20020627-min.doc

MINUTES OF DECISION MEETING
JUNE 27, 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 1-3 on the CONSENT AGENDA. There were no comments or questions. Commissioner Kjellander moved for approval of the Consent Agenda items 1-3. A vote was taken and the motion carried.

The next order of business was MATTERS IN PROGRESS:

Beverly Barker’s June 24, 2002 Decision Memorandum re: Formal Complaint Filed by Paul Crisman.

Daniel Klein reviewed the Decision Memo. Commissioner Kjellander asked if service is currently working at the residence. Mr. Klein replied that the customer does have service. Commissioner Smith moved to adopt Staff’s recommendation to have Intermountain Gas issue a credit adjustment of $156.04 and not process the matter as a formal complaint. Commissioner Smith said that what Mr. Crisman is asking for is damages, and the Commission does not have the authority to award damages. She said the credit adjustment on his bill ought to be adequate to compensate him, and the Commission does not have authority to give him anything else.

Commissioner Hansen said he agreed with Commissioner Smith. He commented that it is very important to the public that utility companies follow the correct rules and procedures when they disconnect someone, and when a mistake is made, it can cause some real problems. He said he hoped in the future the company will work harder to follow those procedures.

Commissioner Kjellander inquired about the Commission’s e-mail problem with the complaint system. He said that in the event we have e-mail problems in the future and complaints must be faxed rather than e-mailed, it should be incumbent upon the Commission Staff to also make a follow-up phone call to the company to make sure the fax was received and to advise that the fax is in lieu of an e-mail.

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

John Hammond’s June 20, 2002 Decision Memorandum re: In the Matter of the Application of BasicPhone, Inc. for a Certificate of Public Convenience and Necessity to Provide Local Exchange Services in Idaho. Case No. GNR-T-02-8.

Mr. Hammond reviewed his Decision Memo. Commissioner Smith asked him if there were any matters in dispute or anything out of the ordinary in the application. Mr. Hammond replied that there was not and Staff was simply recommending approval. Commissioner Smith made a motion for approval of the item.

Commissioner Kjellander stated that in this matter, we are not requiring the company to post a bond, but in item 7, we are requiring a bond. He said he thought that in the past we typically require pre-pay companies, as a matter of routine, to establish a bond because there is always the possibility the company could take the money and bolt, so the customers who have already paid don’t get service. Mr. Hammond replied that because the company is in good standing and because it does not require deposits, Staff recommended that no bond be posted in this case. Commissioner Kjellander said the bonding issue gives him some concern. He asked if the company is currently operating in Idaho. Mr. Hammond replied they are not, because they don’t have a certificate. Commissioner Kjellander asked if any of the pre-pay companies we have approved in the past have been allowed to go forward without a bond. Neither Mr. Hammond nor Staff could recall any.

A vote was taken on the motion. Commissioner Smith voted for approval of the motion and Commissioners Kjellander and Hansen opposed it.

Commissioner Kjellander suggested another motion to approve the application with a bond and to allow the company the option of making a request to the Commission in two years to eliminate the bond. He said he thought that would be more consistent with what we have done in the past and would be a possible protection for customers. A vote was taken on the motion. Commissioners Kjellander and Hansen voted in the affirmative to support the motion, and Commissioner Smith opposed it.

Mr. Hammond asked what the amount of the bond should be. Commissioner Kjellander asked him to look at what we have required of similar companies in similar situations.

John Hammond’s June 20, 2002 Decision Memorandum re: In the Matter of the Application of TeleCents Communications, Inc. for a Certificate of Public Convenience and Necessity to Provide Local Exchange Services in Idaho. Case No. GNR-T-01-14.

Mr. Hammond reviewed his Decision Memorandum. There was no discussion. Commissioner Hansen moved for approval of Staff’s recommendation with the option of eliminating the bond requirement in two years. A vote was taken on the motion and it carried unanimously.

Scott Woodbury’s June 20, 2002 Decision Memorandum re: Adjustable Portion of Avoided Cost Rate Revised and Updated Calculation. Case No. AVU-E-02-4/IPC-E-02-6/UPL-E-02-1.

