20151026_4819.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KATHY STOCKTON, AUDITOR
DON HOWELL, DEPUTY ATTORNEY GENERAL
DATE: OCTOBER 21, 2015
SUBJECT: IDAHO POWER’S REQUEST TO SELL A PARCEL OF LAND TO ACHD
On October 1, 2015, Idaho Power Company notified the Commission via letter that it
intends to convey a 19,000 square-foot parcel of bare land and adjacent easements to the Ada
County Highway District (ACHD) near the corner of Franklin Road and Five Mile Road as part
of an ACHD road widening project in Boise. The property is part of a large parcel of land
owned by Idaho Power that includes a warehouse building and its Boise operations center.
The letter sought a confirmation from the Commission that Idaho Code § 61-328
would not apply to this land transfer. Section 61-328 requires that electric utilities obtain the
Commission’s approval for the sale or transfer of property in Idaho “which is used in the
generation, transmission, distribution or supply of electric power and energy to the public.” The
Company asserts that the transaction will not interfere with the delivery of electric service to
customers. The Company requests that the Commission confirm that this transfer of real
property does not require the Commission’s formal approval per Section 61-328.
The letter included copies of the survey drawings showing the location of the
property proposed for transfer. The letter also included a compensation summary prepared by an
independent appraiser detailing the payments to Idaho Power from ACHD for the land transfer.
The compensation includes:
DECISION MEMORANDUM 2
Idaho Power agreed that the proposed compensation is fair and reasonable. Letter at 1.
STAFF ANALYSIS
Staff has reviewed the proposed transaction and believes that the conveyance of this
particle of real property to ACHD will not disrupt the delivery of electric service to Idaho
Power’s customers. Because the real property in question is currently in rate base, Staff believes
that it is appropriate for the Commission to formally review this matter. The property to be
transferred is adjacent to the Company’s operations center which is directly involved in the
supply of power to the public. However, it is Staff’s view that transferring the subject property
will not affect service or cause rates to increase.
Staff believes the total amount of compensation is reasonable for the utility’s
property. Staff reviewed the information contained with the letter – the drawing and
compensation study – as well as visiting the property. In addition, Staff reviewed the appraisal
and the book value of the property. Staff also notes that the transfer avoids having ACHD seek
condemnation, forcing Idaho Power to incur more costs.
In past cases involving the sale of buildings and real property, Staff has determined
that such transactions would not be subject to Idaho Code § 61-328. However, because the
subject property is currently in rate base, Staff believes it is appropriate for the Commission to
formally review this matter at a decision meeting. Section 61-328 provides that “any property
located in this state which is used in the generation, transmission, distribution or supply of
electric power [may not be transferred] directly or indirectly, in any manner whatsoever, . . .
except when authorized to do so by order of the public utilities commission.”
STAFF RECOMMENDATION
Staff recommends approval of the transfer. Idaho Power should be required to file
final accounting entries with the Commission when the transaction is completed and the new
improvements are installed. Staff recommends that the Commission find this transaction: (1) is
consistent with the public interest; (2) will not cause rates to increase by reason of the
transaction; and (3) is not subject to Idaho Code § 62-328. Finally, Staff recommends that it
instruct Staff counsel to advise the utility in a letter that the proposed transaction does not require
a Commission hearing under Idaho Code § 61-328.
COMMISSION DECISION
1. Does the Commission agree that the transfer of this property is in the public
interest and will not cause rates to increase?
2. Does the Commission instruct Staff counsel to send a letter to the Company
confirming that Idaho Code§ 61-328 does not require a hearing in the subject transaction?
3. Does the Commission also want to include in any letter that the Company is
required to file final accounting entries with the Commission when the transaction and
construction has been completed?
Don Howell
Deputy Attorney General
bls/M:ldaho Power Property_2015_db
DECISION MEMORANDUM 3
PATRICK A. HARRINGTON
Corporate Secretary
[e-mail]
September 28, 2015
Donald L. Howell
Z015 ®T .1 1 ·AH 8: 25
Lead Deputy Attorney General
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-007 4
Re: Idaho Power Company Land Conveyance
Dear Mr. Howell:
H •DAHD -.,.POWER.
