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Home My WebLink About20020401-min.docMINUTES OF DECISION MEETING APRIL 1, 2002 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 and 2 on the CONSENT AGENDA. Commissioner Kjellander asked if there were any questions or comments from members of the Commission. Being none, items 1 and 2 on the Consent Agenda were approved. Lisa Nordstrom’s March 28, 2002 Decision Memorandum re: In the Matter of the Investigation of Idaho Power Company’s Demand-Side Management Programs and Funding. Case No. IPC-E-01-13 Ms. Nordstrom reviewed the Decision Memorandum. Commissioner Kjellander asked if there was any direct reference to the argument that is going on with regards to the actual formation of the committee with relationship to funding? Ms. Nordstrom’s reply was no. Commissioner Kjellander thought that the Commission had been silent on that issue. So that Order is essence said that Idaho Power would form the committee. Ms. Nordstrom replied that it did. Commissioner Kjellander asked if there were further comments or questions? Commissioner Hansen commented that his biggest concern was reading Idaho Power’s response. He said, either they interpret it entirely different than the Commission, but thought it was explanatory of what should take place. Commissioner Hansen thought that much more should be progressing along these lines than had. Commissioner Smith commented that she shares the views that have been expressed, and is extremely disappointed, although didn’t think it was not yet appropriate to find Idaho Power in contempt but certainly it seems the treatment of this issue is contemptuous. She thought the last time they had a rate case they were doing a DSM program, so probably in the base rates there is some money there, and if Idaho Power can’t get it together we ought to make them go out for bids and get an independent entity to administer the DSM program for the customers of the state of Idaho and fund it through a surcharge on the bills. Commissioner Smith commented that she is open to other suggestions but thought the Commission’s words were plain, and we all expected that they would be a lot further down the road right now than they apparently are, or are interested in being. Commissioner Kjellander added that he recalls the company asked for some kind of clarification when the original Order went out in direct reference to the DSM approach, and at that point it was about what the roll of the advisory committee would be. If there was some concern about funding, perhaps it would have been raised at that point. Commissioner Kjellander thought it was clear when putting this program together that the advisory committee would get together, they would make recommendations, the committee would look at those recommendations and decide which ones they wanted to move forward on, then the additional funding that needed to be secured would be identified and a request brought to the Commission. Commissioner Kjellander felt he was ready to move on with this. Ms. Nordstrom asked if there was any specific action to direct Idaho Power to take. Commissioner Kjellander replied that Idaho Power needed to get a group together and have a meeting. If they have this ready to go except for having the people appointed and put together, then make that happen. He didn’t know when an appropriate date would be, but said the Company has given it some thought, and needs to get off the dime and get rolling. If someone had a specific date that they want to put into place, he was willing to consider that. Ms. Nordstrom replied that they anticipate that a PCA Order will be issued May 9th. That may in fact resolve funding issues. She asked if the Commission wanted to direct them to convene the advisory group before that date or after. Commissioner Kjellander commented that the role of the advisory group is to talk amongst themselves and make recommendations and the company is to act. He knew that the Order did say we wanted them to consider some specific items, how they can consider those prior to the dates that were mentioned without getting together and meeting was beyond him. He asked what that date was. Ms. Nordstrom replied May 9th. Commissioner Kjellander said May 9th is the target date, and by then they will have put this group together and convened and the company will have something to look at to review or reject, whichever is their prerogative. Commissioner Smith replied that if the company has any expectation that a tariff rider, if deemed appropriate by the Commission, would be implemented at the same time as the 2002 PCA, then they really need to get busy because the information needed to appropriately determine it probably isn’t prepared and ready to be proposed. Commissioner Kjellander said he agreed. Asked if that was enough to put together as a motion, if so, he moved that. Asked if there was further discussion, vote taken, all approved. Motion carried. Lisa Nordstrom’s March 29, 2002 Decision Memorandum re: Idaho Power’s Request for Waiver of the Power Cost Adjustment (PCA) Bill Stuffer Requirement. Case No. IPC-E-02-03. Ms. Nordstrom reviewed. Commissioner Kjellander asked if there were any questions or comments from the Commission. Commissioner Smith said we ought to approve the waiver of the bill stuffer requirement in our rule. She said she was quite offended by their first postcard which she thought was an advertisement for their securitization without pointing out other options or alternatives; however, she felt it had backfired on them as the public seems to totally misunderstand the whole thing. She said she did have come concerns about the proposed publications and stations that are in the attachment and felt we only have time to do these three public hearings, but wondered if we should choose not to advertise in Burley or Idaho Falls, or those other communities. She said we try to choose a hub that people could go to if they felt strongly and wanted to give their opinions. She stated that she wondered if we should just advertise only in those communities where the hearings are, or if we should be broader. Commissioner Kjellander commented that we do have the written comment period and to that extent there is more opportunity for people to be informed and they can comment in a written format. He said he would rather see a much broader distribution in some of the communities. But again it depends on what the content is, and he didn’t believe we