20190718Comments on Reconsideration.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03t4
IDAHO BAR NO. 10446
RIC IIVED
t0l9 JUL 18 PH Z: I I
iliii-jC i'UFLIC
-i l i i"iT I i: S COltl't ISSION
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
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
COMMENTS ON
RECONSIDERATION
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Edward Jewell, Deputy Attorney General, submits the following comments.
BACKGROUND
On April 2,2019, the Commission ordered Atlanta Power Company ("Atlanta Power" or
"Company") to file past due statements of operating revenues, pay past due fees and interest, and
fined the Company $12,000 for six violations of the Idaho Public Utilities Law, specifically
violations of ldaho Code $$ 6l-401, -610, -1001, and -1003. Order No. 34296.
On May 10,2019, the Commission granted reconsideration of Order No. 34296, and
suspended imposition of the $12,000 penalty as of the date the petition for reconsideration was
filed by Atlanta Power. Order No. 34334. The Commission also ordered the Company to
participate in a settlement conference with interested parties regarding the possible sale of the
Company's assets, and ordered Commission Staff to file a report within 14 days of the settlement
conference apprising the Commission on progress. 1d
)
)
)
)
)
)
ICOMMENTS JULY I8,2OI9
On May 29,2019, Atlanta Power, Staff, and the Atlanta Electrical Consumers
Cooperative ("Co-Op") participated in a settlement conference. On June 12,2079, Staff filed a
Staff Report with the Commission. Staff noted that the Company and the Co-Op had both made
good faith efforts toward reaching an agreement.
In Order No. 34334, the Commission also ordered the Company to file its statements of
gross intrastate operating revenue with the Commission, pay its past due regulatory assessments,
and provide current telephone numbers for an onsite operator and Company management. The
Company filed its statements of gross intrastate operating revenue for years 2016,2017 , and
2018, and paid its past due regulatory assessments within the timeline ordered by the
Commission. The Company stated all its customers know the onsite operator and how to contact
him.
The Commission requested comment during the reconsideration period on 1) whether the
fine was correctly imposed based on the findings of fact and conclusions of law in Order No.
34296;2) whether new facts have arisen since the Commission issued Order No. 34296 that
would make the fine no longer just and reasonable; and 3) if the fine was properly assessed and
continues to be just and reasonable, should the Commission make the full fine payable to the
state treasury to the credit of the general fund under Idaho Code $ 6l-712 or should the
Commission seek to compromise the penalty under ldaho Code $ 6l-7128? Order No. 34365
at 2. Staff now responds to the questions posed by the Commission.
STAFF ANALYSIS
Staff makes its comments based on the underlying facts that led to the fine imposed in
Order No. 34296, and subsequent interactions with the Company. It is Staff s belief that a sale
of Atlanta Power's assets to the Co-Op is in the best interest of the customers of Atlanta Power.
Staff believes that a mutually agreed upon sale would likely result in safer and more adequate
service to customers, and greater accountability. Staffhas participated in settlement conferences
between the Company and the Co-Op and has made efforts to facilitate a transaction. It is Stafls
understanding that the parties have an agreement in principle and will be entering a
Memorandum of Understanding shortly, with a full contract to follow, which will be submitted
to the Commission for approval or denial pursuant to ldaho Code $ 6l-328. Given the likely but
uncertain success of negotiations for the sale of the Company's assets, Staff believes imposing
COMMENTS JULY I8,20192
the fine would add further uncertainty and may disrupt negotiations at a critical time. Further,
Staff believes the underlying causes of the penalty would be addressed through a sale of the
Company's assets to new owners, and therefore the intent of the Commission in Order No.
34296 would be achieved without collecting the fine.
1) Was the fine correctly imposed based on the findings of fact and conclusions of
law in Order No.34296?
Yes. The Commission found the Company was in violation of numerous statutory
administrative requirements, including: 1) repeated failures to comply with Commission
requests, directives, orders, and summonses and failure to respond to inquiries from Commission
Staff under ldaho Code $$ 6l-401, -406;2) refusing to allow Commission Staff to examine and
audit the Company's documents under ldaho Code $ 6l-602, -603, and -610; and 3) the
Company's failure to file annual verified returns showing gross operating revenues in 2017 and
201 8 under ldaho Code 6l-1001 and - 1003. Staff continues to believe that the facts support the
Commission's findings and the law was correctly applied.
