20181116Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
DATE: NOVEMBER 16,2018
SUBJECT: IN THE MATTER OF THE INVESTIGATION OF ATLANTA POWER
COMPANY SERVICE AND CUSTOMER RELATIONS;
CASE NO. ATL-E.18-01
On February 20,2018, the Commission opened an investigation into Atlanta Power
Company. Staff has made efforts to conduct an investigation, but has been hampered by the
Company's refusal to respond to Staff inquiries, and comply with Commission order.
Furthermore, over the last two years, the Company has failed to comply with Idaho
Code $$ 6l-1001-03 by failing to file annual returns of gross operating revenues for 2017 and
2018. The Company has also failed to pay its annual fees for 2017 and 2018.
STAFF RECOMMENDATION
Staff recommends that the Commission issue the attached proposed Order to show
cause why the Company should not be required to comply with Commission Order, respond to
Staff discovery requests, immediately file retums, pay all outstanding fees, and pay penalties. The
proposed Order further directs the attomey of the Commission to commence an action in District
Court should the Company fail to show such cause.
COMMISSION DECISION
Does the Commission wish to issue the attached proposed Order?
Karpen
DECISION MEMORANDUM
I \LegaI\ELECTRIC\ATL-E- I 8-0 I \lVemos\ATLE I 80 I _OSC,bk.docx
Deputy Attorney General
I
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF ATLANTA POWER COMPANY
SERVICE AND CUSTOMER RELATIONS
CASE NO. ATL.E.I8.Ol
ORDER NO.
(NOTICE Or HEARING &
ORDER TO SHOW CAUSE)
In the spring of 2017, Commission Staff received informal complaints from residents of
Atlanta, Idaho, relating to electric service being provided by Atlanta Power Company. The
customers stated that the Company's hydroelectric turbine was no longer working and the
Company was using its diesel generator to provide electric service. It was reported that the
generator was regularly running out of fuel and electric service outages were occurring frequently
for significant periods of time. Staff received several complaints throughout 2077 aboutinadequate
service and outages. Further, customers reported that they were unable to contact anyone from the
Company.
On January 2,2018, Atlanta Power customer Mary Drake filed a Formal Complaint against
Atlanta Power Company claiming the Company is violating Commission Order No. 31086 and
Idaho Code $ 6l-302 by failing to maintain adequate service. On January 22,2018, Staff requested
that the Commission direct the Company to respond to the Formal Complaint of Mary Drake, and
direct Staff to open an investigation into the Company. Staff recommended that the investigation
focus on service reliability, maintenance and operation of the Company's facilities, and customer
service. As part of its investigation, Staff would review the Company's compliance with past
orders, inspect generation and distribution facilities, confer with customers, and propound
discovery on the Company.
Atlanta Power is an "electrical corporation" as defined by Idaho Code $ 6l - 1 I 9. As such,
the Company is "public utility" subject to the jurisdiction of the Commission. Idaho Code $ 6l-
129. This matter comes before the Commission due to the Company's failure or refusal to file a
written response to the formal complaint of Mary Drake, or respond to Staff inquiries, such as
production requests and written interrogatories. See Order No. 33988 (ordering the Company to
"respond to the Formal Complaint of Mary Drake," and "respond to any inquiries" from
)
)
)
)
)
)
IORDERNO._
Commission Staff."). Staff has been entirely unable to communicate with Israel Ray, the
Company's owner and operator, during the pendency of this case.
BACKGROUND
l. Formal Complaint
On January 2,2018, Atlanta Power customer Mary Drake filed a Formal Complaint against
Atlanta Power Company claiming the Company is violating Commission Order No. 31086 and
Idaho Code $ 6I-302 by failing to maintain adequate service. Drake stated that Atlanta Power
customers experience frequent outages, and that no one from the Company is available to perform
system repairs, accept, or respond to customer concerns.
2. Informal Complaints
In the spring of 2017 , Commission Staff received a number of complaints from a residents
of Atlanta, Idaho, outlining concerns related to electric service being provided by Atlanta Power
Company. The customers stated that the Company's the hydroelectric turbine was no longer
working and the Company was using a diesel generator to provide electric service. It was reported
that the generator was regularly running out of fuel and electric service outages were occurring
frequently for significant periods of time. Staff received several complaints about throughout 2017
about inadequate service and outages, and the inability of customers to contact anyone from the
Company.
