COMMISSION WASHINGTON UTILITIES AND ) TRANSPORTATION COMMISSION, ) Docket No. UG-970932 Complainant, ) Volume 1 vs. ) Pages 1 - 11 NORTHWEST NATURAL GAS COMPANY, ) Respondent. ) ----------------------------- ) A hearing in the above matter was held on September 17, 1997 at 9:30 a.m. at 1300 South Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge C. ROBERT WALLIS. The parties were present as follows: WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by ROBERT CEDARBAUM, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Olympia, Washington. NORTHWEST NATURAL GAS COMPANY, by SUSAN B. BERGLES, Attorney at Law, 220 NW Second Avenue, Portland, Oregon 97209. NORTHWEST INDUSTRIAL GAS USERS, by PAULA E. PYRON, Attorney at Law, Suite 1100 One Main Place, 101 Southwest Main Street, Portland, Oregon 97204 (via bridge). FOR THE PUBLIC, ROBERT F. MANIFOLD, Assistant Attorney General, 900 Fourth Avenue, Suite 2000, Seattle, Washington 98164 (via bridge). Cheryl Macdonald, CSR Court Reporter P R O C E E D I N G S JUDGE WALLIS: Let's be on the record, please. This is a pre-hearing conference in the matter of docket No. UG-970932, which is entitled Washington Utilities and Transportation Commission vs. Northwest Natural Gas Company. This hearing is being held on September 17, 1997 at Olympia, Washington pursuant to notice to all interested persons. This is a pre-hearing conference regarding a proposal for increased rates that's been made by Northwest Natural, and I would like to begin by stating that I am Robert Wallis, and I've been designated the presiding administrative law judge for this proceeding, and we would like to ask for appearances beginning with Commission staff. MR. CEDARBAUM: Thank you. My name is Robert Cedarbaum. I'm an assistant attorney general representing staff. My business address is the Heritage Plaza Building, 1400 South Evergreen Park Drive Southwest in Olympia, Washington 98504. My telephone number is area code 360-664-1188. My fax number is area code 360-586-5522. JUDGE WALLIS: For the company. MS. BERGLES: Yes. I'm Susan Bergles, assistant counsel for Northwest Natural Gas Company. My business address is 220 Northwest Second Avenue, Portland Oregon, 97209. My telephone number is 503-220-2404, and I apologize, I do not have my fax number with me. JUDGE WALLIS: Could you spell your last name for me, please. MS. BERGLES: Yes. B as in boy, B E R G L E S. JUDGE WALLIS: Thank you. And on the bridge line today we have petitioner for intervention, Ms. Pyron. MS. PYRON: Paula E. Pyron of Ball Janik LLP, 101 Southwest Main Street, Suite 1100, Portland, Oregon, 97204. Telephone 503-228-2525, and a fax number 503-295-1058. Appearing on behalf of the Northwest Industrial Gas Users. JUDGE WALLIS: And public counsel. MR. MANIFOLD: Thank you. Robert F. Manifold, assistant attorney general appearing as public counsel. My address is 900 Fourth Avenue, Suite 2000, Seattle, Washington, 98164. Telephone number is 206-464-6595. My telefax number is 206-389-2058, and -- well, we're not doing -- JUDGE WALLIS: Are there any other appearances to be made this morning? Let the record show that there is no response. Let us begin with -- I think I've said that about three times. Let's have petitions for interventions at this time. We've received a petition from Ms. Pyron, counsel for Northwest Industrial Gas Users. Is there any objection to that petition for intervention? MS. BERGLES: No. MR. CEDARBAUM: No. MR. MANIFOLD: No. JUDGE WALLIS: There is no objection and the petition is granted. Are there any other petitions for intervention? Let the record show that there is no response. Mr. Lott is in the process of getting us connected here. Let's take just a minute off the record. (Discussion off the record.) JUDGE WALLIS: Let's be back on the record, please. We are going to make do with the teleconference equipment that we have in place. At this point, staff counsel has indicated a desire to bring us up to date on discussions among the parties as they might affect the course of the proceeding and scheduling. Mr. Cedarbaum. MR. CEDARBAUM: Thank you, Your Honor. Yes. As I indicated before we went on the record, the staff and the company over the past several weeks and months have had discussions with respect to settling this case. We would like to report this morning that we think those discussions are going to be successful. We do have an agreement, in principle at least, as to all the issues in the case including revenue requirement, rate design and rate spread, and that doesn't mean necessarily that there aren't some differences that need to be worked out. There are some differences which are minor and other differences -- as I was saying, there are some differences between the staff and the company, none of which I think are insurmountable. I just think we need some more work to work out those details and we hope to have that accomplished over the next couple of weeks. We need that much time partly because some of the people that are main players in working out those details are out of their offices over that period of time. The plan would be to have a document that we can circulate to Ms. Pyron and Mr. Manifold that we can then discuss with them, and they actually have seen prior drafts of a document, but we would hope to have all parties sign off on a document that we could file with the Commission by October 1, which would be two weeks from today, hopefully sooner, but probably no later than that point in time. And then we would ask that the Commission set a hearing date for presentation of that document to the commissioners, and whether or not the Commission would also use that hearing time as a public hearing is something that we would like to discuss. I've had some discussions with Mr. Manifold about the necessity of that, and we need to at least discuss that issue. The process we would see for that purpose would be -- well, there are two options, I guess. One is the Commission can put out a notice of hearing as soon as possible for 20 days from now, but when that notice goes out the document will not have been filed, so the other