20081007reconsideration_order_no_30655.pdf

Office of the Secretary
Service Date
October 7, 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
McKAY CONSTRUCTION CO., INc.,
CASE NO. UWI-08-
COMPLAINANT
and
SCHMIDT CONSTRUCTION CO., INc.,
COMPLAINANT
VS.ORDER NO. 30655
UNITED WATER IDAHO INC.,
RESPONDENT.
On February 19 (20), 2008, complaints against United Water Idaho Inc. (United
Water; Company) were filed by the McKay and Schmidt Construction Companies (collectively
Complainants or Contractors). Both Complainants requested and were denied listing on the
Company s "approved contractor list" for 2008. Listing is required of contractors to qualify for
installation of domestic water facilities within residential subdivisions in United Water
certificated area of service. United Water maintained that because of the cost associated with
administering contractors, the recent decrease in construction, and the lack of projected projects
in 2008, it was not going to add contractors to the approved contractor list in 2008. McKay
requested reinstatement, having previously been on the list from 1997 to October 2005.
On July 21 , 2008, the contractors filed a Petition for Clarification of the
Commission s Order No. 26898 in Case No. UWI-96-4 wherein the Commission approved a
Stipulation and Settlement Agreement (Agreement) that established a labor in lieu of cash"
program for installation of facilities within residential subdivisions. Agreement ~ 6; RP 325.
was the contractors ' contention that the Company s administrative decision to place a limit on
the number of contractors included on the "approved contractor list" in its labor in lieu of cash
program was a decision contrary to the best interests of the Company s customers and subject to
Commission oversight and reversal. The Commission in Order No. 30624 found the Company
decision to cap the list of approved contractors at 10 for 2008 to be a business decision that does
ORDER NO. 30655
not adversely affect customers and one to which the Commission should defer. The Commission
found its prior Order needed no clarification and dismissed the complaints filed by the McKay
and Schmidt Construction Companies.
Petition for Reconsideration
On September 11 2008, Mike McKay, President of McKay Construction Company,
(individually, and not through his attorney of record, Peter J. Richardson) filed a Petition for
Reconsideration of Final Order No. 30624. Idaho Code ~ 61-626; IDAPA 31.01.01.331. In
response to the Commission s Order, McKay states that it does not appear that the Commission
addressed the letter from United Water dated August 22, 2005 to McKay Construction (2005
letter) wherein the Company states "when you are able to meet the required insurance coverage
minimums you will be allowed to perform work on United Water Idaho projects." McKay
Construction strongly feels that the Company is not honoring its stated position of placing it back
on the approved contractor list. Because of this refusal, McKay Construction contends that the
Company is adversely affecting McKay s ability to operate in a competitive marketplace.
On September 15 , 2008, United Water Idaho filed an answer to McKay
Construction s Petition for Reconsideration. RP 331.05. As a substantive matter, United Water
contends that the Petition does not allege any grounds that should cause the Commission to alter
its conclusions contained in Order No. 30624. As the Company pointed out in its Reply and
Motion dated July 31 , 2008, McKay in response to the 2005 letter, for a period of almost two and
one-half years, did not take any steps to upgrade its insurance. It is unreasonable, United Water
contends, to expect that the Company intended the offer contained in the 2005 letter to live in
perpetuity, regardless of a change in circumstances. The legal doctrine for such a claim is known
as promissory estoppel. Under that doctrine, United Water contends that a promise which is
otherwise not supported by consideration may be made enforceable under these circumstances:
The elements of promissory estoppel are as follows: "(1) the detriment
suffered in reliance (on the promise) was substantial in an economic sense;
(2) substantial loss to the promisee acting in reliance was or should have
been foreseeable by the promisor; and (3) the promisee must have acted
reasonably in justifiable reliance on the promise as made. Gillespie
Mountain Parks Estates 138 Idaho 27 59 P.3d 1227 (2002).
Here, United Water contends the Petition of McKay does not allege any facts
demonstrating that McKay justifiably relied on the 2005 offer from United Water or that McKay
ORDER NO. 30655
suffered a detriment as a result of the reliance that was substantial in an economic sense, e.
purchase of additional equipment, etc.
United Water contends that the Petition of McKay fails to comply with the
Commission s Procedural Rule 331. Relevant portions of that Rule identified by the Company
are:
Petitions for Reconsideration must set forth specifically the ground or
grounds why the petitioner contends that the order or any issue decided in
the order is unreasonable, unlawful, erroneous or not in the conformity with
the law, and a statement of the nature and quantity of evidence or argument
the petitioner will offer ifreconsideration is granted. RP 331.01.
The petition . must state whether the petitioner . requests
reconsideration by evidentiary hearing, written briefs, comments, or
interrogatories. RP 331.03.
United Water recommends that the Petition for Reconsideration be denied.
Commission Findings
The Commission has reviewed and considered the filings of record in Case No. UWI-
08-, our final Order No. 30624, the Petition for Reconsideration filed by McKay
Construction and the related answer of United Water.We have also reviewed the relevant
statutory and procedural rules regarding reconsideration of Commission Orders, i.Idaho Code
~ 61-626; IDAPA 31.01.01.331-333.
McKay Construction requests reconsideration of the Commission s Order No. 30624
issued August 21 2008 in Case No. UWI-08-01. Mr. McKay notes that the Commission did
not specifically reference the 2005 letter from United Water to McKay Construction in its Order
and hopes the Commission will reconsider its decision by ordering the Company to place McKay
Construction on its list of approved contractors. While not specifically mentioning the 2005
letter, this Commission s findings indicate that the Commission reviewed and considered the
filings of record in Case No. UWI-08-01 including the underlying complaints of Schmidt and
McKay and their Petition for Clarification. The 2005 letter was part of that record. In raising the
significance of the 2005 letter, McKay presents what is essentially a contract argument of
estoppel. While the Commission generally has jurisdiction to hear matters presented to it
regarding the regulation and supervision of public utilities (Idaho Code ~ 61-501), the resolution
of contract disputes is a matter that lies beyond our jurisdiction. Our Idaho Supreme Court has
ORDER NO. 30655
held that "the construction and enforcement of contract rights" is generally a matter which lies in
the jurisdiction of the courts and not in the Public Utilities Commission.Lemhi Telephone
Company v. Mountain States Tel. Tel. Company, 98 Idaho 692 , 696, 571 P.2d 753 , 757 (1977);
Afton Energy v. Idaho Power Company, 111 Idaho 925 , 928 , 729 P.2d 400 (1986). We find that
McKay Construction presents no argument or offer of proof that this Commission can consider
should reconsideration be granted and thus presents no reason to grant reconsideration.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED that the Petition of McKay Construction for Reconsideration of final
Order No. 30624 is denied.
THIS IS A FINAL ORDER DENYING RECONSIDERATION.Any party
aggrieved by this Order or other final or interlocutory Orders previously issued in this Case No.
UWI-08-0l may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law
and the Idaho Appellate Rules. See Idaho Code ~ 61-627.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1 tit.
day of October 2008.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Yf~Je D. Jewell
mission Secretary
bls/O:UWI-08-sw2
ORDER NO. 30655