20241031Staff Comments.pdf

RECEIVED
Thursday, October 31, 2024 10:20:47 AM
IDAHO PUBLIC
UTILITIES COMMISSION
MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11714
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )
POWER'S AND THE CITY OF IDAHO ) CASE NO. PAC-E-24-11
FALLS' JOINT APPLICATION FOR )
APPROVAL OF THE HOLMES AVENUE ) COMMENTS OF THE
ASSET TRANSFER AGREEMENT ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Michael Duval, Deputy Attorney
General, submits the following comments.
BACKGROUND
On September 4, 2024, Rocky Mountain Power, a division of PacifiCorp ("Company"),
and the City of Idaho Falls ("City") (together the "Parties")jointly applied to the Commission
for approval of an Asset Transfer Agreement between the Company and the City
("Application"). As proposed, the Company would transfer assets located on or near Holmes
Avenue in Idaho Falls to the City. The Application also outlines the City's compensation for
those assets.
STAFF COMMENTS 1 OCTOBER 31, 2024

The Company represented that it entered a Service Allocation Agreement with the City to
decrease service duplication and increase stability in their service areas in 2017. This agreement
permits the transfer of a customer's service between the parties if the utility acquiring the
customer pays the other just compensation for lost revenues and distribution facilities used to
service the customer.
The Company represented that one of its customers has requested the Company transfer
their electrical service from the Company to the City.
The Company represented that the proposed transaction is in the public interest because it
reduces service duplication while also providing the Company just compensation.
STAFF ANALYSIS
Staff reviewed the proposed transaction and believes that it supports the intent of the
Electric Supplier Stabilization Act and is consistent with prior Commission orders. In its
Application, the Company explained how this transaction complies with Idaho Code § 61-
328(3)by: (a)promoting the public interest; (b) fairly compensating the Company for its
transferred assets and that rates for supplying service will not be increased for existing
customers; and(c) ensuring that the transferred customers will continue to receive electric
service from a provider(the City) that has the bona fide intent and the financial ability to
properly maintain this public service for the customer. Staff also believes that the request is
consistent with Idaho Code § 61-332(2) in that it is facilitating a harmonious transfer between
electric suppliers. Staff believes the proposed transaction meets all necessary statutory
requirements and complies with the Commission's previous orders.
Sales Price and Accounting Treatment
Under the Agreement, the City would provide electric service to one residential customer
on Holmes Avenue (exempt from public review under Idaho Code § 74-109(3) and Idaho Public
Utilities Commission's Rule of Procedure 67) currently being supplied electric service by the
Company. The City would purchase electric facilities from the Company to serve the customer.
The City would also compensate the Company for the lost revenues arising from the customer's
departure. The Agreement defines "just compensation for lost revenues" as "an amount equal to
167 percent of the total of the respective customers' electric bills from the prior twelve-month
STAFF COMMENTS 2 OCTOBER 31, 2024

period of service." Application at 2-3. The total sale price for the transaction would be
$5,554—as shown in Table No. 1. Staff verified that the sale price listed in the Agreement
includes the replacement book value of the existing assets, the separation costs, the lost customer
revenue, and the legal and transaction costs. The method used to generate the values is
consistent with the method incorporated in the 2017 Service Allocation Agreement. The
Company's accounting treatment of the proceeds received from the sale of these assets assures
other customers will not be affected by this transaction.
Table No. 1: Calculation of Transaction Price
Sale Components Totals
Asset Valuation $1,248
Separation Costs $2,275
Lost Customer Revenue $1,200
Legal and Transaction Costs $831
Total Sales Price $5,554
The price of the existing assets was calculated by using the replacement value of each
asset being sold less depreciation. Depreciation was determined using straight-line
methodology, which is consistent with prior Commission Orders. The replacement value was
determined using the Company's Retail Construction Management System. The separation costs
are expenses incurred during the physical separation of the assets being sold from the Company's
distribution system. Legal and transaction costs include the costs of accounting, finance,
regulation, and legal expenses related to the sale.
The last component of the total transaction price that Staff reviewed was lost customer
revenue. The Company presented customer billing revenue for the 12-month period of June
2023 through May 2024. Company Application, Confidential Attachment No. 1, Exhibit A. In
response to Production Request No. 5, the Company provided copies of customer bills from
August 2023 to July 2024 but excluded June and July 2023. Staff s calculation using the more
recent 12-month verifiable period resulted in an amount of lost customer revenue $42 higher than
what was stated in the Company's Application. Staff believes it is reasonable to use the amount
STAFF COMMENTS 3 OCTOBER 31, 2024

from the Application to avoid the legal and administrative costs of updating the Asset Transfer
Agreement.
CUSTOMER NOTICE AND PUBLIC COMMENTS
In accordance with Rule 125 of the Commission's Rules of Procedure (IDAPA 31.01.01),
no customer notice is required. As of October 24, 2024, no public comments have been
received.
STAFF RECOMMENDATION
Staff recommends the Commission approve the Asset Transfer Agreement, using the total
sale price as currently written, and authorize the transfer of electric service for the residential
customer on Holmes Avenue, Idaho Falls, Idaho between Rocky Mountain Power, and the City
of Idaho Falls.
Respectfully submitted this 31 st day of October 2024.
oc
Michael Duval
Deputy Attorney General
Technical Staff: Michael Ott
1:\Utility\UMISC\COMMENTS\PAC-E-24-11 Comments.docx
STAFF COMMENTS 4 OCTOBER 31, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 31 st DAY OF OCTOBER 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-24-11, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
MARK ALDER DATA REQUEST RESPONSE CENTER
JOE DALLAS E-MAIL ONLY:
ROCKY MOUNTAIN POWER datarequestgpacificorp.com
1407 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84116
E-MAIL: mark.aldergpacificorp.com
[e-mail]
IDAHO FALLS CITY POWER
BEAR PRAIRIE
140 S CAPITAL AVENUE
BOX 50220
IDAHO FALLS ID 83405
E-MAIL: bprairie(cr�,ifpower.org
UA
PATRICIA JORDAN, SECRETARY
CERTIFICATE OF SERVICE