Staff notes there is still an outstanding complaint against the Company for failure to
provide safe and adequate service, and the fined amount does not include penalties for potential
violations related to the adequacy and safety of the Company's electrical system. Staff believes
additional penalties for failure to provide adequate and safe service could be determined in a
subsequent proceeding, if the parties are unable to reach mutually agreeable terms for the
transfer of the Company's assets.
2) Have new facts arisen since the Commission issued Order No. 34296 that would
make the fine no longer just and reasonable?
Yes. Staff believes that a deal to transfer the Company's assets is likely, and that a
transfer of the Company's assets to new ownership is the most effective means to resolve the
deficiencies that led to the fine being imposed in Order No. 34296. Therefore, Staff recommends
the Commission find that the fine is no longer just and reasonable.
1JCOMMENTS JULY 18,2019
3) If the fine was properly assessed and continues to be just and reasonable, should
the Commission make the full fine payable to the state treasury to the credit of
the general fund, or should the Commission compromise the penalty?
If the Commission determines the fine was properly assessed and continues to be just and
reasonable, Staff recommends the Commission require the Company to place the fined amount in
a reserve account to be used by the potential new owners to repair the system. Staff believes the
system requires significant investment in order to function safely and adequately. See STAFF
REPORT Case No. ATL-E-I8-01, December 28, 2018. Therefore, Staff believes another
suitable option would be to require the current owners to make investments in the system equal
to the fined amount. However, Staff believes it would be difficult to verify the improvements
were made given the history of non-compliance with reporting requirements demonstrated by the
Company. Due to the need for investments to the system, Staff believes that payment of the fine
to the state treasury is not the best option in this situation.
STAFF RECOMMENDATION
Staff recommends the Commission not impose the fine in order to avoid disruption to the
final stages of negotiation for the transfer of Atlanta Power's assets to the Atlanta Electrical
Consumer's Co-Op. Staff believes the deficiencies that led to the fine being imposed would be
resolved through a sale of the Company's assets. However, if the Commission does decide to
impose the fine, Staff recommends the Commission require Atlanta Power to set the money aside
in a reserve account to be used for necessary improvements to the system.
t6t*Respectfully submitted this day of July 2019
E> 'lrr*tlffi
Deputy Attofe"J General
i:umisc/comments/atlel 8. lej comments on reconsideration
COMMENTS 4 JULY 18,2019
CBRTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ISTH DAY OF JULY 2019,
SERVED THE FOREGOING COMMENTS ON RECONSIDERATION, N CASE NO.
ATL-E-18-01, BY E-MAILING AND MAILING A COPY THEREOF, POSTAGE
PREPAID, TO THE FOLLOWING:
ISRAEL RAY
ATLANTA POWER COMPANY
1I140 CHICKEN DINNER RD
CALDWELL ID 83607
ISRAEL RAY
ATLANTA POWER COMPANY
1275 DOLPHIN WAY
FAIRBANKS AK 99709
ELECTRONIC SERVICE ONLY
ATLANTA WATER ASSOC INC
theamyobrienr, g) grnai 1.coni
dvance. arrva(r gmai I . com
ri ckandev ),j enkin s (gr) grnai l. c om
ipdeb,, rtci.net
STEVEN J MEADE
ATLANTA WATER ASSOC INC
PO BOX 1097
BOISE ID 83701
E-MAIL: smcade(/i)idalarv.com
ELECTRONIC SERVICE ONLY
ATLANTA LANDOWNER'S ASSOC
bvsreyl ock (iirvi ld bl ue. net
STEVEN J MEADE
ATLANTA LANDOWNER'S ASSOC
PO BOX 1097
BOISE ID 8370I
E-MAIL: smeade(@idalar.v.com
andy. epperson(@ gmail.corn
ltattr@boi seinfi I l. corn
j gi ll es(g.cabl eone. net
ELECTRONIC SERVICE ONLY
ATLANTA LAND OWNER
steve (r=i o urnpk i nc reekranch. c o m
ELECTRONIC SERVICE ONLY
ATLANTA ELECTRAL CONSUMER
CO-OP INC
PD[' D247(iitl"ahoo. corn
lo .con1
gre gor.v-hah n(.0 gm ai l. c orn
i [e-mail]
.I
YSECRETAR
CERTIFICATE OF SERVICE