20020311-min.doc

MINUTES OF DECISION MEETING
MARCH 11, 2002 – 1:30 PM

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 MINUTES FROM PREVIOUS MEETINGS. Commissioner Kjellander made a motion to approve the minutes and it passed unanimously.

The next order of business was approval of items 2—5 on the CONSENT AGENDA. Commissioner Hansen commented that on item 3, it seemed to him that the filing was attempting to put the burden on the Commission to identify issues and resolve problems that should be the company’s responsibility. He said he is concerned that for years the company operated as a six-state jurisdiction, and Scottish Power knew that when it acquired the company, and now all of a sudden it is some huge problem and it can’t operate as a six-state organized utility. He said he wonders why we are moving as a Commission in an area where the company should come forth with the solutions to the problems. He said he is concerned that it has become the problem of six state commissions rather the company’s problem.

Commissioner Smith commented that she thought the reason for the investigation is the fact that the Oregon Legislature passed a statute requiring direct assignment of Pacificorp’s facilities, which caused some difficulty not only for Oregon but for all the other states that regulate Pacificorp. She said the states attempted to have an informal process where they consulted and tried to work out an agreement that all could feel comfortable with on the allocation of resources, but it didn’t work in an informal manner and so staff had recommended a formal proceeding. She stated the Commission suggested to Pacificorp that it should make the filing or something similar so we could go down the formal path as opposed to the informal path.

Randy Lobb noted that interstate jurisdictional allocations have been an issue for a long time and with the merger were somewhat exacerbated. He said the restructuring bill in Oregon has caused additional problems with respect to allocating system costs among the various states. He stated the company has already filed a formal case with the Commission—the SRP—which is a plan that splits out the generation, the transmission, and the distribution companies for each state. He said it is a proposal that appears to be unworkable. He said he didn’t believe the states are willing to go that far to make such drastic changes, so the states are looking for alternatives and the company is also interested in any alternative to the SRP that might be acceptable to the various states. He added that this is an attempt to get all the states together and come up with some workable alternative to the company’s SRP proposal that would allow them to perhaps wall off Oregon and allocate costs in a reasonable manner that would be acceptable to all the jurisdictions. He said the Commission intends to participate in the multi-state process to see if agreement can be reached, and then bring it back to the Commission for its approval. Mr. Lobb said Staff isn’t sure if it’s possible to reach agreement and there are questions about the time frame, but one of the things it wants to do is get the Commission’s decision about Staff’s participation in the multi-state process, and then play it by ear from that point.

Commissioner Hansen asked Mr. Lobb if he thought the workshops would be productive for Staff and if there was a possibility of bringing the states together. Mr. Lobb replied that he thought there was a chance, although the issues have been kicked around for years without resolution so he couldn’t say if the issues would be fully resolved, but certainly Staff wants to participate in the process.

Commissioner Kjellander commented that he attended one publicly-noticed meeting with the company and some of the other interveners, and at that point it sounded like the company was trying to fish for ways to move forward with the statute in Oregon, which is driving the whole scenario when there are six very different perspectives. He said one of the ideas that was rejected was to try to hold joint hearings with all commissions in the six states, which was completely unworkable. He said what was decided was to work with other jurisdictions in a collaborative fashion, not unlike the ROC process for 271 approval, in order to ferret through the issues, but with the idea that it’s all going to come back to the individual commissions to review and to decide on whatever position they want to take on it. He said he shared some of the concerns Commissioner Hansen expressed with regard to the Commission doing all the work for the utility, but we also have to recognize that if we’re not at the table, the customers of the Idaho jurisdiction of Pacificorp could stand to lose substantially in the process. He stated he had at least modest support for the idea and would like to see the Commission at least participating and seeing where it goes, knowing it could end up going no where, but recognizing that up front.

There was no further discussion and Commissioner Smith moved for approval of the Consent Agenda. A vote was taken on the motion and it passed.

The next order of business was MATTERS IN PROGRESS:

Doug Cooley’s March 7, 2002 Decision Memorandum re: Telecommunication Relay Services 2001 Annual Report.