An IDACORP company
Idaho Power Company ("Idaho Power" or "Company") plans to sell certain lands
and easements to the Ada County Highway District ("ACHD") for ACHD's Franklin
Road-Five Mile Road intersection improvement project ("Project'1 in Boise. ACHD and
Idaho Power previously entered into a Right-of-Entry Agreement ("ROE Agreement") for
the Project, which recognizes ACHD's right of condemnation and authorizes ACHD to
enter the Company's property for construction of the Project. ACHD has substantially
completed the Project, and Idaho Power and ACHD have identified the lands and
easements to be conveyed by Idaho Power to ACHD for the Project, along with the
proposed compensation levels for the lands and easements, and for the related
"Improvements" and "Cost to Cure Items" associated with the Project, as discussed
below.
The Idaho Power property sale to ACHD would include the conveyance of fee
lands (18,994 square feet), a permanent slope easement (9,778 square feet), a wall
maintenance easement (1,987 square feet), and a temporary construction easement
(7,710 square feet), all as depicted on the drawing attached hereto as Exhibit A
(collectively, the "Property''). The Property is located at the northwest comer of the
Franklin Road-Five Mile Road intersection, and is part of Idaho Power's larger 53.43-
acre parcel which includes the Company's Boise Operations Center building and
Mechanical & Engineering building and related facilities (the "BOC Property"), also as
depicted on Exhibit A
Attached as Exhibit B is a copy of the ACHD Compensation Summary, which
provides for $230,366.49 in total compensation to Idaho Power for the Project. The fee
land and easement valuations are based on an appraised value of $3.25 per square
foot for the Property, pursuant to an independent appraisal conducted for ACHD by
Hugh T. Pomtier, Certified Appraiser CGA-420, working for Robert C. Williams, MAI,
Real Estate Appraising & Consulting. Idaho Power has reviewed the appraisal and has
determined that it provides a fair valuation for each of the Fee Acquisition ($46,033.00 +
$7,848.75), Permanent Slope Easement ($23,833.88), Wall Maintenance Easement
($4,843.31), and Temporary Construction Easement ($2,505.75).
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, ID 83702
Idaho Public Utilities Commission
September 28, 2015
Page2
The Compensation Summary also provides for additional compensation to Idaho
Power for "Improvements" and "Cost to Cure Items" in connection with the Project. The
"Improvements" include landscaping additions on the Property and the BOC Property,
and the "Cost to Cure Items" include fencing and materials relocation, to accommodate
the new boundary between the BOC Property and the expanded road right-of-way.
Idaho Power has worked closely with ACHD regarding the "Improvements" and "Cost to
Cure Items", including the installation of a retaining wall along the east side of the BOC
Property adjacent to Five Mile Road, to limit the encroachment of the slope easement
on the BOC Property. Idaho Power believes that all appropriate steps have been taken
to minimize the impact of the Project on the BOC Property, and that the valuations
included for the "Improvements" and "Cost to Cure Items" on the Compensation
Summary are fair and reasonable.
Idaho Code § 61-328 requires that electric public utilities in Idaho obtain Idaho
Public Utilities Commission approval for the sale or transfer of property in Idaho "which
is used in the generation, transmission, distribution or supply of electric power and
energy to the public." Idaho Power does not believe that§ 61-328 is applicable to the
Company's proposed conveyance of the Property to ACHD. Idaho Power has
coordinated with ACHD to assure that the Project does not materially interfere with
Idaho Power's operations at the BOC Property, and the sale of the Property will not
impact Idaho Power's utility operations.
Finally, it is important to note that ACHD has the right of eminent domain and
could condemn the Property for the Project if needed. Such an action would likely result
in significant legal costs to Idaho Power and could also result in lower compensation
paid by ACHD than currently offered under the Compensation Summary.
If you agree with Idaho Power's assessment that the proposed conveyance of
the Property to ACHD as described above would not require Commission approval
under § 61-328, please provide confirmation to my attention at the address above.
Idaho Power will file final accounting entries with the Commission for the conveyance of
the Property to ACHD when the transaction is completed.
Sincerely, "
Patrick A. Harrington
Enclosures
cc: Terri Carlock, IPUC
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EXHIBIT "A"
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PROPERTY ACQUIRED:
1. PMCl!IJI A Alm I caMPRllll! lll.911ACRl!ll, CONllE'IED BY SPECIAL WARiWITY mm, INllT. lllll. 11flMl1 .. RECORDED 111114121111,
G11A111011: UNI! IRllRI AllllOCIATEI, LP 8&I! PABI! 1 FOR Dl!TAIUI ON
"A"T AND~ PARCEL
2. PARCEL 'O' caMPRl8Ell D.DACREll, CONVEYED BY WARRAN1Y
DEED, INIT. ND.-. Rl!CORDl!D D71111/t ... GIWITORll: W.