3. Staff Investigation
On January 22,2018, Staff requested that the Commission direct the Company to respond
to the Formal Complaint, and also open a formal Staff investigation into the Company to respond
to issues raised in informal complaints. Staff recommended that the investigation focus on service
reliability, maintenance and operation of the Company's facilities, and customer service. As part
of its investigation, Staff would review the Company's compliance with past orders, inspect
generation and distribution facilities, and confer with customers. The Commission approved
Staff s recommendation, and issued a summons regarding the Formal Complaint of Mary Drake,
and also ordered that the informal customer complaints be addressed as part of the Staff
investigation under the same docket. The Commission directed Staff to work with the Company
and its customers to investigate these issues, identify possible solutions and provide a report
detailing Staff's findings within six months.
2ORDER NO.
As detailed further in the Affidavit of Staff witness Johnathan Farley, the Commission
issued the Company a summons on February 27,2018, and March 8,2018, directing the Company
to respond in writing to formal complaint, and comply with the Staff investigation. See Order No.
34017 . On March 16,2018, Staff propounded 14 production requests. The Company has failed or
refused to comply with Commission order, and has failed or refused to respond to Staff production
requests. On August 7 ,2018, Staff mailed the Company notice that failing to respond may result
in further Commission action, including the imposition of fines.
4. Communications From the Company
Staff has been unable to make contact with the Company's owner and sole representative,
Israel Ray. Mr. Ray's brother, Gene Ray, has represented to Staff by telephone that he is caring
for Israel, who is experiencing some medical issues, and is managing his affairs, including issues
related to Atlanta Power. Gene has expressed that he does not want to be considered an employee
or agent of Atlanta Power, and has refused to provide any written response to Staff or the
Commission. To date, no written response or communication has been produced by Atlanta Power.
Staff is unable to complete its investigation into the Company because the Company refuses to
comply with the Commission order, respond to Staff inquiries, and
Throughout the pendency of the investigation, the Commission and its Staff have met their
statutory duties with regard to seeking information from the Company. See Farley Affidavit
(Exhibit No. l). On multiple occasions, Staff has attempted to obtain written responses to the
formal customer complaint, the Commission directed investigation, and documents that are
responsive to the Staff s informational requests. 1d. Staff provided these requests via certified mail.
Id. Nevertheless, the Company has failed or refused to comply with Commission order, meet Staff
demands that it provide written responses to the formal complaint, or respond to Staff
informational requests. 1d.
The failure to: l) comply with Commission Order; 2) provide a written response to the
formal complaint; and 3) respond to Staff informational requests are unique violations of Idaho
Code $ 6l-1003.
5. Commission Regulatory Fees
The Commission's operating funds are derived by assessing regulatory fees upon utilities
and railroads subject to the Commission's jurisdiction. Each year, the Legislature authorizes the
Commission to expend funds necessary to regulate and supervise utilities and railroads doing
JORDER NO.
business in Idaho. Idaho Code $$ 6l-1001 , et seq. The maximum assessment fee for each utility
shall not exceed one percent of its gross revenues, and the minimum fee shall be no less than $50.
rd.
Idaho Code $ 6l-1003 requires that, "[o]n or before April lst of each year, each public
utility and railroad corporation subject to the jurisdiction of the commission, shall file with the
commission a return verified by an officer or agent of the public utility or railroad corporation
involved, showing its gross operating revenues from its intrastate utility or railroad business in
Idaho for the preceding calendar year during which it carried on such intrastate utility or railroad
business."
Idaho Code $ 61-1001 requires that "[e]ach public utility ... subject to the jurisdiction of
the commission, and subject to the provisions of this act, shall pay to the commission in each year,
a special regulatory fee in such amount as the commission shall find and determine to be necessary,
together with the amount of all other fees paid or payable to the commission by each such public
utility and railroad corporation ...."
Once the assessment is determined, the Commission notifies the utility of it regulatory fee
no later than May I of each year. The regulatory fee may be paid to the Commission in equal semi-
annual installments due May 15 and November 15. Id. Any utility may object to its regulatory
fee "on or before the time specified for payment of the first installment of the assessment made
against it. Id. Idaho Code $ 6l-1004 contains the duties of the Commission with regard to the
determination of fees.
Commission staff alleges that Atlanta Power Company has failed to file its revenue
statements for calendar years 2017 and 2018. Staff further alleges that Atlanta Power Company
failed to pay it assessed fees for calendar years 2017 and 2018.
