20020114.min.doc

MINUTES OF DECISION MEETING
JANUARY 14, 2002 – 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 1-5 on the CONSENT AGENDA. Commissioner Smith asked about item 2. She said if she understands correctly, Staff has done an audit and has given a draft of the audit to the company. She said she doesn’t know what’s in the audit and doesn’t know what the company is going to respond with, so why would we start modified procedure until we know what numbers we are asking people to comment about, assuming Staff in the course of the audit made adjustments and assuming the company will either accept the adjustments or defend its original position. She said she didn’t understand why we would do modified procedure until the company has responded to the audit. Mr. Stutzman replied that we are faced with the situation where the company would like the process to move along quickly so Staff decided to suggest the reply comment period so the company can respond to Staff’s comments and audit and request a hearing if it determines an agreement can’t be reached with Staff. Terri Carlock stated that when she spoke with the company regarding the draft audit she told them what the issues and adjustments were in broad scope and they felt they could handle that in written form rather than needing a hearing. Commissioner Smith said her point is that when we issue a Notice of Modified Procedure we are asking people to comment on something—i.e. a set of numbers or an idea—but here we don’t know what it is Staff has proposed or what the company is going to address. Mr. Stutzman said we would include in the notice at least the figure that is derived from the Application and some information from the Staff audit, and that is the $81,000 per year figure. Commissioner Smith asked if Staff and the company have arrived at the same number. Mr. Stutzman replied that Staff is at $57,000 per year. Commissioner Smith stated that since there are figures being proposed and they are in dispute, then it would make sense to include that in the notice.

Commissioner Hansen commented on item 1, stating it was one of the 46 conditions in approving the merger between Scottish Power and Pacificorp. He said at that time, it was the company’s proposal assuring the customers they were a better company and would provide better service. He said the proposal came from them, not us, and a lot of people at the time questioned whether the company would live up to those 46 conditions or if they were just a worthless piece of paper. He stated at that time the Commission assured the customers the company would live up to the 46 conditions, and based on that, he stood by what was agreed to and he thought the company should live up to them, so he wasn’t in favor of the petition of Pacificorp to modify the merger agreement.

There were no further questions or comments and Commissioner Smith moved for approval of items 1-5. Commissioner Hansen said he would go on record as supporting items 2-5; however, he was opposed to item 1. He said if all of them were grouped together he would vote “no,” but he would like it on record that it is only the first item he opposes.

Commissioner Kjellander made a substitute motion to approve items 2-5 and the motion carried unanimously. He then made a motion to approve item 1 and the motion carried on a two to one vote with Commissioner Hansen voting against approval.

The next order of business was MATTERS IN PROGRESS:

Scott Woodbury’s January 4, 2002 Decision Memorandum re: Power Purchase Agreement—Garnet Energy LLC/Idaho Power Proposed Accounting. Case No. IPC-E-01-42.

Mr. Woodbury reviewed his Decision Memorandum. Commissioner Hansen commented that what Idaho Power is asking for is probably a little premature. He said the company asserts that it needs power for four months beginning in 2004 based on their IRP filed in 2000. He stated that since this need for power was identified several things have changed, which makes it more vital that we carefully reassess the course the company has chosen. He noted the company has already built a 90 MW combustion turbine at Mountain Home and the company’s largest customer, FMC Astaris, has gone out of business and removed 120 MW of load. He said he is not saying the company does not need this additional power, but it needs to go back and reassess the numbers and make the information available to the Commission showing the need exists starting in 2004, just as it did in 2000 when the IRP was filed. He stated that the Commission needs information from the company that the Garnet contract is the most cost effective alternative. He questioned what the other alternatives were and noted that before the Commission approves this it needs details. He said he gets questions from people wanting to know if building additional generation under a regulated company would be less expensive and more productive, or if going out on the market on long-term contracts is the solution, but he can’t answer the questions without getting the kind of information from the company that he just mentioned. He stated he didn’t think it would be proper to process the application under modified procedure and a hearing is necessary or a pre-hearing conference to discuss these issues.

Commissioner Kjellander commented that the easiest way to start getting at some of the questions would be to go ahead and open up a case with a full hearing process. He noted there has been a lot of interest in this specific plant, especially regarding some of the siting issues in the Middleton area, and he wanted to make it clear that this is not the forum for siting issues and the PUC has no jurisdiction over siting. He made a motion to move forward with the case, going with Staff’s recommendations to establish an intervention deadline and pre-hearing conference to deal with the multitude of questions that will no doubt be brought up as we move forward. A vote was taken on the motion and it carried unanimously.

Scott Woodbury’s January 9, 2002 Decision Memorandum re: Sale of Water Company. Case No. EMR-W-00-01 (East Moreland Water).

Mr. Woodbury reviewed his Decision Memorandum. There were no questions or comments. Commissioner Smith moved for approval of Staff’s recommendations. A vote was taken and the motion carried unanimously.

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

DATED this _____ day of January, 2002.

________________________________________
COMMISSION SECRETARY