COMMISSION WASHINGTON UTILITIES AND ) TRANSPORTATION COMMISSION, ) Docket No. UE-971422 Complainant, ) Volume 1 vs. ) Pages 1 - 16 THE WASHINGTON WATER POWER ) COMPANY, ) Respondent. ) ----------------------------- ) A pre-hearing conference in the above matter was held on November 18, 1997 at 1:50 p.m. at 1300 South Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge MARJORIE R. SCHAER and DENNIS J. MOSS. 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. THE WASHINGTON WATER POWER COMPANY by DAVID J. MEYER, Attorney at Law, 1200 Washington Trust Building, Spokane, Washington 99204. INDUSTRIAL CUSTOMERS OF NORTHWEST UTILITIES, by MELINDA J. HORGAN, Attorney at Law, 1300 SW Fifth Avenue, Suite 2915, Portland, Oregon 97201. Cheryl Macdonald, CSR Court Reporter P R O C E E D I N G S JUDGE SCHAER: We'll be on the record. Hearing will come to order. This is a hearing in docket No. UE-971422 which is a filing by the Washington Water Power Company for a banded rate tariff for new commercial customers taking electric service. This is a pre-hearing conference that was set by notice of pre-hearing conference dated November 6, 1997. It's taking place on November 18, 1997 in Olympia, Washington. The hearing is being held before administrative law judges Marjorie R. Schaer and Dennis J. Moss. I would like to begin this morning by taking appearances. We'll then take motions or petitions to intervene and then we will go off the record to discuss scheduling and other issues. So let's start with appearances, and in giving your appearance, please include your telefax number, if you would. Begin with you, Mr. Meyer. MR. MEYER: Thank you. Appearing for the Washington Water Power Company, David Meyer. The name of the law firm is Paine Hamblen Coffin Brooke and Miller. Law offices in Spokane, Washington, 1200 Washington Trust Financial Center. Phone number is 509-455-6000, and the fax number is 509-838-4626. JUDGE SCHAER: Thank you, and for the Commission staff, please. MR. CEDARBAUM: My name is Robert Cedarbaum. I'm an assistant attorney general. My business address is the Heritage Plaza Building, 1400 Evergreen Park Drive Southwest in Olympia. The zip code is 98504. My telephone number is area code 360-664-1188 and the fax number is area code 360-586-5522. JUDGE SCHAER: Thank you, Mr. Cedarbaum. And then for the intervenors, please, Ms. Horgan. MS. HORGAN: My name is Melinda Horgan. I'm here on behalf of the Industrial Customers of Northwest Utilities. My law firm name is Duncan, Weinberg, Miller & Pembroke. Our address is 1300 Southwest Fifth Avenue, Suite 2915. That's Portland Oregon, 97201. My phone number is area code 503-241-7242. My telefax number is 503-241-8160. JUDGE SCHAER: Thank you. The first order of business then will be petitions and motions to intervene. I have received one motion from the Industrial Customers of Northwest Utilities. Have all counsel received a copy of that petition? MR. MEYER: I have not. JUDGE SCHAER: Would you please provide a copy to Mr. Meyer, and I will give you just a moment to glance over this. Ms. Horgan, do you have anything to add to your petition? MS. HORGAN: No, I do not. JUDGE SCHAER: I had asked you while we were off the record if you would be willing to indicate on the record which of your members are located within the Water Power service territory. Are you prepared to do that at this time? MS. HORGAN: Yes, I am. The ICNU members who are located in Washington Water Power service territory are Boeing, Boise Cascade, Hewlett-Packard, Inland Empire Paper Company and Potlatch Corporation. JUDGE SCHAER: Thank you. Is there any objection to the participation of the Industrial Customers of Northwest Utilities in this proceeding? MR. MEYER: Let me confer with my client if I can for just a moment. JUDGE SCHAER: Certainly. (Discussion off the record.) MR. MEYER: The scope of their intervention is as stated in the petition. I gather the two issues is number one whether the banded rate is within the statutory authority and secondly whether it's discriminatory, at least the tariff that we filed is discriminatory? Are those the two issues that you mean to address? MS. HORGAN: Those are the two issues that we're aware of at this point in time. MR. MEYER: With that, we have no objection. JUDGE SCHAER: Mr. Cedarbaum? MR. CEDARBAUM: I have no objection. I just wanted to clarify from Ms. Horgan that the customers that you listed are all on the Washington service territory of Water Power or would that also be Idaho, because I wasn't sure about that. MS. HORGAN: I have to say that probably Washington Water Power can answer this question better than I can. I believe that Potlatch is in Idaho. I'm not sure if they have any facilities located in Washington or not. I believe they're exclusively in Idaho, but with that exception of Potlatch I believe that all the other members that I listed are located in Washington state. MR. CEDARBAUM: I have no objection to the intervention. JUDGE SCHAER: Then hearing no objection, I will grant -- MR. MEYER: May we have just one moment? I'm sorry. (Discussion off the record.) MR. MEYER: Excuse me. I'm just advised that all of the customers identified are all schedule 25 customers and would not otherwise qualify for the banded rate. They wouldn't meet the consumption criteria, so that there is -- and that's confirmed by our rate analyst, so that raises the question as to whether this particular intervenor has standing. So perhaps we might hear more from counsel in that regard. MS. HORGAN: I believe that that's actually the point of our intervention is that we are