Staff's recommendation to report by customer class instead of voltage level.
A vote was taken on the motion and it carried unanimously.
Scott Woodbury's July 11, 2001 Decision Memorandum re: Sale of Water Company. Case No. HVW-W-01-01 (Happy Valley Water).
Mr. Woodbury reviewed his Decision Memorandum. Commissioner Kjellander made a motion to approve cancellation of the existing Certificate of Public Convenience and Necessity No. 364 and issue a new Certificate to a new corporation to be formed by Brett and Nora McCarty. Mr. Woodbury said it is his understanding in speaking with Nora McCarty that a new corporation name has been decided—Happy Valley Water Service, Inc.—and they have applied to the Secretary of State for incorporation in that name. There was no further comment or discussion on the matter. A vote was taken and the motion carried unanimously.
Scott Woodbury's July 12, 2001 Decision Memorandum re: Request for a Deferred Accounting Order—Electric Power Costs. Case No. UWI-W-01-2 (United Water).
Mr. Woodbury reviewed his Decision Memorandum. Commissioner Hansen moved for approval of United Water's request to defer certain electrical power costs beginning May 1, 2001. He added to the motion that the Company be required to maintain detailed records and that the interest on the deferred balance should not be allowed at this time but should be presented to the Commission to decide at a later date during ratemaking treatment. There was no discussion on the motion. A vote was taken and it carried unanimously.
Scott Woodbury's July 11, 2001 Decision Memorandum re: Electric Power Cost Proposal. Case No. CAP-W-01-1 (Capitol Water).
Mr. Woodbury reviewed his Decision Memorandum. Commission Smith moved for approval of the request of the Company as modified by the Staff, taking the energy usage times the surcharge and having that amount be used for the purposes of their calculations. There was no discussion on the motion. A vote was taken and it carried unanimously.
Scott Woodbury's July 11, 2001 Decision Memorandum re: Amendment to Schedule 51—Electric Line Extension Tariff. Case No. AVU-E-01-10 (Avista).
Mr. Woodbury reviewed his Decision Memorandum. Commissioner Smith moved for approval of the proposed revisions to Avista's Electric Line Extension Tariff Schedule 51. There was no discussion on the motion. A vote was taken and it carried unanimously.
Scott Woodbury's July 19, 2001 Decision Memorandum re: Golden Dawn/Barberton Petition for Installation of Individual Meters. Case No. UWI-W-01-1 (United Water).
Mr. Woodbury reviewed his Decision Memorandum. Commissioner Hansen asked if the 50% of the customers who requested meters were willing to pay the $1,000 + for the meters. Mr. Woodbury explained there was a straw poll that was distributed at the workshop. He said most of the customers want metering but they prefer that the costs be spread against the Company's total customer base. He said he couldn't recall an individual customer who wanted to pay the full amount up front. Commissioner Hansen said that out of the 127 people who responded, 46 wanted meters, which is 36%, making it more like a third rather than a half. He asked how the form was worded and if it was clear when they filled out the form how the cost of the meter would be handled—i.e. did they opt for the metering with the understanding it would be free or did they opt for it knowing they would have to pay for it.
Commissioner Smith said she recalled that the form listed options for the customers to choose from. One option was to have a flat surcharge on their bill for a period of time to pay for meters or they could choose to have the company pay it all, which was a popular choice, or they could choose to pay up front. She recalled there was one individual who wanted to pay for the meter up front and be done with it. She said most of the respondents wanted the meters right away and wanted the Company to supply them at no charge.
