20021028_307.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
BILL EASTLAKE
LOU ANN WESTERFIELD
RANDY LOBB
DON HOWELL
NANCY HARMAN
BEV BARKER
TONY A CLARK
GENE FADNESS
WORKING FILE
FROM:LISA NORDSTROM
DATE:OCTOBER 25, 2002
RE:IN THE MATTER OF A TWO-YEAR PILOT WINTER PROTECTION
PROGRAM THAT ESTABLISHES MINIMUM MONTHLY PAYMENTS
DURING THE WINTER MORATORIUM, CASE NO. GNR-02-
On October 2002, the Commission received a joint Application from Avista
Intermountain Gas and PacifiCorp (Applicants) seeking authorization to implement a two-year
pilot Winter Protection Program that establishes minimum monthly payments during the period
of the winter moratorium. Since February 2002, the regulated utilities, Commission Staff
Department of Health and Welfare, and Community Action Agencies have sought to address
payment arrangement issues that culminated in this joint Application. Given their desire to
implement the pilot program prior to this winter s heating season, the Applicants request this
Application be processed under Modified Procedure and be effective December 1 , 2002 through
November 30, 2004.
THE JOINT APPLICATION
Purpose.The Application stated "the purpose of this filing was to minimize the
impact winter bills have on customers least able to pay the accumulated winter use at the end of
the winter moratorium." Application at 2. Under Utility Customer Relations Rule 306 (i., the
DECISION MEMORANDUM
winter moratorium rule), the utility service of certain customers cannot be terminated from
December 1 through February 28 if they fail to make payment for energy service. IDAP
31.21.01.306. However, these customers must pay what are frequently large bills March 1 or
face disconnection of service when the prohibition on disconnection is lifted on that date.
According to the Application, this pilot program would allow customers, agencies and
companies to provide assistance for customers to maintain uninterrupted service. The pilot
program would also aid in establishing a pattern of consistent monthly customer payments
allowing participating customers to avoid disconnection and having to pay the balance owing in
full in order to reconnect.
Proeram Elieibilitv and Requirements.The Applicants propose allowing low-
income customers to establish minimal monthly payments, equal to one-half (112) the Level
Payment Plan amount as described and calculated in Utility Customer Relations Rule 313.06.
Opportunity to participate in the Winter Protection Program would be available to any residential
customer who declares that he or she is unable to pay for service and applies for and meets
eligibility requirements for receiving energy assistance benefits under the Low-Income Heating
Energy Assistance Program (LIHEAP). Except as provided elsewhere in the Customer Relations
Rules, no gas or electric utility may terminate service during the months of December through
February to any customer who participates in the Winter Protection Program. However
termination of service may occur if customers do not participate in the Winter Protection
Program with the exception customers who qualify for a postponement under Rule 308 with a
serious illness or medical emergency. IDAPA 31.21.01.308. Customers who participate in the
Winter Protection Program may avoid termination of service by making up a missed monthly
payment. Customers must be current on prior winter payments to be eligible to participate in the
Winter Protection Pilot in the following year. The customer may use any source of funds/grants
to satisfy the payment requirements of the Winter Protection Program and are encouraged or
required to apply for energy assistance programs like LIHEAP and Project Share.
How it Works.For example, a current customer on the Level Payment Plan may
incur winter monthly bills of $150 per month from December through February and have an
existing balance of $100. Rule 306.01 currently allows any customer who is infirm or has
children or senior citizens living in the household to make no payment until March 1. At that
time the customer would need to pay their total "moratorium bill" of $550. Under the Winter
DECISION MEMORANDUM
Protection Program, this customer s monthly payments for December, January and February
(including a balance of $100) would be $90 per month. The balance owing on March 1 would be
$280.