can actually dictate what the content would be of those ads without infringing on the company’s first amendment right. He said he would encourage them strongly to also include as much as possible the option that people have to submit their written comments to the Commission regardless if they are near a public hearing or not. Commissioner Smith said if it were appropriate, she would move approval of the request of waiver of the bill stuffer requirement. Commissioner Kjellander asked to incorporate staff’s recommendation with regards to how to proceed with the advertising component. Commissioner Smith said yes, but thought we would have plenty of people without the advertising. Commissioner Kjellander said we have a motion before us and asked if there was any further discussion. There was none. Vote taken, motion carried. Scott Woodbury’s March 29, 2002 Decision Memorandum re: Company Proposal to Recover Deferred Power Costs—Intervenor Petition for Clarification. Case No. PAC-E-02-1. Scott reviewed the decision memorandum. Commissioner Kjellander asked if there were any questions or comments from the Commission. Commissioner Hansen commented that after January 1, 2002, PacifiCorp had every right to file for a rate increase, but he felt that PacifiCorp was not asking for a rate increase but asking to be reimbursed for costs of doing business during the time period the moratorium was in place. He said earlier the Commission ruled dismissing a request on this particular item, but at that time the Order also stated that the Commission does not guarantee any future recovery of these deferred amounts. He stated this isn’t a rate increase, and unlike Idaho Power and Avista, they did not have a PCA mechanism in place to recover this type of cost. If PacifiCorp asked for a rate increase or opened a case to justify poor earnings or not fair returns, they would be entitled to the increased rates. But what Pacificorp is asking for is different--it’s a piece meal approach to a rate increase. He stated that under the merger condition no. 2, PacifiCorp is prevented from recovering excess power costs that occurred during the moratorium period. He thought it was a very awkward way for the company to recover their money. He said he didn’t believe going back with this method of trying to assess upon the ratepayers is the right way to do it. He said that on this particular question PacifiCorp, under the merger conditions, would be prevented from requesting recovery of the excess costs. Commissioner Kjellander asked if there were any other comments. Commissioner Smith replied that her recollection of the merger condition No. 2 is exactly what it says. We wanted to promise the people for at least two years their rates would not increase and we were especially trying to protect against increases that were merger related. However, the words were carefully chosen and understood at the time to mean that while rates could not change prior to January 1, 2002, that didn’t mean that a case couldn’t be filed, and she recalled a discussion that they could file a rate case in April or May of 2001 because the rates wouldn’t be effective until January 1, 2002. She said no one expected the wholesale market prices to go beyond the zone that anyone ever imagined and she didn’t think there was any expectation that rate payers would be protected forever from extraordinary expenses of that nature that are not merger related. She stated that part of this was caused because the Hunter unit went down and there may be other reasons to deny recovery of these expenses, i.e. they didn’t book it right, they didn’t book the right amount, Hunter went down because of their own fault and they were imprudent so there could be other reasons to deny recovery of this money, but it is certainly not because of this merger condition. She said it should be clarified to intervenor Timothy Shurtz, that the merger condition did not prohibit the deferred account and we issued an order on that. She said that was the right decision and it doesn’t preclude us from considering whether or not the company should be entitled to recover these expenses. Commissioner Smith moved that we clarify the petition by noting that the consideration of the recovery of these expenses is not precluded by merger condition no. 2. Commissioner Kjellander commented that as painful as that merger was, and as many conditions that the Commission imposed on that specific merger, that condition is one that was met. The company did not seek a rate increase that would be effective prior to January 1, 2002, and the intent of that condition was to ensure that the merger credit coupled with that condition would result in a direct benefit as far as reduced rates to customers during that time frame. A clear reading of that sentence, where it states at a minimum, Scottish Power shall not seek a general rate increase for its Idaho service territory, effective prior to January 1, 2002. After re-reading of that specific condition, he didn’t see any reason why it wasn’t a right decision. Commissioner Hansen replied that this had been a controversial issue for a long time with the Commission. He wanted to make sure that he didn’t have a problem with PacifiCorp coming in for a rate case, and justifying that they need a rate increase. He said they haven’t been in here for 14 or 15 years for a rate increase, they don’t have a PCA mechanism in place, and they picked a time period to come back to recover these costs. He believed that the people that interpreted that Order for those two years felt that not only were the rates to be frozen at that rate, but they never had the idea the company would come back and want to recover 12 months of costs they had during that moratorium. He said he would have to disagree with his colleagues. Commissioner Kjellander asked if there was further discussion, and hearing none, the motion before the Commission was voted on. The Commission voted 2 – 1. Scott Woodbury’s March 29, 2002 Decision Memorandum re: Sale of Water Company. Case No. SWS-W-01-1. (Stoneridge Water) Scott reviewed. Commissioner Kjellander asked if there were any comments for discussion from the Commission. Being none, Commissioner Kjellander moved for approval of staff conditions. No additional comment or discussion. The vote was taken, and the motion carried unanimously. Decision meeting adjourned. DATED this _______ day of April 2002 ___________________________________ ASSISTANT COMMISSION SECRETARY 5