Commissioner Hansen said he was confused by the Decision Memo where it stated that 64 customers or 50% supported a flat rate, which tells him a lot of people wanted the flat rate. He said he would like to know who wanted the metering. Mr. Woodbury stated the customers could be moved to a flat rate now, which is the non-contiguous rate, but it still provides them no opportunity to reduce that rate by conservation. He said the initial petition that was filed comprised about 50% of the Barberton/Golden Dawn customers. He said only about 80 customers appeared at the workshop and he didn't know if they were they same customers who signed the petition. He said nevertheless, there are quite a few customers that we haven't heard from. He stated the Company and Staff are opposed to selective metering and feel it will be more costly in the long run. He said Staff expressed some concerns about precedent being established and the Company indicated there is only one other Company out there where they could run into the same problems in a potential sale. He said the Company advanced its argument that the Barberton/Golden Dawn customers are not new customers and we should be looking at this as just an improvement or repair to an existing system, which would be one way for the Commission to approach this with an end toward spreading the costs to all customers. Mr. Woodbury stated that Staff also raised the issue of a collateral agreement and perceives the agreement with the underlying contract of purchase that was submitted as being the total agreement of the parties with respect to the subject matter. He stated Staff is concerned the Company was not being totally candid, although admittedly we aren't talking about a lot of money in the book value.
Commissioner Smith said she didn't think the collateral agreement argument helped at all in the metering issue. She said if that is an issue the Staff wants to bring up next time there is a rate case that would be the time to deal with it. She asked if there has been any change in the consumption of the customers to see if it is still exceptionally high or if it has come down any. Mr. Woodbury asked the Company to respond to the question.
Greg Wyatt of United Water stated the Company had completed its most recent billing of the Barberton/Golden Dawn system that included a two-month period ending the first of July. He said that billing for each customer ended up being in the range of $65-$70 per customer. Commissioner Smith asked if that was comparable to what had been seen before. Mr. Wyatt replied it was comparable but the customers have never received a billing for the July-August time period. He said last year when they did that billing there was a problem with the meter so the Company erred to the advantage of the customer and did not bill them for full consumption for that period. He stated there really hasn't been a "deep summer" billing yet. Commissioner Smith asked what the December, January, and February bills were like. Mr. Wyatt said that working from memory, he guessed that the bills were in the range of $25 - $35 for a two-month billing. Commissioner Smith asked Madonna Faunce if she recalled what her bill was during the winter time frame. She replied that she recalled her bill was more in the $40 range in the winter and $76 in the summer.
Commissioner Hansen asked what metered customers pay on average for the same months. Mr. Wyatt replied that he would have to make a guess but it would be in the $60 range for the July-August time frame.
Commissioner Smith stated that the customers need meters and will have to get them. She said what makes the most sense to her is to put them on a flat rate and give the Company a time by which to provide the meters, but not this year in order not to disrupt the Company's planned maintenance already on the books. She said it was also not necessary to be bound by the flat rate that's in the non-contiguous tariff since this is a special circumstance. She said she would throw out some numbers, such as $65, for a bi-monthly flat rate, and the customers could pay that rate until, for example, May 15th of 2003, or whatever date is agreed upon with the Company to have the meter installations completed. She said having the customers pay up front is not an acceptable outcome, but the current master metered system is not acceptable either because there is no conservation incentive, and the only way to fix that is through meters.
Commissioner Hansen asked about the rates now being charged to former Barber Water customers, $68.43 bi-monthly, versus the system average of $56.44 bi-monthly. He asked what is meant by the current flat rate Tariff 1E of $54.29 bi-monthly. Mr. Woodbury replied that it refers to the Company's non-contiguous tariff, which was initially established to be a system average but it hasn't been changed. Commissioner Smith explained that the rate currently being charged is calculated by dividing the master-metered rate by the number of customers. She said that is what is frustrating to the customers—they are paying for their neighbors who let their hoses run all night and there's nothing they can do about it.
Commissioner Kjellander said he wanted to go with a flat rate and had initially thought that $54.29 might be the right amount, but not after hearing that it doesn't recover the real costs. He said he realizes cost is a big issue to the customers, and he has a feeling no one will be happy with $65 bi-monthly. He said he was concerned about how long the customers would have to pay the $65 amount while waiting for meters, and the dollar amount for the flat rate was also a concern.
Commissioner Hansen said he thought it would better to implement the installation of meters at the next rate case, if all the customers are going to pay for it. He asked if it wouldn't be better for the Company at that time to come forward and include the projected amount for the meters. Commissioner Smith said the reason she chose a date certain was to tell customers that nothing can be done for them this summer, and that they're going to have to go through one more summer, but by the summer of 2003 it will be fixed. She said she was trying to balance the need of the Company to keep its already scheduled maintenance and capital expenditures but also have a date certain to give customers. She asked Mr. Wyatt of United Water if he had any thoughts as to how soon the Company could provide meters.