Authorization Soueht.To facilitate implementation of the pilot program, the
Applicants request that:
1) Applicants be exempted from the provisions of Rule 306.01-06 during the
two-year pilot program;
2) Winter Protection Program eligibility be defined as "any residential
customer who declares that he or she is unable to pay for utility service
during the specific months of December, January and February and whose
household qualifies for energy assistance (LIHEAP) from a local
Community Action Agency; and
3) The three-month winter moratorium from December 1 through February
28 be replaced with a minimal monthly payment plan equal to one-half
(112) of the Level Pay Plan amount. The Level Payment Plan amount will
be calculated according to Utility Customer Relations Rule 313.06.
STAFF RECOMMENDATION
Staff recommends that the Commission accept the Applicants' request to use
Modified Procedure.Although Staff anticipated the Application would include supporting
customer data from past moratoriums, no such documentation was provided. Staff requests the
opportunity to conduct discovery in order to seek this data and clarify some items in the
Application that were vaguely worded or appear to differ from Staffs understanding of what was
agreed to by the working group. Staff is prepared to immediately issue its production request.
Staff recommends that the Commission allow ample opportunity for the public to
learn about and comment on the proposed pilot. Over 100 000 residential customers whose
households included children, elderly, or infirm persons declared that they were unable to pay in
full for energy service during the winter of 2001-02. This means that a substantial number of
customers will be directly affected by this proposal. Staff also notes that a number of entities
, AARP, Project Share and other public and private groups that provide financial assistance
were not involved in the working group but will, at a minimum, be interested in learning how it
will impact their constituencies.
Staff recommends that the Commission hold workshops in the affected areas to
provide customers with information about the proposed pilot. Staff proposes that at least one
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public hearing be held to allow customers an opportunity to orally comment on the proposal.
Staff recommends that Avista, Intermountain Gas and PacifiCorp be required to either do a
separate mailing or include a Notice of Application in its bills that advises customers of
workshop and hearing schedules and how they may file written comments. The utilities should
be directed to work with Staff in preparing the text of the notice.
Staff recommends that the Commission suspend the Application for 30 days to allow
adequate time for discovery, workshops and hearings. Staff believes that review of the
Application must be completed prior to January 1 , 2003 to have a meaningful pilot this season.
In the Notice of Application, the Commission may wish to seek comment on how to implement
the pilot after the existing moratorium period has already started.
If the Commission wishes to implement a pilot on or shortly after December 1 2002
Staff recommends that the scope of the pilot be limited to Intermountain Gas for the first year.
Intermountain Gas had the highest number of moratorium participants (107 000 residential
customers) last year. Although Staff believes that the number of participants was inflated due to
the Company s expansive definition of eligibility, there are a number of reasons why
Intermountain Gas can be singled out. For example, the Company s rates have been reduced
recently, making energy more affordable. With a significant number of space heating only
customers, the Company is particularly vulnerable to customers who do not pay their bills during
the heating season and are not motivated to pay by the threat of disconnection after the heating
season ends.Since Intermountain Gas serves southern Idaho, it is also more likely that
customers will appeal to the Commission if problems result from implementation of the pilot.
COMMISSION DECISION
1. Does the Commission wish to limit utility participation in number or by type of
service (i., gas or electric)?
2. Does the Commission wish to process this case under Modified Procedure?
3. Does the Commission wish to schedule public workshops and/or public hearings?
4. Is a Notice of Application and Commission press release sufficient to notify the
public of this proceeding? Does the Commission want to require the Applicants to use bill
stuffers or other means of direct customer notification?
5. Does the Commission wish to suspend the effective date of the Application
allow for discovery, workshops/hearings, and a reply comment period?
DECISION MEMORANDUM
a. If not, does the Commission wish to provisionally implement the pilot
program pending a final order?
b. If so, does the Commission wish to specifically seek public comment
regarding whether the pilot program should be implemented during the
months that would remain in this winter heating season, or whether
should be postponed until the pilot program can be fully implemented next
winter?
cX~f)
!1: Lisa D. Nordstro
M:GNRUO20Un
DECISION MEMORANDUM