20070917_2051.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:MARILYN PARKER AND BEVERLY BARKER
DATE:SEPTEMBER 14, 2007
RE:FORMAL COMPLAINT FILED BY SOUTH ELMORE
IRRIGATION DISTRICT
On August 21 , 2007, the Commission received a "formal" complaint (attached) from
Peter Richardson, attorney for South Elmore Irrigation Company, against Idaho Power
Company. South Elmore Irrigation Company ("South Elmore" or "customer ) disputes a
rebilling in the amount of$916 702.24 for energy usage. Due to an Idaho Power employee
error, the customer was billed for one-half of the energy consumed from November 18, 2002 to
April 26, 2007 (53 months). Idaho Power rebilled for usage only during the most recent 36
months.
BACKGROUND
The South Elmore Irrigation Company did not file an informal complaint with the
Commission prior to filing its "formal" complaint. Consistent with the Commission s standard
procedure, the Consumer Assistance Staff contacted Idaho Power to informally investigate the
rebilling of this customer. Idaho Power acknowledged that there had been a billing error with
regard to usage at South Elmore s Flying H pump station. That pump station is 1 of 18 service
points included on a summary bilL ! According to Idaho Power, a load profile meter was
Summary billing allows customers who have multiple meters and/or service locations to consolidate charges onto
one billing statement each month. Billing detail is provided for each service point and a total amount owing
identified.
DECISION MEMORANDUM - 1 -SEPTEMBER 14, 2007
replaced with a regular meter at the conclusion of a load profile study. Shortly after the meter
change, a meter technician changed the billing constant from 12 000 to 6 000 in error. The error
was discovered during an Idaho Power meter inspection in May 2007. The customer was
correctly billed for usage prior to December 2002. Following identification of the error, the
customer was correctly billed starting in May 2007.
In response to Staff s investigation, Idaho Power offered to allow the customer a longer
period of time in which to repay the rebilled amount. Idaho Power rebilled for usage over a
36-month period, which means the customer can take 36 months to pay the rebilled amount
pursuant to UCRR 204.01. Given the substantial rebilling amount and the possibility that
payment might cause a financial hardship for the customer, Idaho Power offered to allow South
Elmore the opportunity to pay over a period of at least 4 years. The Company was unwilling to
reduce or forgive the rebilled amount.
STAFF RECOMMENDATION
Staff was unable to resolve this complaint informally and South Elmore wishes to pursue
its formal complaint. See Rules 23 , 25 and 54, IDAP A 31.01.01.023
, .
024 and .054. Staff
recommends that the Commission issue a summons to Idaho Power and direct the Company to
file a response to the complaint.
COMMISSION DECISION
Does the Commission wish to issue a Summons to Idaho Power, directing an Answer be
filed?
i:udmemos/South Elmore Irrigation.doc
DECISION MEMORANDUM - 2 -SEPTEMBER 14, 2007
B'-1l((J Q)Nr &Q!iJr.E~\Ri:Y; PLLC
ATTORNEYS AT LAW RECEIVED
Peter Richardson
Tel: [phone] Fax: [phone] mill WG 2 I \.r 21
peterli!'richardsonandoleary.com
. ... ." ,
, ,...,' !n; 11":O. Box 7218 BoISe, ID 83707 - 515 N. 27th St. BoISe, JD ~3Z92.' t_;~;':;t~'
UTiUflES COMM1~h)j n
21 August 2007
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
POBox 83720
Boise 10 83720-0074
RE: Case No. IPC-O7.
Dear Ms. Jewell:
Enclosed please find an original and seven (7) copies of the FORMAL
COMPLAINT OF SOUTH ELMORE IRRIGATION COMPANY TO IDAHO POWER
COMPANY.
I have also enclosed an extra copy to be service-dated and returned to us for
our files. Thank you.
Sincerely,~~1\S
Administrative Assistant
end.
Peter J. Richardson
ISB No. 3195
Richardson & O'Leary PLLC
515 N. 2ih Street
O. Box 7218
Boise, Idaho 83702
Telephone: [phone] Tel
Fax: [phone] Fax
peter(q)richardsonando leary. com
Attorneys for South Elmore Irrigation Company
RECEIVED
luGl AUG 2 I P tr
lDi\i-(j F:~~~
\~:_" .
UTiUT1ES COMjVjj~~)!Or'l
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
SOUTH ELMORE IRRlGATION COMPANY
Complainant
CASE NO. IPC-07.
FORMAL COMPLAINTvs.
IDAHO POWER COMPANY
Respondent.
