20050812Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:KIRA DALE PFISTERER
DA TE:AUGUST 8, 2005
RE:APPLICATION OF KOOTENAI ELECTRIC COOPERATIVE, INC. TO
APPROVE A CUSTOMER EXCHANGE AGREEMENT BETWEEN
KOOTENAI ELECTRIC AND THE CITY OF PLUMMER, CASE NO.
CO7-05-
On June 24, 2005 , Kootenai Electric Cooperative, Inc. (KEC) filed an Application
seeking the Commission s approval of a contract between KEC and the City of Plummer to
exchange an existing customer (Agreement). The Agreement, dated April 6 , 2005 , is submitted
for the Commission s review pursuant to the provisions of the Electric Suppliers Stabilization
Act (ESSA). Idaho Code 9 61-332 et seq. On July 15 , 2005 , the Commission issued a Notice of
Application and Modified Procedure. See Order No. 29823. No comments were received other
than those submitted by Commission Staff.
THE AGREEMENT
The Agreement allows the City to extend its lines to provide new three-phase electric
service to a customer, Kurt R. Morris, who would otherwise be KEC's customer. Mr. Morris is
currently a KEC customer for single-phase electric service and applied to KEC for three-phase
service. To provide three-phase service to this location, KEC would be required to extend its
facilities approximately three (3) miles at substantial cost to Mr. Morris. The City can provide
three-phase service to Mr. Morris at substantially less cost by making a line extension of
approximately one-quarter (1/4) mile. Plummer is willing to extend its three-phase service to
Mr. Morris, and KEC is willing to release Mr. Morris as a customer of three-phase electric
service. In addition, the parties agree that the Mr. Morris will remain a KEC customer for all
current and future single-phase electric service.
DECISION MEMORANDUM
STAFF COMMENTS
Staff reviewed the Agreement and found it was consistent with the purposes of the
ESSA. The ESSA prohibits an electric supplier from serving a customer already served by
another supplier, except as provided in the Act. Idaho Code 9 61-332B. The Act allows electric
suppliers to contract with one another for the purpose of exchanging customers provided that the
Commission approves the contract. Idaho Code 9 61-333. The Commission approves such
contracts only upon finding that the transfer is consistent with the purposes of the ESSA. Idaho
Code 9 61-334(B)(I). The purposes of the ESSA are: (1) to promote harmony among and
between electric suppliers; (2) prohibit the "pirating" of consumers; (3) discourage the
duplication of electric facilities; (4) actively supervise the conduct of electric suppliers; and (5)
stabilize the territories and consumers served with electricity by such electric suppliers. Idaho
Code 9 61-332(2).
According to Staff, the Agreement is consistent with the ESSA, because it promotes
harmony between the electric suppliers who have jointly agreed to exchange the right to serve
the new customer; does not involve the pirating of customers; does not involve the duplication of
services; requires Commission approval; and does not pose a threat to or affect the stability of
either of the electric suppliers involved. Staff also noted that the Agreement provides the least
cost solution to the customer s request for service. Therefore, Staff recommended approval of
the Agreement.
COMMISSION DECISION
Does the Commission wish to grant the Application of Kootenai Electric Cooperative
Inc. and approve the contract between Kootenai Electric and the City of Plummer to exchange an
existing customer?
ctJ
Kim D e Pfiste~er
M:CO7EO501 kdp2
DECISION MEMORANDUM