interested in the issue of banded rates as it presents the question of discrimination for existing customers. As I understand it, the banded rate proposal is directed toward new customers coming into the service territory, and our concern is the rate impacts that they may have on existing customers. JUDGE SCHAER: And is it my understanding of your concern, Mr. Meyer, that the banded rate tariff relates to schedule 23 and these are schedule 25 customers? MR. MEYER: And these customers because of their consumption of volumes and patterns wouldn't otherwise qualify under the proposed schedule 23 as we've envisioned it. Is that correct? I'm advised that is correct. MR. CEDARBAUM: Your Honor, if I could be heard. I would agree with the comment from Ms. Horgan that one of the issues in the case is whether or not the proposed tariff is discriminatory under the conditions that the company proposes, so we have to take a look at that. We shouldn't be excluding intervenors from raising discrimination issues that the tariff may raise itself. MR. MEYER: Well, as long as we're clear on given what I believe to be the case are the interests of this particular intervenor, and that is with respect to a subset of customers, if you will, that wouldn't otherwise qualify for this, and I gather their position then will be one of arguing that this is or is not discriminatory inasmuch as they would not be eligible to participate. So with that understanding, as is true with any customer, I suppose they would have standing to intervene, and so we don't object, but I just want it to be clear with respect to their constituents seeing just what their interest is in this case. JUDGE SCHAER: I'm going to grant the motion to intervene. I believe that these customers are customers of the company that are not residential customers and therefore might have an interest at some point in having a banded rate applied to their tariff as well, and in seeing how the law develops on that issue they also, I believe, would have an interest in raising discrimination issues and looking at how this group of customers may be proposed to be treated differently than they are being treated, so I will grant the intervention. MR. MEYER: May I just add one more thing for the purpose of the record? I'm also advised that given the schedule that those particular customers that Ms. Horgan identified are on, given that schedule that they're on, I am advised that their rate is currently less than the floor of the banded rate. Is that correct? So any offerings we would make under this proposed tariff would be at a rate actually higher than the rate that they otherwise presently enjoy. JUDGE SCHAER: Are you objecting, Mr. Meyer? MR. MEYER: I am not, but I'm just trying to clarify insofar as I know it what their interest may appear to be, and enough said. JUDGE SCHAER: All right, thank you. Then my ruling stands and let's move forward. Is there anyone else in the hearing room who wishes to move to intervene at this time? Hearing no response we will next discuss who will be the contact persons for each party. Am I correct in assuming that the counsel who have just appeared will be the contact person for the parties they represent? MS. HORGAN: Yes. JUDGE SCHAER: Then that brings us to scheduling, and have the parties discussed scheduling amongst themselves? MR. CEDARBAUM: Mr. Meyer and I have had discussions late yesterday, and I think we're in agreement on a concept but we haven't discussed the details yet. JUDGE SCHAER: Well, why don't we go off the record at this point and you can describe that concept to us and include the other counsel in the discussions and perhaps we can put some detail on to the concept. We're off the record. (Discussion off the record.) JUDGE SCHAER: Let's be back on the record then. While we were off the record we discussed scheduling for the remainder of the proceeding, and we have determined to address this proceeding in a two- stage process, and the first stage the parties will brief the legal issue of whether or not the banded rate statute is available to the Washington Water Power Company due to circumstances presented in this proceeding, and that has been agreed by the parties to be a legal determination that does not require any factual predicate, and briefing will take place in the following order. The company will brief its position if this is allowed in briefs that are to be filed by December 3, 1997, and the intervenor -- just let me ask, are all parties going to brief their position by the 3rd, and then all parties respond to each other on the 12th? MR. CEDARBAUM: I think the idea was simultaneous opening and submittal reply briefs. JUDGE SCHAER: Thank you. So all parties, Commission staff, intervenors and the company will file their initial briefs on December 3, 1997, and all parties will file their reply briefs on December 12, 1997. And the second stage of the proceeding, if one is to be held, and at least the prefiling by the company will in all likelihood need to take place before that is known. The company will file its direct case on December 22nd, 1997. The Commission staff and intervenors will file their direct cases on January 29, 1998. The Washington Water Power Company will file its rebuttal on February 11, 1998 and hearing in this matter will be held on March 3rd and 4th, 1998 with a brief due on March 13th, 1998. MR. MEYER: I think it was 12th. JUDGE SCHAER: Was it the 12th? Okay, excuse me. I didn't change that one. I changed the other dates. I need to tell the parties at this point I have not checked the March 3 and 4 dates with