29036_ntc.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF ST. MARIES RIVER RAILROAD COMPANY’S OBJECTION TO ITS ANNUAL REGULATORY FEE FOR CALENDAR YEAR 2002. )
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CASE NO. SMR-R-02-1

NOTICE OF OBJECTION AND
NOTICE OF HEARING

ORDER NO. 29036

On May 6, 2002, the St. Maries River Railroad Company filed a timely Objection to its annual regulatory fee for calendar year 2002. In its objection, the Railroad stated that it had over-reported its gross intrastate operating revenue for calendar year 2001. Instead of reporting its gross intrastate operating revenue, the Railroad had inadvertently included some interstate operating revenue. Consequently, St. Maries asserts that it had over-reported its gross intrastate revenue by more than $847,767. Objection at 1. Pursuant to Idaho Code § 61-1007, the Commission initiates this case to examine the Railroad’s Objection.
BACKGROUND
A. The Commission’s Regulatory Fees
The Commission’s operating funds are derived by assessing regulatory fees upon utilities and railroads subject to the Commission’s jurisdiction. Each year, the Legislature authorizes the Commission to expense funds necessary to regulate and supervise utilities and railroads. Idaho Code §§ 61-1001 and 62-611. Idaho Code § 61-1003 provides that on or before April 1 of each year, each railroad corporation shall report its gross operating revenues from its intrastate railroad business in Idaho for the proceeding calendar year. When all the railroads have reported their total intrastate revenues, this cumulative figure is divided by the amount the Commission expends regulating railroads. For example, for fiscal year 2003 (July 1, 2002 through June 30, 2003), the expenditure amount attributed to regulating railroads is $137,000. Order No. 29006. The railroads reported gross intrastate operating revenues totaling $16,767,133 for calendar year 2001. Thus, the proportionate share of each railroad’s regulatory fee is calculated by multiplying 0.8171 percent (.008171) times its gross operating revenues. Id. The maximum assessment fee for each railroad shall not exceed one percent (1.00%) of its gross revenues, and the minimum fee shall be no less than $50. Idaho Code § 61-1004.
Once the railroad assessment is determined, the Commission notifies each railroad of its regulatory fee no later than May 1 of each year. The regulatory fee may be paid to the Commission in equal semi-annual installments due May 15 and November 15. Idaho Code § 61-1005. Any railroad may object to its regulatory fee “on or before the time specified for payment of the first installment of the assessment made against it.” Idaho Code § 61-1007.
B. The Railroad’s Objection
As mentioned above, St. Maries asserts that it over-reported its gross operating revenue. In its certification dated April 4, 2002, the Railroad reported that its Idaho gross intrastate revenue for the calendar year 2001 was $1,327,700. In its Objection, the Railroad maintains that its actual intrastate gross operating revenue for calendar year 2001 was $480,027. The Railroad alleges that it inadvertently reported $659,280 in interstate income and $188,393 in interstate car leasing income as intrastate revenue. Consequently, the cumulative total of intrastate operating revenues for all the railroads was allegedly over-reported by 5%.
DISCUSSION
The Commission’s fee assessment statutes contemplate that a railroad’s objection to its regulatory fee “shall proceed” on an expedited basis. Idaho Code § 61-1007 requires that the Commission hold a hearing regarding the fee objection within 20 days of the date the objection is filed with the Commission. Moreover, the Commission shall make and issue its findings and Order within 20 days after the hearing. Consequently, it is the Commission’s intent to expeditiously consider the Railroad’s Objection.
In this case, St. Maries alleges that it misreported its intrastate operating revenues. When a similar objection was made last year, the Commission directed that the Staff conduct an audit of the railroad’s revenues to verify the correct amount of intrastate operating revenue. See Order No. 28760 (Case No. EIR-R-01-1). Consequently, we direct the Commission Staff to expeditiously conduct an audit to verify the reported revenues of St. Maries. Once the Staff has completed its audit, a copy of the audit will be forwarded to the Railroad for its review. The Staff shall undertake and complete its audit as soon as possible.
If the Railroad agrees with the outcome of the Staff’s audit, the parties shall apprise the Commission of their agreement concerning the amount of gross intrastate operating revenue for calendar year 2001. The Commission may then vacate the evidentiary hearing. If the parties disagree, then the Commission has tentatively scheduled a hearing in this matter for June 6, 2002. If a hearing is required, the parties should be prepared to present “live” testimony and submit evidence regarding St. Maries’ gross intrastate operation revenues for calendar year 2001.
NOTICE OF HEARING
YOU ARE HEREBY NOTIFIED that if the Commission Staff and St. Maries are unable to agree on the appropriate amount of gross intrastate revenue, then this matter shall be heard on JUNE 6, 2002 AT 10:00 A.M. IN THE COMMISSION’S HEARING ROOM, 472 W. WASHINGTON STREET, BOISE, IDAHO [phone]. The purpose of the hearing will be to present evidence regarding the appropriate amount of gross intrastate operating revenue for St. Maries River Railroad in calendar year 2001. Given the expedited nature of this proceeding, the parties may present “live” testimony.
YOU ARE FURTHER NOTIFIED that all hearings in this matter will be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other assistance in order to participate in or to understand testimony and argument at a public hearing may ask the Commission to provide a sign language interpreter or other assistance at the hearing. The request for assistance must be received at least five (5) working days before the hearing by contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
E-Mail: [e-mail]

YOU ARE FURTHER NOTIFIED that all prepared exhibits must conform to requirements of Rule 267 of the Commission’s Rules of Procedure, IDAPA 31.01.01.267.
YOU ARE FURTHER NOTIFIED that all hearings will be conducted pursuant to the Rules of Procedure adopted by the Idaho Public Utilities Commission. IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this matter under Title 61 of the Idaho Code and specifically Idaho Code § 61-1007. The Commission may enter any final Order consistent with its authority under Title 61.
O R D E R
IT IS HEREBY ORDERED that the Commission initiates this proceeding based upon St. Maries River Railroad’s objection to its 2002 regulatory assessment.
IT IS FURTHER ORDERED that the Staff initiate an audit of the Railroad for the purposes of determining the Railroad’s gross intrastate operating revenue for calendar year 2001.
IT IS FURTHER ORDERED that if the Staff and the Railroad are unable to agree on the appropriate intrastate revenue amount, then this matter shall be heard as set out above. In the event that the Staff and the Railroad agree, they will notify the Commission accordingly.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of May 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

bls/O:SMRR0201_dh

NOTICE OF OBJECTION AND
NOTICE OF HEARING
ORDER NO. 29036 1

Office of the Secretary
Service Date
May 22, 2002