For period in question, the Commission has met its statutory duties in determining and
assessing fees. See Ashcraft Affidavit (Exhibit No. 2). On multiple occasions, Staff has attempted
to obtain the Company's verified returns and collect annual fees, sending invoices, demand letters,
and notification that failure to comply would result in legal action. 1d. Nevertheless, the Company
has failed or refused to meet Staff demands that it file annual returns and pay outstanding fees. Id.
In summary, the Company has failed to file its statutorily required annual verified return
in2017 and2018. Each failure is to file violates Idaho Code $ 6l-1003. Also, the Company has
4ORDER NO. _
failed to pay its statutorily required annual regulatory fees to the Commission in 2017 and 2018.
Id. Each failure to pay violates Idaho Code $ 6l-1003.
JURISDICTIONAL STATEMENT
Jurisdiction in this matter is founded in the Public Utilities Law, Idaho Code gg 6l-10l et
se4., including Idaho Code $ 6l-501, which vests the Commission with the authority and
jurisdiction to supervise and regulate every public utility in the state. Jurisdiction is further
founded in Idaho Code $$ 6l-701, et seq., which provides direction to the Commission relating to
enforcement, penalties, and interpretation of public utilities law.
CLAIMS
l. Count One: Yiolations of Idaho Code $ 61-401
Idaho Code $ 6l-401 states "[e]very public utility shall furnish to the commission, in such
fbnn and such detail as the commission shall prescribe, all tabulations. computations and all other
information required by it to carry into effect any of the provisions of this act and shall make
answers to the best of-their knowledge, to all questions submitted by the commission."
Atlanta Power Company has tailed or refused, on multiple occasions to comply with
Commission order and summons to "respond to the fbrmal Complaint," and "respond to any
inquiries" from Commission Staff. Order No. 33988. The summons was issued on February 21,
2018. The Company can remedy this claim by responding to the formal Complaint and all related
inquiries in writing, and satisfying any outstanding penalties.
2. Count Two: Yiolations of Idaho Code S 61-610
Idaho Code li 6l-610(1) provides that "[t]he commission. each cornmissioner and
[Commission Stafl shall have the right at any and all reasonable times to inspect the accounts.
books. papers and documents of any public utility.. .."
Atlanta Power Company has f-ailed or refused, on multiple occasions to provide to
Commission Staff with any information related to the Company, including account information,
ownership status, any and all books and papers of the Company. Discovery was first propounded
on the Company by Staff on March 16,2018. The Company can remedy this claim by responding
to Staff s discovery requests in writing, and satisfying any outstanding penalties.
3. Count Three: Violations of ldaho Code $ 61-1003
Idaho Code $ 61-1003 requires Atlanta Power Company to file annual verified returns
showing gross operating revenues from its railroad business in Idaho for the preceding calendar
5ORDER NO
year.
The Company has failed or refused to file the annual verified return in2017 and 2018 in
violation of Idaho Code $ 61-100, with each failure to file creating a distinct and unique cause of
action. The Company can remedy this claim by filing verified retums showing its gross operating
revenues for2017 and 2018, and satisfying any outstanding penalties.
4. Count Four: Violations of ldaho Code $ 6l-1001
Idaho Code $ 6l-1001 requires that Atlanta Power Company pay the Commission an
annual regulatory fee in an amount based on their annual verif,red return.
In 2017,the Company failed or refused to pay the annual regulatory fee of $50rto the
Commission in violation of Idaho Code $ 6l-1003. In 2018, the Company again failed or refused
to pay its annual regulatory fee of $50.00 in violation of Idaho Code $ 6l-1003. The Company can
remedy this claim by paying its outstanding regulatory fees, plus interest, for 2017 and 2018, and
satisfying any outstanding penalties.
.t Enforcement and Penaltiesz Idaho Code $ 701, et seq.
Chapter 7 of the Idaho Public Utilities Law relates to the enforcement of the utility code,
and penalties for violations of the code. Idaho Code $ 6l-706 states:
Any public utility which violates or fails to cornply with any provisions of the
constitution of this state or of this act, or which fails. ornits or neglects to obey,
observe or comply with any order, decision, decree, rule, direction, demand or
requirement or any part or provision thereof, of the commission, under the
provisions of this act, in a case in which a penalty has not hereinbefbre been
provided fbr. such public utility is subject to a penalty of not more than $2,000 fbr
each and every oft'ense.