the commissioners' calendars. If there is some conflict that arises, which I don't expect at this point, I will let you know and through a conference call or some other means try to set alternative dates before the pre-hearing conference order issues in this matter. Parties have asked that the Commission trigger the discovery rule and I will do that at this time. The means of discovery available under WAC 480-09-480 will be available in this proceeding. The rule will be followed with the exception that the time for responses to data requests will be shortened from 14 calendar days to 7 calendar days, and parties are encouraged even with that shortened time to expedite responses even more, if they are able to do so, and to work cooperatively together to try to keep information flowing and keep this process working as well as it may. The parties have asked that a protective order be issued in this matter, and I will have the Commission issue a protective order in this matter. I would ask you to familiarize yourself with the provisions of the Commission's protective order and with the forms that are required to be filed under that order. Please, when you are filing materials that are confidential, make sure that you segregate them and treat them appropriately in accord with the terms of that order so that we do not have materials that should be kept confidential in some way being released inappropriately. Responses to discovery requests should be sent directly to Mr. Cedarbaum as counsel for the Commission staff. Do not send those through the Commission secretary, but all other prefiled materials and case-related correspondence needs to be filed through the Commission secretary. If the Commission secretary has not logged it in it is not filed under the Commission's rules. Commission asks that you use its post office box address which is Post Office Box 47250, Olympia, Washington 98504-7250. For prefiled materials you need to send an original plus 12 copies, please. You do not need to send courtesy copies to Judge Moss or to me, but at any time that you are sending time-sensitive materials to us, you need to make sure that the Commission records center knows that the materials are time- sensitive and that our copies need to be hand delivered to us immediately. Now, is there anything else that we discussed off the record that we need to talk about or put on the record that has not been addressed? MR. MEYER: Just a minor point of clarification. JUDGE SCHAER: Certainly. MR. MEYER: At least for the interim, should we provide where necessary copies to both you and to Judge Moss? JUDGE SCHAER: Well, as I indicated, you do not need to provide courtesy copies to us, but, yeah, if there are -- MR. MEYER: I mean special correspondence. JUDGE SCHAER: Special correspondence, things you need handled quickly you will be smart to send them to both of us because there are times that I am not here that he will be or the reverse, and that way you're more likely to get things treated quickly. MR. MEYER: That's the same address, I assume, common office? JUDGE SCHAER: Yes. MR. CEDARBAUM: Just one comment, Your Honor, with respect to scheduling. I just think the record should be clear that at least the bifurcation of the case is a process that we've adopted in response to the company's proposal to bifurcate the case. The staff had originally proposed that we not do that, that we just brief all the issues up front and get the case resolved on fairly short order. I just think the record should be clear that the bifurcation is something that was the company's idea and that we're accommodating that along with our own needs to have the case scheduled so that we can file our testimony in a reasonable amount of time. I just think it's important to place that on the record given the urgency that I think we all felt from the Wednesday meeting when this first came up. For whatever reason that may have happened, it appears that the case doesn't seem to be as urgent as we first understood it to be. JUDGE SCHAER: Thank you, Mr. Cedarbaum. I will indicate that the Commission also was prepared to go ahead and address all issues and was also, as you were, willing to accommodate the company's decision on this point as to how they wanted to proceed, and that we have done that and set up an early time frame for resolving that issue, and then also have attempted to schedule the remainder of the case as expeditiously as possible so that we may provide answers on these questions much earlier than the end of the suspension period in this proceeding so that the company may move forward with what it needs to do. MR. MEYER: If I might just respond briefly. JUDGE SCHAER: Certainly. MR. MEYER: We're appreciative of the efforts of the parties to expedite this. I just want to make it clear of record that we're still anxious for an expedited process. We suggested, and the parties have agreed, to a bifurcation of that process but the end result leading to an order as we've discussed, and those kind of time frames, latter part of March hopefully or early April at the very latest, it reflects in our view the need for a, if you will, an outer limit on when we're going to get an order, and this is, given the circumstances, a reasonable attempt at expediting the schedule and we're appreciative of that, but we do want to make it clear that this case does need to be expedited. Thank you. JUDGE SCHAER: You're welcome. Is there anything further before we conclude today's proceedings? Hearing nothing then we will be off the record. (Pre-hearing conference adjourned at 2:50 p.m.)