20030521_479.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:LISA NORDSTROM
DATE:MAY 19, 2003
RE:IN THE MATTER OF THE INVESTIGATION OF ATLANTA POWER
COMPANY'S RATES AND CUSTOMER SERVICE. CASE NO. ATL-03-
On September 2000, the Commission received a petition from residents of
Atlanta, Idaho, enumerating their concerns about the electric service being provided by Atlanta
Power Company. The petition requested "a formal investigation into the reliability of electrical
service for the Atlanta townsite." At the Commission s direction, Staff processed the customer
complaints on an informal basis and worked with the Company and its customers. This resulted
in several improvements and a report detailing Staffs findings. On April 10, 2003, the
Commission issued a Notice of Proposed Order and Comment Deadline in this docket. The
Commission set a May 1 comment deadline to accept written comments from interested persons
and extended the Company s reply deadline to May 19.
PUBLIC COMMENTS
The Commission received several comments from Atlanta residents in response to its
Proposed Order. As outlined below, these comments identified a variety of specific concerns
and frequently requested the Commission provide additional information.
Procedure
Some customers objected to the informal nature and length of the investigation
authorized by the Commission.
Customers also were upset that they only had three weeks to respond to the
Commission s Proposed Order.
Some customers took issue with the number of customers designated by Staff as
customers of record" and requested a copy of the regulation that prohibits an
DECISION MEMORANDUM
individual from complaining about electricity that has been paid for but not
provided.
Accounting and Billing
Service Oualitv
Atlanta Power revenue is inadequately collected and collected in a
discriminatory manner. For example, the Company does not enforce the Master
Metering tariff for rentals in excess of one month or require separate meters for
each unit. The Company bends tariffs and Commission rules for some customers
but not for others.
Why is Atlanta Power making too much money?
reduction?
Do customers get a rate
Why were there "over-earnings" in 1999 and how does this compare to other
years? Some customers "formally requested" that the Company be ordered to
correct all of its improper accounting practices from 1993, file all of its annual
reports since 1997, and refund overpayment to customers to fund a back-up
generator.
The Company s billing method is difficult to understand and should be made
eaSier.
Has the 4.5~IkWh temporary surcharge to pay for a $57 000 hydraulic gate on the
dam been removed now that the note has been paid in full? Without a rate case
the charge should not have become permanent and any overpayments should be
returned to customers.
How can the Commission base the town s rates on "estimates" and "oaths
without supporting documentation? The Commission should disallow all
expenses in the past, present and future that do not have supporting
documentation.
What are the true costs of generating power at Kirby Dam?
Should Atlanta Power require customers to fund new transformers?
The system has not been promptly repaired as required by the Proposed Order.
The outages have been unnecessarily lengthy since 1983 , including the 2~-year
investigation period and exemplified by a 75-hour outage on March 4-2003.
The town needs and deserves an onsite back-up generator. The town previously
paid for one that was seldom used because it was costly to run and improperly
maintained. The town should not be required to pay for a new generator. Please
DECISION MEMORANDUM
provide records showing how many hours the old generator ran before it broke
and how many hours the Commission expected the generator to function.
Will the Commission implement and enforce a time limit on how long Atlanta can
be without power before a rented back-up generator must be brought in?
What is the Commission s timeline for a preventative maintenance plan and will
the Commission enforce it?
The third maintenance person recently hired is appreciated but needs more
training. When will this happen?
Customers have not received any personal notice from the Company regarding the
taped telephone message to update customers on outage information. What good
is this message without advance notice for outages due to scheduled maintenance?
Despite contrary information, advance notice has not been provided via the post
office, Beaver s Lodge and the Hub.
Non-Compliance with Commission Orders and Rules
Why does the Commission permit Atlanta Power to operate without filing the
proper annual reports and maintaining adequate books? Please explain why the
Commission has been so reluctant to enforce its own regulations.
Why didn t the Commission order Atlanta Power to file annual reports for 1998
and 1999?
When will the next review of the Company occur and what is the follow-up
procedure to ensure that Atlanta Power will accomplish everything the
Commission proscribes?
substantial fine (i., $10 000) or sanctions should be imposed for the
Company s disregard of prior Orders and required paperwork.