Mr. Cooley reviewed his Decision Memorandum. Commissioner Smith stated that she fully agreed with keeping at least a quarter reserve based on the vagaries of collections, assessments, and expenses. She said it concerns her, however, to have a large sum of money just sitting in a bank account. She asked Mr. Dunbar to investigate ways to invest the money where it might earn more interest than the less than 1% it is probably earning now, thereby maximizing return on the money to the ratepayers. She noted that it could be invested on a short-term basis so there would always be access to the funds if they are needed. Mr. Dunbar said he would do so and report his findings to Doug Cooley. Commissioner Smith then moved for approval of Staff’s recommendation that the 2002 TRS contribution remain at $.04 per line per month and $.0007 per intrastate toll minute in accordance with Order No. 28684. A vote was taken and the motion carried unanimously.

Scott Woodbury’s March 7, 2002 Decision Memorandum re: Nu-West Industries—Electric Service Agreement. Case No. PAC-E-01-17.

Mr. Woodbury reviewed his Decision Memorandum. Commissioner Kjellander confirmed that the Commission will maintain its jurisdiction to continue reviewing the contract. Mr. Woodbury explained there is a qualification with respect to the cost of service study that the company submitted and whether or not the Commission wanted to limit its approval to the contract, reserving any decision regarding cost of service to another docket.

Commissioner Smith moved for approval of the contract with the qualification there are no assumptions or predeterminations made on the cost of service analysis going forward for this company as the Commission proceeds with the other cases that are also looking at cost of service issues. A vote was taken on the motion and it carried unanimously.

The next order of business was FULLY SUBMITTED MATTERS. Commissioner Kjellander noted that typically items under Fully Submitted Matters are deliberated in private but since all the parties were present and a Decision Memorandum had been prepared, the Commission would consider it publically.

Intermountain Gas’s Petition for an Exemption from the Commission’s Gas Service Rule 102. Case No. INT-G-02-1.

Mr. Howell reviewed his Decision Memorandum. Commissioner Hansen asked if the Commission adopts the proposal, and an inspection is made in error and a problem results, who is liable and responsible. Mr. Howell said the liability would depend on the circumstances of the particular inspection and the facts of the incident that occurred at the time. He stated that the company intended to eliminate the redundant inspections—the city inspection and their own inspection. He said what the Staff did was rely on the 1992 order that recognizes that ultimately the company is responsible for insuring the inspection. He said that beyond that, it would be difficult and it would depend on the facts of the matter whether there was an inadequate or adequate inspection. He said the intent is to make sure that all installations are done to meet code and that the inspections ensure the installations are up to code. Commissioner Hansen asked if this would be similar to what the Commission has in place for Avista. Mr. Howell replied it would be identical to what is in place for Avista with the exception that Avista doesn’t have the continuing review program over the governmental agencies.

Regarding the periodic review proposed by the company, Commissioner Kjellander asked if it satisfied Staff’s concern about the company’s responsibility for the quality of inspections. Mr. Howell replied that as proposed by the company and agreed to by Staff, it would meet many of our concerns about “over the shoulder” kinds of inspections. Commissioner Kjellander asked if it was something Staff could live with. Mr. Howell replied that Staff supported the proposal. Commissioner Kjellander confirmed that in no way, shape or form would any of these things go uninspected—i.e. it’s either going to be the company doing the inspections, a contracted inspector for the company, or the city in the jurisdiction doing the inspections. Mr. Howell replied that was correct, and if an agency is authorized to conduct inspections and adopts the appropriate codes, then instead of the redundancy of two inspections, there would be one to ensure compliance with the installation codes.

There was no further discussion. Commissioner Kjellander made a motion to move for a waiver of Gas Rule 102 and to adopt the parties’ proposal regarding Intermountain Gas’ periodic review of the inspections for conformance to Uniform Mechanical Code and the National Fuel Gas Code. A vote was taken on the motion and it carried unanimously.

Commissioner Kjellander noted that the only other item on the agenda was #9 under FULLY SUBMITTED MATTERS and the Commission would deliberate on it privately. He then adjourned the meeting.

DATED this ______ day of March, 2002.

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COMMISSION SECRETARY

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