Commissioner Kjellander stated that he would like to move Item 7 to the Fully Submitted category with the intent that the Commission will deliberate on Item 7 and Item 10 privately. There were no objections.

Wayne Hart’s June 21, 2002 Decision Memorandum re: Formal Complaint of Boise County Board of Commissioners Against Citizens Communications (Frontier).

Mr. Hart reviewed his Decision Memo. Commissioner Hansen commented that the County initially questioned the billings in 1996, 1997, 1998 and 1999. He asked when the three-year limitation on recovery legally starts—i.e. when the billings are first questioned or when the complaint is filed with the Commission. Mr. Stutzman said he didn’t know the answer off hand but would do some research and get back to him.

There were no additional questions or comments. Commissioner Kjellander moved that the Commission formally consider the complaint. Commissioner Smith confirmed that will mean sending a Summons to get a response from the Company and to get actual information from the parties since there are disputed issues of facts. With that clarification to the motion, a vote was taken and it carried unanimously.

Commissioner Kjellander stated that under FULLY SUBMITTED MATTERS, items 7 and 10 would be deliberated privately; however, the Commission chose to deliberate item 9 publically.

Lisa Nordstrom – Discussion re: In the Matter of the Application of Intermountain Gas Company for Authority to Decrease Its Rates for Service. Case No. INT-G-02-3. (No memo.)

Ms. Nordstrom stated that Intermountain Gas had filed an Application last month requesting a .$.35 per therm WACOG which would decrease its revenues annually by $52.5 million and decrease average customer rates by about 24%. She stated that although Staff agreed with the Company’s proposed permanent adjustments and temporary and permanent surcharges and credits, Staff’s comments stated the Company’s data indicates the WACOG should be set at $.32 per therm rather than the $.35 per therm the Company requested to offset a likely rate increase next year. She said if the Commission were to implement a $.32 WACOG as recommended by Staff, rates would decrease on average by an additional 4.7% for a total of 28.7%. She stated the Commission had received 10 public comments thus far: two in favor of over-collecting the $8.2 million difference in WACOGs to offset a rate increase next year and eight in favor of passing through the full 28% rate decrease now. She asked which WACOG the Commission wished to authorize for Intermountain Gas Company’s 2003-2004 Purchase Gas Adjustment.

Commissioner Smith said it is very clear to her that in order to be consistent in how we are treating these supply costs, both gas and power, the Commission should go for the $.32 WACOG. She said that is what customers are entitled to and these same customers are also the electric customers who are being asked to pay the full load in one year, so they should get the full benefit of the gas reduction in one year. She said we will look at next year when it comes.

Commissioner Hansen added that he has a hard time accepting the proposed hold back of $8.2 million. He said last year there were two huge increases that had an overwhelming impact on the ratepayers. He stated customers should only pay the rates that reflect the actual costs of the gas, and that all savings be directly passed on to them when they occur. He said he definitely supports the Staff in bringing that reduction closer to 28.7%.

Commissioner Kjellander said he recalled that when the Commission conducted the public hearings on the past rate increases for Intermountain Gas and Avista, the Commission assured the customers that when the wholesale natural gas prices dropped, all the reduced costs would be reflected in the rates. He said for the Commission to do otherwise by over collecting from ratepayers to create a rate stabilization fund, however well intended, would in essence breach the Commission’s commitment to ratepayers. He said the concept of creating a rate stabilization fund by over collecting in the short window of time we have for the PGA tracker seems somewhat unwise given the fact that it is departure from the way we have done our PGAs in the past. He said that a positive benefit of the rate stabilization fund proposal, however, is that it will give ratepayers a wake-up call that just because rates have returned to near-normal levels, the Company and industry are still concerned rates could go back up and perhaps customers might want to plan for the possibility that next year’s PGA may result in an increase.

Commissioner Kjellander made a motion to pass on the full amount of the PGA based on Staff’s recommendation. A vote was taken on the motion and it carried unanimously.

Being no further items on the Agenda, Commissioner Kjellander adjourned the meeting.

DATED this _______ day of June, 2002.

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COMMISSION SECRETARY

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