Some customers wish to file a "formal complaint" against the Company for
having a tariff that conflicts with a Commission Rule. The Company s tariff
requires customers that are disconnected for more than 30 days to be charged
$200 upon reconnection, but the Commission s Rules define a customer
disconnected for more than 60 days as a "new customer." IDAPA 31.21.01.
These customers demand that the tariff be removed and any improperly collected
money be refunded. According to commentors, a court in Elmore County decided
this issue in favor of Atlanta customers.
Does the Commission have a conflict of interest that prevents it from doing its
duties as a regulatory agency?
DECISION MEMORANDUM
Alternate Solutions
If customers had access to transmission lines, a new generator purchased for
$30 000 to $35 000 could operate continuously for less than the Company
current use of hydropower, even with 1 ~ gallons of diesel consumed hourly at
$2/gallon. At a cost of $17 000-$20 000, $10 000 would remain for equipment
service and operation.
STAFF COMMENTS
Staff has reviewed the customer comments received as of April 30 and reaffirmed the
results of its investigation and its recommendations. Staff provided additional information in
response to certain statements contained in customer comments dated April 26, 2003.
The individuals that drafted the comments were concerned that "again, most
customers have not been notified of the telephone number to call." The Notice of Proposed
Order and Notice of Comment Deadline to which the interested parties were responding
contained the local telephone number (864-2228) that was established to keep customers
informed of planned outages and progress on repairs when the system is out of service. This
Notice was mailed to the customers of Atlanta Power on April 10, 2003.
The comments also ask in part why they were "virtually ignored by the P.C. for
over two years since the petition." As noted in previous Staff documents, Staff has had
significant ongoing communication with the individuals who wrote these customer comments.
The comments also state in part that it took "over two years to do an audit." While
the investigation as a whole took that amount of time, the audit did not. Also, the individuals
who wrote these customer comments seem to perceive the over-earnings estimated in the audit as
overcharges to the Company s customers. This is not the case. In addition, no generator rental
costs were paid during the test year of the audit. Based upon invoices reviewed for subsequent
rentals, a month's generator rental is more than $3 000. During the course of the audit, Staff also
reviewed the Company s bank statements, returned checks, invoices for the test year and
subsequent years, and obtained financial documentation from organizations with which the
Company had such a relationship.
The individuals who wrote these customer comments also suggest other options to
provide electrical service, such as allowing the town access to the lines and revenues of the
Company to purchase and continuously run a diesel generator. Staff continues to believe that
DECISION MEMORANDUM
Atlanta Power Company is the most realistic alternative to provide affordable and reliable
electrical service to the residents of Atlanta.
The comments also take issue with the number of Atlanta Power customers of record
identified in the signatures to the petition submitted to the Commission in September 2000. As
noted in the October 2000 Decision Memorandum
, "
Staff reviewed the many signatures on the
petition and identified the names of six customers of record. Some of the others apparently are
not customers while others are members of households where one member is the customer of
record. "Staff noted that the Commission s Utility Customer Relations Rule 5 defines a
customer as "having applied for, been accepted, and is currently receiving service from a utility
or is assuming responsibility for payment of service provided to another.
Procedural Recommendation Before the Commission renders a final decision in
this case, Staff would like the opportunity to respond directly to customers in writing regarding
issues raised in the comments. Staff further recommends that the Commission schedule a public
workshop in Atlanta in June so that Staff may discuss its response and/or resolve any remaining
customer concerns in person. Following the workshop, the Commission may wish to allow
interested parties to file supplemental comments before the Commission issues a final Order.
COMPANY REPLY COMMENTS
Atlanta Power Company had not filed its Reply Comments as of the time this
memorandum was prepared. However, owner Lynn Stevenson informed Staff that he intended
to file them on Monday, May 19.
COMMISSION DECISION
Does the Commission wish to adopt Staff s recommendation for further proceedings
and a workshop? If not, does the Commission wish to adopt its Proposed Order with or without
modification?
M:ATLEO301 In2
DECISION MEMORANDUM