ORDER NO. 98-107

ENTERED MAR 19 1998

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UE 94 (Phase II)

DISPOSITION: ICNU MOTION GRANTED IN PART

Introduction

On February 26, 1998, the Industrial Customers of Northwest Utilities (ICNU) filed a protest to PacifiCorp’s Conditional Acceptance of an Alternative Form of Regulation (AFOR). ICNU believes that the Conditional Acceptance is an inappropriate response to the Commission’s January 15, 1998, Draft Order and, consequently, argues that it should be rejected. In the alternative, ICNU requests that the Commission hold a hearing to allow all interested parties to comment on the AFOR plan proposed by the Draft Order, as modified by PacifiCorp’s conditional acceptance.

On March 12, 1998, PacifiCorp filed a reply to ICNU’s protest. PacifiCorp states that its Conditional Acceptance is a proper response to the Draft Order and argues that it is clearly within the Commission’s discretion to accept or reject PacifiCorp’s proposed changes.

Certification to the Commission

Under OAR 860-012-0035, presiding officers have the authority to decide procedural matters, but not the ability to rule on motions "that involve final determination of the proceedings." Because ICNU’s motion affects the final determination of this docket, the presiding officer certifies the questions raised therein to the Commission for consideration and disposition.

Request to Reject Conditional Acceptance

ICNU first argues that PacifiCorp’s Conditional Acceptance does not comply with the Commission’s requirements set forth in the Draft Order. ICNU states that the Draft Order gave but two options to PacifiCorp: accept or reject the modified distribution-only AFOR. ICNU contends that PacifiCorp’s Conditional Acceptance is, in effect, a counter-offer which should be rejected because it is not an acceptance of the Commission’s proposal.

In response, PacifiCorp contends that ICNU reads the Draft Order too narrowly. It notes that the Draft Order made significant changes in the Stipulated AFOR filed by the Joint Parties. Given the significance of the AFOR and the extensive effort put into this case, PacifiCorp contends that it is reasonable for the Commission to consider limited requests for clarification and modifications to service quality standards and bond ratings. We agree.

In discussing a final schedule for Phase II of this proceeding, PacifiCorp requested the issuance of a Draft Order to allow the company to respond to any changes the Commission might make to the Stipulated AFOR. The presiding officer granted PacifiCorp’s request, and adopted a schedule that allowed PacifiCorp two weeks to file a written response to the Draft Order. See Memorandum, January 27, 1997.

When we ultimately issued the Draft Order after holding the matter in abeyance during the 1997 Oregon legislative session and conducting further hearings, we did not include language expressly inviting a counter-offer from PacifiCorp. However, we did not intend to preclude the company from requesting clarifications or minor changes to the proposed AFOR. Had that been our intent, we would have issued a final order similar to what we did in offering an AFOR to U S WEST Communications, Inc. See Order No. 91-1598. Accordingly, ICNU’s request to reject PacifiCorp’s Conditional Acceptance is denied.

Request for Hearing

ICNU next argues that, if we intend to consider PacifiCorp’s Conditional Acceptance, a hearing should be held to allow all parties the opportunity to comment on the Draft Order and PacifiCorp’s proposed modifications. Citing ORS 757.210(2), it contends that the Modified Distribution-Only AFOR should be subject to a public hearing. That statute provides, in part:

As used in this subsection, "alternative form of regulation plan" means a plan adopted by the commission upon petition by a public utility, after notice and an opportunity for a hearing, that sets rates and revenues and a method for changes in rates and revenues using alternatives to cost of service regulation. (emphasis added.)

Relying on the italicized language above, ICNU believes that an additional hearing is necessary to determine whether the modified distribution-only AFOR is appropriate and meets the requirements of the statute.

A review of this docket’s history reveals that we have twice provided the parties with an opportunity for a hearing regarding a proposed AFOR. In the first hearing, held in January 1997, the parties filed comments in response to a Stipulated AFOR filed by the Joint Parties. After rejecting the Stipulated AFOR, we scheduled a second hearing and invited the parties to comment on a variety of AFOR related issues. At that second hearing, held in October 1997, the Joint Parties outlined a distribution-only AFOR that provided the basic framework for the AFOR set forth in the Draft Order.

Considering this history, we believe that the procedural requirements set forth in ORS 757.210(2) have been satisfied. Nonetheless, in the interest of full participation by the parties, we will grant ICNU’s request to provide additional written comment on the Draft Order and PacifiCorp’s proposed modifications. To avoid further burdening the extensive record in this case, the parties shall limit any comments to: (1) modifications made by the Commission in the Draft Order to the distribution-only AFOR outlined by the Joint Parties at the October 1997 hearing; and (2) proposed modifications suggested by PacifiCorp in its Conditional Acceptance of the January 15, 1998, Draft Order. Any comments must be received within two weeks from the date of service of this order.

IT IS SO ORDERED.

Made, entered, and effective _____________________________.