20011119.min.doc

MINUTES OF DECISION MEETING
NOVEMBER 19, 2001 - 1:30 P.M.

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 1-14 on the CONSENT AGENDA. Commissioner Kjellander noted that item 13 on the agenda had been withdrawn by the company and would be considered at a later time. He asked if there were any questions or comments on any of the other agenda items.

Commissioner Smith said she had a question on item 4 concerning changing the calculation of the deposit interest percentage. She noted that we sometimes use the percentage rate on deferred accounts or in other ways and asked Terri Carlock if the percentages automatically change in those instances, also. Ms. Carlock replied that they should change and track through, although there have been times when we have had to give reminders to make the change.

There was no more discussion, and with the exclusion of item 13, the Consent Agenda was approved.

The next order of business was MATTERS IN PROGRESS:

Scott Woodbury's November 16, 2001 Decision Memorandum re: Commission Order No. 28845—Company Failure to Comply. Case No. GNR-W-01-01 (Ponderosa Terrace Estates).

Mr. Woodbury reviewed his Decision Memorandum. Commissioner Smith asked if Staff knew what rates were charged before the company instituted the new rates of $60.00/$30.00 per month. Bob Smith replied that the monthly rate had been approximately $18.50. Commissioner Smith asked Mr. Smith if he had met with Robaer Cobott, the owner of the system. Mr. Smith replied that he had met with him once in August. She asked if he thought Mr. Cobott's failure to comply was simply the (sometimes) inexpertise of small water company owners or just a defiant, "you can't make me" attitude. Mr. Smith replied that he thought it was more defiance. Commissioner Smith asked if Mr. Cobott has a lawyer. Mr. Woodbury said he didn't know. Commissioner Smith said that if we're going to issue an Order to Show Cause, there would need to be a hearing up north. Mr. Woodbury said he recommended having the hearing in Boise.

Commissioner Kjellander said he thought it would be unwise to have the hearing in Boise since we have received numerous letters and complaints from some of the people on this water system, and he thought they should be given every opportunity to publically state their concerns about rate increases and refunds.

Commissioner Smith asked about enforcing our orders and noted that she thought we would have to go to district court. Mr. Woodbury replied that we would have to go to district court but it would make a better case for district court if we provided the opportunity for the company to appear before the Commission. Commissioner Smith agreed and confirmed we are anticipating a Commission hearing near the community of Sagle followed up by a district court proceeding if necessary.

Commissioner Kjellander asked if the owner is aware of the ramifications. Mr. Woodbury replied that he planned to include specific language with respect to the Commission's enforcement powers in the next order. Commissioner Kjellander stated that the language should be explicit and clear about our authority.

Commissioner Smith said she understood that the calculation of $19.43 is the correct mathematical average but she thought it would make more sense to charge $20. Mr. Woodbury replied that Staff had no problem with that.

Commissioner Smith made a motion to reduce the monthly flat-rate water charge for Ponderosa's residential customers to $20 per month for those who are receiving service, with the assumption there is no charge for people not receiving service, and that we require the company to comply with the requirements of our previous order within ten days and provide the information requested in the September 27th Production Request.

Commissioner Kjellander asked how the Commission has been notifying the customers of what is occurring. Mr. Woodbury said that the customers had been provided individual copies of the previous order pursuant to a customer list we have. Commissioner Kjellander noted we will do the same with the notice that will be going out in this instance.

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

Don Howell's November 16, 2001 Decision Memorandum re: Idaho Power's Request for an Accounting Order to Defer Extraordinary Costs Associated with Increased Security Since September 11, 2001. Case No. IPC-E-01-41.

Mr. Howell reviewed his Decision Memorandum. He stated there is a correction to the memo where it states "Staff recommends approval of the accounting Order…." He said what Staff really recommends is approval of processing the Application under Modified Procedure.

Commissioner Hansen said he didn't have a problem processing it under Modified Procedure but he would like the Company to provide details of the expenditures confidentially to the Commission because he would like to know what security measures are being taken and the estimated costs before approving them. He said as a Commission, we need to know what the Company is doing.

Commissioner Smith said she agreed with Commissioner Hansen. She stated we have had reviews from other regulated utilities about the security measures they have taken, and it would be wise to hear from Idaho Power, also. She noted that she understands this is only a deferred account, which means it won't be placed into rates until there is a rate case and it is proven the security costs are prudent and reasonable. She said for her, the burden of proof will be pretty high when and if the Company asks for recovery. She said she understands the need for the Company to come in advance and preserve the costs through an accounting mechanism, however, knowing we have in the past denied recovery of costs of utilities because they have failed to establish the accounting mechanism.

Commissioner Kjellander made a motion to process the Application under modified procedure. A vote was taken and the motion carried unanimously.

The only other item on the agenda was under FULLY SUBMITTED MATTERS and Commissioner Kjellander stated it would be deliberated privately. He then adjourned the meeting.

DATED this _____ day of November, 2001.

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COMMISSION SECRETARY