Mr. Wyatt replied that going with the flat rate until the next rate filing makes the most sense and that was their proposal. He said the reason the Company proposed that was to avoid the problem of customers paying for investments they get no benefit from. He stated he agreed with Commissioner Smith that it would be better to be able to tell customers there is a point certain by which they will have meters, which might help to abate some of the calls they receive every time they send out a bill. He said as far as timing to get the meters installed, it's not in the capital budget but a 2002-2003 time frame is certainly achievable, although his preference would be to go with the next rate filing, but that would be up to the Commission's discretion.
Commissioner Smith said if it's left to the next rate filing, the Commission has no control over it and has no idea when it will happen. She said that would be too indefinite and customers need more certainty. Mr. Wyatt said he could not go on the record and give the Commission a date as to when they might file their next rate case.
Commissioner Kjellander said he would like to give the customers that certainty but he would also like to charge them less than $65 in the meantime. Commissioner Hansen pointed out that if it's too low, it will have to be made up somewhere else. Commissioner Smith noted she could have set the date earlier, i.e. May of 2002.
Mr. Wyatt said he couldn't tell the Commission it can't be done by that date. He said there would be the issue of mandated investment without any carrying costs that the Company is still concerned about, if it's that much in advance of the next rate filing. Commissioner Smith asked if it goes into AFUDC and gets interest anyway. Mr. Wyatt replied that once the meters are installed and are in service, they would have to seek a particular order from the Commission to be authorized post-closing AFUDC. He said that was the jist of the comments the Company filed with regard to the fact that if the Commission orders them to install meters prior to the next rate case filing the Company would also seek an interest carrying charge on the investment to make the Company whole.
Commissioner Kjellander said he would lean toward establishing the rate in the $60-$65 range if some assurance could be provided that by next summer's usage period customers will see personal control through metering.
Mr. Wyatt asked if the Commission would be agreeable to allowing the Company an interest carrying charge on the investment until the next rate filing. Commissioner Smith said it sounded reasonable to her and asked Madonna Faunce if it was something the Commission had done before. Ms. Faunce said it all depends. She noted that at the same time the Company is asking for an interest carrying charge on this one particular case the Company is also putting investment in the ground without asking for a carrying charge on that, and they also they have a high rate of depreciation and equipment that is being depreciated. She said the Commission usually says "subject to review" during a rate case to find out if the Company really has that much extra rate base over that period of time. Mr. Wyatt said the investments the Company makes in between rate cases are generally at the Company's discretion and are not typically as the result of a Commission order, whereas this would be an investment mandated as a result of a Commission order, and the Company tended to look at those as two different things.
Commissioner Hansen said he is concerned about charging ahead and agreeing to pay interest. He said by lowering the bi-monthly amount and going to a longer time out, i.e. to 2003 or whatever, he thought all the ratepayers would benefit financially rather than to go in whole hog now, hurry it along, and pay interest. He said if we could pick a flat rate that is more favorable to the customer and ask them to live with it for a couple years before moving to the meters, in the long run, everyone will save some money.
Commissioner Smith asked Mr. Wyatt if individual customers could request meters and pay up front for them. Mr. Wyatt said that was part of the discussion in the different filings the Company made and in communications with Staff on the issue of selective metering. Mr. Wyatt said if we were looking at an undeveloped building lot on the system that is already fronted by a main, and a customer requests service, then the Company would install and provide the service and meter at the Company's cost. He said that because of the proceeding and the fact that the Barberton/Gold Dawn customers are already existing customers receiving service under a billable procedure, the Company has not offered selective metering to them.
Commissioner Kjellander made a motion to hold the matter for further consideration at the next Decision Meeting. A vote was taken on the motion and it carried unanimously.
Commissioner Smith asked Mr. Wyatt to confirm the numbers she had asked for earlier and provide them to Staff.
Being no further items on the agenda, Commissioner Kjellander adjourned the meeting.
Dated this _____ day of September, 2001.
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COMMISSION SECRETARY
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