ROIERTllCllllDIEV AND FRANCllll MCBIRIEY, HUllllAND AND Wll'I!.
AIEWIWAM ROBl!RT llC8IRNEY JR.. 8EEALllO, THI! FaLLaNNG WARIWITY DlllD8: 111CM1111, 111117111, 1117111AllD 11 .......
TDTAL D&l!D ACQUIRl!DACRE(ll)o !!Ml
PROPERIY DISPOSED:
1. D1!!D .. Mvma Of ADA mlllflY 111811WAYDIS1llCl', llGllTCF WAY
18,!l!MIQ.Fr. IBT • ..,. • ...,.,.
TOTAL PlilDPERTT llllPCllW.ACAE(B)a Ml!!.
MEW CUllmlT ACRl!ll l!l'Fl!C11VE tll/_.12111 .. a ..
ACHD FIVE MILE ROAD WIDENING PROJECT
PROPOSED ROW EXACTION AND EASEMENTS
- - - -1l!llPORM¥ CONllTRIJOTION EAllEllEllT AREA 7,710 IQ. FT.
-. -•• -PRCPER'IYLIE
- - - - - ---Et. ElllllTDl6 II.OPE EAlilD&IT ..... IQ. FT. lllT. lllD.1271'11111112/t-(l'N8 AREA IS INCLUDED
II THI! PRDP08llD ROW l!XACTIOll (IEE 1iE1DWJ.
Ni-... C 1 S C J &10. PROP011ED lit.OPE EASEMENT 1.m IQ. FT.
••••••• Et1. PRDPOliED WALL MAINTENANCE liAllElllENT 1,11118Q. FT.
I DI . ....a8EDRIGHTOFWAY 18,IMSQ. l'T.
ACHD PROJECT TOTAL •ACT TO IDAHO POWER PROPERTY:
ACHD ROW EIACTIClll i1.-IQ. FT.
M:ltD tll!WPl!RIWmn' 11.DPE l!AlllMEllf. I.Ml 8Q. FT.
M:ltD MEW tETo\1111111 M.LllADITEllMCE MllElllDIT-1,1111 IQ. PT.
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EXHIBIT "B"
Project Name: Five Mlle-Franklin to Fairview
Project No: 702041
Name: Idaho Power Company
R/W Parcel No: 1
T3N, R1E, Sec 10
APN: 81110449504
COMPENSATION SUMMARY
Fee Acquisition:
14,164 sf@$3.25 per sf
Fee Acquisition:
4,830 sf @ $3.25 per sf x 50%
Permanent Slope Easement:
9,778 sf@ $3.25 per sf x 75%
Wall Maintenance Easement:
1.987 s.f. @ $3.25 per sf x 75%
Temporarv Construction Easement:
Improvements:
Cost to Cure Items:
71710 sf@ $3.25 per sf x 10%
Earth Work: 399 cy @ $35 per cy
Evergreen Trees: 3 @ $1 1500 each
Plants (Carpet Rose, Fountain Grass)
Turf Grass: 8,000 sf @ $1.65 per sf
Railroad Ties: 140 @ $8.00 per railroad tie
Landscaping Curb: 350 If @ $2.50 per If
Asphalt Paving: 2,600 sf @ $3.00 per sf
Gravel Mulch & Weed Barrier
Grass Seeding
Irrigation System
Fencing (Relocation and Temporary): 650 If
Fencing (Permanent): 650 If
Electric Sign at Entry
Sign Electrical Installation Work
Relocate 2 Solar Lights: 2 @ $100 each
Relocate Material and Inventory (Based on Owners Bid)
Labor and Vehicle Costs
Fencing Adjustments at Retaining Wall (Relocation)
Temporary Irrigation
Main Line Irrigation Repair
$46,033.00
$ 7,848.75
$23,833.88
$ 4,843.31
$ 2,505.75
$ 13,965.00
$ 4,500.00
$ 8,500.00
$ 13,200.00
$ 1, 120.00
$ 875.00
$ 7,800.00
$ 10,500.00
$ 2,500.00
$ 10,390.00
$ 17,000.00
$ 25,850.00
$ 5,066.80
$ 2,250.00
$ 200.00
$ 8,600.00
$ 5,250.00
$ 3,380.00
$ 2,285.00
$ 2,070.00
Total Compensation .................................................................................... $230.366.49