The Company is liable for $12,103 in fines, fees and interest, as follows:
I ) Violation of Idaho Code $ 61-401 - $2,000
2) Violation of Idaho Code $ 6l-610 - $2,000
3) Violation of Idaho Code $ 6l-1003 -2years of failingto report - $2,000 x 2: $4,000
4) Violation of Idaho Code $ 6l-1001 -2years of failing to pay - $2,000 x 2 = $4,000,
and $100 in regulatory fees, plus $3 in interest.
' The $50 amount represents the minimum assessment because Commission staff is unable to calculate an accurate
assessment amount due to the Company's failure to submit annual verified returns.
6ORDER NO
Furthermore, Idaho Code $ 6l-707 states:
Every violation of the provisions of this act or of any order, decision, decree, rule.
direction, dernand or requirement of the commission, under the provisions of this
act, or any part or portion thereot, by any public utility, corporation or person is a
separate and distinct off-ense. and in case of a continuing violation each day's
continuance thereof shall be and be deemed to be a separate and distinct oftense.
Should the Company fail to comply with this order to show cause in the manner prescribed,
it shall be liable for an independent violation of Idaho Code $ 6l-706, which carries a penalty of
52,000. Failure to comply with this order to show cause will result in a continuing violation and
will accrue a penalty of $2,000 per day until the Company satisfies the order to show cause
ORDER
Accordingly, based on the evidence before the Commission, and good cause appearing,
IT IS HEREBY ORDERED that the Utility shall appear before the Commission on
December 17,2018, to show cause why the following relief should not be granted by summary
order of the Commission:
l. Order Atlanta Power Company to immediately pay the current entire outstanding
annual fee amount of $100, and $3 in interest;
2. Order Atlanta Power Company to immediately file its statutorily required annual
verified returns for 2017 and 2018;
3. Order the imposition of civil penalties pursuant to Idaho Code $ 6l-706 of $2,000
for each and every offense, totaling $12,000.
4. Direct the attorney of the commission to initiate an action in District Court to
enforce the determination of the Commission, consistent with Idaho Code $ 61-
705 and $ 6l-1005.
ORDER NO. _7
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of November 2018.
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMIS SIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Diane M. Hanian
Commission Secretary
l:U-egal\ELECTRIC\ATL-E- I t-0 I \Orders\ATLEI 801 -OSC-bk.docx
8ORDER NO
BRANDON KARPEN, ISB No. 7956
Deputy Attorney General
State of Idaho
Public Utilities Commission
412W Washington
P.O. Box 83720
Boise, Idaho 83720-007 4
Telephone: [phone]
brandon. karpen @ puc. idaho. gov
Attorney for the Staff of the Public Utilities Commission
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF ATLANTA POWER COMPANY
SERVICE AND CUSTOMER RELATIONS
CASE NO. ATL.E-18.01
JOHNATHAN FARLEY, being duly sworn, stated:
l. My name is Johnathan Farley. I am over 21 years of age, of sound mind, and I
have personal knowledge of the facts stated herein.
2. I am a Utilities Compliance Investigator at Idaho Public Utilities Commission. I
started working in this position in June 2015. I am responsible for leading the investigation into
the service reliability, maintenance and operations, and customer relations of Atlanta Power
Company.
3. On February 21.,2018, the Commission issues, by certified mail, a summons to
Atlanta Power Company notifying it that a Complaint had been filed against the Company, that
the Commission had order a Staff investigation into service reliability, maintenance and
operations, and customer relations of the Company. The Summons directed the Company to file
a written answer or written motion in defense of the Complaint within twenty-one days. To date,
the Company has not filed a written answer or motion in response to the summons.
4. On March 8, 2018, the Commission issued, by certified mail, a second copy of the
summons to Atlanta Power Company directing the Company to file a written answer or written
motion in defense of the Complaint. Simultaneously, a summons was mailed to the Company's
only employee. To date, the Company has not filed a written answer or motion in response to the
summons.
)
)
)
)
)
)
AFFIDAVIT OF JOHNATHAN FARLEY I
Exhibit 1
AFFIDAVIT OF JOHNATHAN
FARLEY SUPPORT OF ORDER
TO SHOW CAUSE
5. On March 16, 2018, Staff propounded 14 production requests on the Company by
certified mail. To date, the Company has not filed any answers or responses to the production
requests.