COMES NOW, SOUTH ELMORE IRRlGATION COMPANY, by and through its
attorneys of record, Richardson & O'Leary, arId pursuant to this Commission s Rules of
Procedure, Rule 54 IDAP A 31.01.01.054 hereby files this Fonnal Complaint against the
Respondent, the Idaho Power Company.
Communications regarding this Fonna! Complaint should be sent to:
South Elmore Irrigation ComparIY
c/o Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27th St
O. Box 7218
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(fYrichardsonando leary. com
Copies of all pleadings, production requests, production responses, Commission orders
and other documents should be provided to Peter J. Richardson as noted above and to:
. Terry Ketterling, Secretary
South Elmore Irrigation Company
O. Box 396
Mountain Home, ill 83647
(208)-599-1010
[phone] Fax
tlketCfYstarband.net
FACTUAL ALLEGATIONS
The Complainant, South Elmore Irrigation Company, is an Idaho Corporation in
good standing with its principle place of business in Elmore County, Idaho.
Complainant is an irrigation company that purchases electricity from Respondent
Idaho Power Company,
Terry Ketterling is the Secretary/Treasurer of the South Elmore Irrigation
Company.
Jack Post is the President of the South Elmore Irrigation Company.
On or about June 11 2007, Quentin Nesbitt, with Idaho Power Company, sent
Mr. Ketterling and Mr. Post a letter advising that Idaho Power Company had discovered a billing
error regarding metered energy and associated charges for the electricity consumed by South
Elmore Irrigation Company between November 2002 and April 2007 for the South Irrigation
Pump Location 05S07E2801- 8 800 Horsepower at Flying H substation.
Among other things, Idaho Power Company s letter, referenced above, stated:
FORMAL COMPLAINT
That the billing error had been discovered during a routine inspection at
the meter site on 5/16/07;
That the billing error was Idaho Power s fault;
That the billing error resulted from an Idaho Power Company employee
mistakenly changing the meter reading multiplier for the account on Idaho Power s customer
billing system on 11/18/2002 from 12 000 to 6 000; (The employee was not identified and the
circumstances under which the employee changed the meter reading multiplier were not
explained.
That, as a result of the billing error, South Elmore Irrigation Company was
billed for only half of the energy it consumed at the referenced site from 11/18/02 to 04/26/07;
That according to its tariffs and Idaho Public Utilities Commission rules
Idaho Power is required to prepare a corrected billing;
That the corrected billings are to be for the time period in which the error
occurred, but for no more than three years;
And that South Elmore Irrigation Company owes Idaho Power Company
$916 702.24 for energy use that was not billed between the three-year period 5/26/04 through
4/26/07.
A copy of the above-referenced letter is attached hereto as Exhibit A
I Although Idaho Power s letter is addressed to the South Elmore Canal Company, as are all bills
received, the correct name is the South Elmore Irrigation Company.
FORMAL COMPLAINT
Complainant timely and fully paid all bills received from Idaho Power Company during
the relevant period of time.
Prior to receiving the above-referenced letter from Idaho Power Company, Complainant
did not know that the billings were erroneous and had no reason to know that the billings were
erroneous.
10.The Idaho Public Utilities Commission has jurisdiction over this matter.
11.The Idaho Public Utilities Commission has approved rules and regulations governing
electric utilities' billing practices and procedures.
COUNT ONE
12.IDAP A 31.21.01.204 provides in relevant part: "(w)henever the billing for utility
service was not accurately determined because the meter malfunctions or failed, bills were
estimated, or bills were inaccurately prepared, the utility shall prepare a corrected billing. If the
utility has failed to bill a customer for service, the utility shall prepare a bill for the period during
which no bill was provided.
13.Because the reason for the erroneous billing was that Idaho Power had wrongly
changed the reading meter multiplier, and not that the meter failed or malfunctioned, Idaho
Power lacks authority to bill the Complainant for the undercharges referenced in its letter.
COUNT TWO
FORMAL COMPLAINT
14.The jurisdiction of the Idaho Public Utilities Commission is limited and has to be
found entirely within the enabling statutes.
15.Administrative regulations cannot exceed the bounds of authority granted to it by
the legislature. Thus, Idaho Power s billing authority is limited via statute and its authority
cannot exceed the bounds of the statute.
16.As a regulated electric utility subject to this Commission s jurisdiction, Idaho
Power must charge only such rates and charges as are authorized by the Commission.
17.Idaho Code Section 61-642 does not allow Idaho Power to back bill Complainant
for three (3) years as Idaho Power asserts in its letter to Complainant.
COUNT THREE
18.Principles of equity apply in administrative proceedings.
19.A customer of an electrIc utility should be able to expect that the utility will
accurately measure and bill the customer for its electric usage.
