20020923Idaho Power's Response.pdf

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IDAHO POWER COMPANY
O. BOX 70
BOISE, IDAHO 83707
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September 20, 2002
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Weldon B. Stutzman
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ill 83720-0074
Re:Case No. GNR-02-
Response to Staff Proposal Dated September 6, 2002
Dear Mr. Stutzman:
As requested in your letter of September 6, 2002, Idaho Power Company (the "Company ) is
submitting its response to Staff's proposal regarding an appropriate formula for determining pole
attachment rates in Idaho. The Company is addressing the Staff's "Modified Benewah Formula
as adjusted by Staff in your September 6, 2002 letter and the enclosure thereto.
The Company believes that the major issue before the Commission in this proceeding is the
allocation of the cost of unassigned space on distribution poles between attaching parties. All
parties seem to agree that the cost of the pole space used by an attaching party should be borne
by that attaching party. However, significant differences between the parties arise concerning
the allocation of the costs of support and clearance space, safety space, and unassigned usable
space to attaching entities.
Idaho Power has several comments on the Staff proposal:
Idaho Power s Proposal.
Idaho Power s proposal for a formula for determining pole attachment rates in Idaho was
detailed in the Company s July 31 , 2002 letter to Weldon B. Stutzman, Re: Case No. GNR-
02-, Answers to Workshop Questions. This proposal includes an allocation of the unusable
space on the pole, as well as the usable space needed for the attachment.
Elements of Idaho Power s proposal and the rationale behind the proposal include:
The cost of the space used for an attachment is borne by the attaching party as a
percentage of "usable" space.
Weldon B. Stutzman
Page #2
September 20 2002
The cost of the support and clearance space included in "unusable" space is shared by
the attaching parties. This space clearly is required for all attaching parties.
Safety space is included in "unusable" space. Idaho Power s view is that this space is
required only because of the presence of attachers other than Idaho Power.
Two-thirds of the cost of buried, clearance, and safety space (unusable space) is
allocated equally to attaching parties. The two-thirds factor recognizes the subordinate
position of attaching entities that are not the pole owner.
Idaho Power believes that its proposed attachment rate methodology, (which distributes the cost
of the support and clearance space to all attaching entities) provides fair pole attachment
compensation to Idaho Power, which directly benefits the Company s customers through reduced
revenue requirement (and electrical rates).
2. Staff's Proposal.
The Staff proposal is a usable space formula, which distributes the cost of the pole based only on
the allocation of usable space. Although Staff proposal does not equitably share the cost of the
unusable space, it does include an allocation of the safety space between attaching parties. The
proposal recognizes an alternative way of allocating costs and, to this extent, the proposal has
merit. However, Idaho Power believes that the Staff proposal should include the following
changes:
Idaho Power believes that the full 40-inch safety space should be allocated to the other
attaching parties (excluding the pole owner), since the other attaching parties create the
need for the safety space. Under this approach, the cable TV company would be
assigned a percentage of the pole cost under the following formula:
(1 foot + (40 inches
number of
attachers
total usable space allocated
to the parties
The pole owner should not be included as an attaching entity for purposes of allocating
the allocation of safety space. Since only one-half of the safety space is being
apportioned to the attachers under the Staff proposal, the pole owner is already burdened
with the cost of the other one-half and should not be included as an attaching entity in
the safety space being apportioned to the cable attachers. As explained above, the
Company considers the full 40 inches of safety space to be required for the cable
attachments.
Weldon B. Stutzman
Page #3
September 20, 2002
If the usable safety space is to be reduced from 2 feet to 1 Y2 feet under the Staff proposal
the total usable space should be reduced to 11.5 feet. The Commission decided in the
Benewah case that 2 feet of safety space would be included in the usable space. If only
Y2 feet of safety space is now to be allowed as usable space, then the total usable space
of the pole should be reduced from 12 feet to 11.5 feet to recognize this reduction of
usable space.
The Company believes that the Staff's formula does not properly allocate the cost of unusable
space to all attaching parties. The Company s formula recognizes that all attaching parties
benefit equally from the unusable support and clearance space of the pole, and accordingly
divides the costs of such unusable space equally among the attaching parties (with a 2/3
reduction for cable TV attachments, reflecting the utility s rights of ownership of the pole).
3. Evidentiary Hearing versus Briefs and Oral Arguments.
Idaho Power explained at the workshop that while it had serious reservations regarding several
elements of the Staff proposal, the Company was willing to accept the proposal of the Staff
presented at the workshop, in the interest of compromise. However, a number of the other
parties were unwilling to accept the Staff's proposal , and recommended discontinuation of the
workshop and presentation of the issue to the Commission in a contested proceeding. While
Idaho Power regrets that a compromise does not appear to be achievable through the workshop
process , the Company has no objection to submitting the case to the Commissioners in a formal
proceeding in lieu of continuing the workshop.
Idaho Power is not able to say at this point whether an evidentiary hearing is required for the
proceeding before the Commissioners. Idaho Power s preference would be to avoid such a
hearing and stipulate to the factual "inputs" that are to be included within the appropriate pole
attachment formula (the Idaho Power description of these inputs is set forth in the Company
responses to the Staff's pre-workshop questions). However, other parties may disagree in some
respects with the Idaho Power inputs, and a proceeding may be required to settle any disputes
regarding the Idaho Power figures. Furthermore, other parties may raise factual issues that go
beyond the scope of pole attachment inputs. For instance, the comment was made at the
workshop that increased pole attachment rates could have a severe financial impact on cable TV
companies , and interfere with the extension of cable TV and internet service to rural areas.
such factual claims are to be asserted at the Commission proceeding, Idaho Power believes that
their accuracy must be thoroughly reviewed through discovery and any resulting evidentiary
proceeding.
In summary, Idaho Power believes that the parties should attempt to stipulate to all agreed upon
input values for the pole attachment formulas. If there are material differences between the
inputs submitted by Idaho Power and the other parties in the pre-workshop submittals, those
Weldon B. Stutzman
Page #4
September 20, 2002
differences should be worked out and stipulated to as fully as possible. However, if there are
remaining disagreements regarding input values or factual assertions that go beyond the scope of
the pole attachment formula calculation, Idaho Power believes that an evidentiary hearing would
be required to resolve those factual issues.
One other procedural issue was raised at the workshop regarding the scope of the Commission
authority over pole attachment fees. A number of parties questioned whether it was appropriate
for the Commission to establish a pole attachment fee formula that would be applied to pole
attachment fee disputes. Such a procedure, the parties contended, was in effect resolving the
dispute in advance of an actual dispute coming before the Commission, which was necessary in
order to trigger the Commission s jurisdiction. The argument advanced was that an attaching
party would not agree to pay more (and the pole owner would not agree to accept less) than the
fee that would be assessed under the Commission s formula if the matter were to go to dispute
resolution. Based on this logic, it was asserted that the Commission s establishment of a pole
attachment formula would exceed the Commission s statutory authorization to establish pole
attachment fees, which is expressly limited to dispute resolution under Section 61-538 of the
Idaho Code.
Idaho Power recognizes that there is a pending dispute resolution proceeding between Idaho
Power and Cable One. Accordingly, whether that dispute is resolved by the workshop process
and then applied to the dispute resolution process is an interesting academic argument but of no
real impact upon Idaho Power. It would appear that it may be more fruitful as far as Idaho
Power is concerned to proceed with the dispute resolution proceeding and discontinue the
workshop proceeding, but this is more of a suggestion than a position.
Very truly yours
Il;d/Attorney, Idaho Power Company
Patrick A. Harrington
Attorney, Idaho Power Company
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Parties of Record