option would be to wait until the document is filed and then put out a notice of hearing that would be on less than 20 days' notice, and the staff has no objection to that latter course of action. As I understand the company's purposes, they would like to have a Commission order and rates effective by November 1 at the latest, so we're trying to accommodate that. So I think that pretty much brings you up to date. Like I said, we're optimistic but we're not completely there. Obviously, there are no promises that we're going to be successful but we think we will be, and we think we'll have a document with the Commission by October 1. The final point is that I had discussions yesterday with Ms. Bergles and the company about what happens if the settlement talks fall through. We would then, of course, have to schedule hearings for the presentation of testimony and the prefiling of testimony for the rest of the case. The company -- I understand the company will agree to a waiver of the suspension period for a reasonable amount of time to accommodate any longer schedule that would be necessary because of the delay that would have been caused by the settlement talks. We didn't discuss a specific time frame for that, but in concept I think we have a commitment on that part, but Ms. Bergles can express the company's position on that. MS. BERGLES: Yes. The company has agreed to waive the suspension period if necessary if settlement talks break down, but we have not spoken about the specific dates. JUDGE WALLIS: And from the bridge line? Public counsel? Let's be off the record. (Discussion off the record.) JUDGE WALLIS: Let's be back on the record, please. Public counsel has some comment regarding public hearing. MR. MANIFOLD: Yes. I've been advised that the Commission has received about 15 letters regarding this matter, most, but not all, in opposition. We in our office have not received any, to my knowledge, on this case. There are a couple of possibilities. One would be to do the usual, if you will, opportunity for public hearing presumably in the Vancouver, Washington area. There are at least two other possibilities given the size of the impact on customers and given the relatively small number of people who have expressed an interest, and I would like to throw those other two ideas out for consideration. One would be to do what we might call a paper comment in which the Commission perhaps in cooperation with the company would get some sort of announcement or press release issued and send actual letters to the people who have submitted comments with copies of the settlement or a description thereof, and whatever other notice to the public would be useful and practical, with giving members of the public some period of time like a couple of weeks to submit written comments, either in the usual fashion or by E-mail. That would be one possibility, and in that event if that was deemed desirable and adequate then we wouldn't have a public hearing in Vancouver. Another possibility would be to have a hearing in Vancouver via video conference. I believe, but I'm not 100 percent certain, that the state has -- I know they have video teleconferencing hookups. I think they may have one in Vancouver. They certainly have one in Olympia, and we could do a public hearing that way. That would avoid having everybody go to Vancouver -- well, I guess some people could go to Vancouver if that's closer for them, but some could be in Olympia. That would probably require one Commission staff public involvement person going to Vancouver, and that's okay. I've discussed both those possibilities with the Commission public involvement staff and they're fine with either one of those. JUDGE WALLIS: Why don't we go off the record for discussion of options and potential schedule, unless someone right now would like to make a response on the record. (Discussion off the record.) JUDGE WALLIS: Let's be back on the record, please. We have engaged in some discussions about the status and nature of hearings in this proceeding and potential dates, and then procedural details to speak to those questions. It's been determined that there will be a hearing for the purpose of receiving the settlement, if one there be, and it will be scheduled between the 14th and the 20th of October for Vancouver, Washington. In conjunction with that hearing, there will be an opportunity for members of the public to present testimony. The deadline for filing the stipulation would be Friday, October 3rd if we are able to schedule the hearing on the 20th. If the hearing must be scheduled during the prior week, the deadline for filing the stipulation would be Wednesday, October 1st. I expect that we will know what our scheduling parameters are by the end of the day today. There will be a pre-hearing conference order memorializing these agreements, and I will, in addition, E-mail each counsel as soon as I am aware of what dates are feasible, and when we get a schedule confirmed. In scheduling this for Vancouver, we keep open the possibility that video conferencing might be used either as an adjunct to the hearing or, depending on circumstances, could be, but is not likely to be, the primary means of Commission participation. If the parties are unable to achieve a settlement then the parties will advise the Commission no later than the scheduled time for filing the stipulation and settlement agreement, or if the parties are aware earlier the parties will advise the Commission at the earliest possible date so that scheduling of a full hearing can be accomplished. The parties in conjunction with their stipulation, if one is filed, will provide a list of exhibits with exhibit numbers which will facilitate the presentation of those exhibits during the hearing. Is there anything that I have skipped over or misstated? I hear no comment to the contrary. Is there anything further to take place this morning? It appears that there is not. Thank you all very much for attending either in person or by teleconference, and this pre-hearing conference is adjourned. (Pre-hearing conference adjourned at 10:20 a.m.)