20.An electric utility should not be protected from the consequences of its own
negligence.
21.It is unjust to require an innocent consumer to bear the entire cost of a supplier
mistake because, armed with absolute immunity for a three year period, the supplier has little
incentive to establish reasonable procedures to guarantee that its meters are properly calibrated
or that its bills are computed accurately.
RIGHT TO AMEND
FORMAL COMPLAINT
Complainant reserves the right to amend this FoTInal Complaint in any respect as motion
practice and discovery proceeds in this matter.
WHEREFORE, Complainant respectfully requests the following relief:
This Commission enter an Order determining the following:
1. That Complainant will suffer extraordinary hardship if it is required to pay the
amount demanded by Idaho Power Company;
2. That the erroneous billing giving rise to this matter was solely the fault ofIdaho
Power Company;
3. That Idaho Power Company has no basis to demand that Complainant pay the
undercharges referenced in its letter;
4. That Complainant is relieved from its obligation, if any it has, to pay the under
charges referenced in Respondent's letter;
5. That, in order to further the public policy that a utility be encouraged to establish
procedures to ensure that its meters are properly calibrated, Idaho Power be
prohibited from recouping the amount it failed to bill Complainant from its other
ratepayers;
6. That, to the extent authorized by law, Complainant be awarded its reasonable
attorneys' fees and costs; and
7. For such other and further relief as the Commission considers just and equitable.
FORMAL COMPLAINT
DATED this ?-I day of August 2007.
Richardson & O'Leary, LLP
By rDJ .AD,
Peter J. Richardson
RICHARDSON & O'LEARY
Attorneys for South Elmore Irrigation Company
FORMAL COMPLAINT
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the OlIs-rday of August, 2007, a true and correct copy of
the within and foregoing FORMAL COMPLAINT, was served by personal service to:
Barton Kline
Monica Moen
Idaho Power Company
PO Box 70
Boise, Idaho 83707-0070
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, Idaho 83702
gw.. Cuf\
Nllla urtlS
Administrative Assistant
FORMAL COMPLAINT
EXHIBIT A
FORMAL COMPLAINT - SOUTH ELMORE IRRIGATION COMPANY
An lDACDRP Company
June 11, 2007
South Elmore Canal Company
Terry Ketterling & Jack Post
PO Box 396
Mountain Home, ill 83647
Dear Terry & Jack
This letter is in regards to your metered energy and associated charges for the electricity that was
consumed between November 2002 and April 2007 for South Elmore Pump Location
OSS07E2801 -- 8,800 Horsepower at Flying H substation.
We have discovered a billing error during this period for the energy consumed at this service
point. This billing error resulted from an employee mistakenly changing the meter reading
multiplier for the account on our customer billing system. The meter reading multiplier was
changed on 11/18/2002 from 12 000 to 6 000. The error was discovered during a routine
inspection at the meter site on 05/16/07 and the customer billing system has been corrected. As a
result of the error you were billed for only half of the energy consumed at the site from
11/18/2002 to 04/26/2007.
According to our tariffs and Idaho Public Utilities Commission rules we are required to prepare
corrected billings in these types of instances. The corrected billings are to be for the time period
during which the error occurred but for no more than three years. Therefore, the total dollar
amount of the rebilling for energy use that was not billed between the three-year period
OS/26/2004 through 04/26/2007 is $916 702.24. If all of the billings over the four-year period
during which the error occurred had been corrected, the total dollar amount of the rebilling
would have been approximately $1 344 000.
We realize $916,702.24 is a very large sum of money and we are willing to work with you on a
repayment plan. Also, we realize this error has affected your kWh and Property Tax credits
which are issued each December. Your credits this December will include the incremental usage
amounts associated with this rebilling. In addition irrigation customers receive a BOIll1eville
Power Adminstration credit at the end of each year. Because this credit caps out at 222 000
k Whs each month, South Elmore s usage in each of the affected months is well above this
number. Therefore, the credit amount is not affected by the corrected kWh data.
This error was Idaho Power s fault and we apologize for having incoITect1y billed your account.
However, the energy was used and we must bill you for it according to our tariffs. If you have
'~I.t !~ (fill
O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 B3702
Au~20 07 04:21p TLK Dair~ Inc 208 587 5930 p. 1
Page 2 of 2 4/712007)
any additional questions or concerns regarding this matter, plea.."oe feel free to contact me at 388-
2519 or e-mail me at qnesbitt(Q)idahopower.com or contact Lisa Nordstrom in our legal
department at [phone].
Sincerely,
/\ '"
I, A-, r)7~Quentin Nesbitt
cc: Lisa Nordstrom
Tim Fenwick
S am Turner