6. On April 6, 2018, the Atlanta Water Association, and the Atlanta Landowner's
Association (ointly, "AWA"/ALA") intervened as parties in this case, which was granted on
April 19, 2018. Order No. 34036. On May 7,2018, AWA/ALA propounded 3 production
requests on the Company. An Atlanta Power Company employee responded to the request
reporting that the Company's owner, Israel Ray, was the only person with access to the requested
information, and otherwise denied access to the requested information. Accordingly, to date, the
Company has not filed any answers to the production requests.
7 . On August 7 ,2018, Staff mailed a Mr. Ray a letter notifying him that failing to
respond to the Commission's summons, and the production requests may cause the Company to
incur fines for failing to comply with a Commission order, and Idaho Public Utilities Law. Staff
attached a copy of the Commission summons, and the production requests to the letter. To date,
the Company has not filed a written answer or motion in response to the summons, or provided
Staff with any answer to its production requests.
Dated this i e day of November, 2018.
Johnathan Far
Utilities Compliance Investigator
Idaho Public Utilities Commission
SUBSCRIBED AND SWORN to before me this fAday of November,2018
ln t l.-,tl,ll^,,1<,n
Not*y fuUti" 6r tauno
My commission expires on t'L\zrlet i1ri
ATE
JKERI PUBLICARYNolIDAHOOFST
AFFIDAVIT OF JOHNATHAN FARLEY 2
BRANDON KARPEN, ISB No. 7956
Deputy Attorney General
State of Idaho
Public Utilities Commission
472W Washington
P.O. Box 83720
Boise, Idaho 83720-007 4
Telephone : [phone]
brandon.karpen @ puc.idaho. gov
Attorney for the Staff of the Public Utilities Commission
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF ATLANTA POWER COMPANY
SERVICE AND CUSTOMER RELATIONS
CASE NO. ATL-E.18.07
AFFIDAVIT OF NANCY
ASHCRAFT IN SUPPORT OF
ORDER TO SHOW CAUSE
NANCY ASHCRAFT, being duly sworn, stated:
1. My name is Nancy Ashcraft. I am over 21 years of age, of sound mind, and I have
personal knowledge of the facts stated herein.
2. I am a Senior Financial Specialist at Idaho Public Utilities Commission. I started
working in this position in January 20L6. I am responsible for the billing and collection of
annual fees as described rn ldaho Code $$ 61-1001 through 61-1005.
3. Atlanta Power Company failed to file an annual verified return reporting its
annual intrastate gross operating revenue for calendar years 2017 and 2018, as described by
Idaho Code $ 61-1003.
4. In May and November 2017, Atlanta Power Company failed or refused to pay an
assumed regulatory fee of $50. The amount is assumed because pursuant to ldaho Code S 6l-
1004, $50 is the minimum assessment that may be charged to a utility. This amount was billed
because Commission staff was unable to calculate an accurate regulatory assessment amount due
the Company's failure to submit an annual verified return.
5. In May and November 2018, Atlanta Power Company failed or refused to pay an
assumed annual regulatory fee of $50.00. Again, the amount is assumed because pursuant to
Idaho Code $ 6l-1004, $50 is the minimum assessment that may be charged to a utility. This
amount was billed because Commission staff was unable to calculate an accurate regulatory
assessment amount due the Company's failure to submit an annual verified return.
)
)
)
)
)
)
AFFIDAVIT OF NANCY ASHCRAFT I
Evhihit 2
6. In February 2018, Atlanta Power was assessed $3.00 in interest on its outstanding
balance of$50 (6Vo).
7. Currently, Atlanta Power Company owes the Commission $103 in fees and
interest charges.
8. On multiple occasions, Staff has attempted to obtain the Company's verified
returns and collect its past due annual fees by sending invoices, demand letters, and notification
that failure to comply would result in legal action.
Dated this \i; day of November,2018.
By:N Ashcraft
Financial SpecialistS
Idaho Public Utilities Commission
SUBSCRIBED AND SWORN to before me this f[ day of November, 2018.
t'-i \,, /Ylla\^,'Ylst
Notary Publit for Idaho
My commission expires on L ,)
ATE
HAWKERJ.KERI
PUBLICARYNOTIDAHOOFST
AFFIDAVIT OF NANCY ASHCRAFT 2
i/ilu,,,