20221014Application.pdf

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i,,, I illi il+ PI{ ?r 39Peter J. Richardson ISB # 3195
RICHARDSON ADAMS, PLLC
515 N. 27th Street
Boise,Idaho 83702
Telephone: [phone]
peter@richardsonadams. com
Attomeys for Greylock Energy Holdings, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
GREYLOCK ENERGY HOLDINGS, LLC FOR
APPROVAL OF ITS STOCK AND OWNERSHIP
INTERESTS PURCHASE AGREEMENT WITH
ISRAEL RAY FOR THE ACQUISITION OF THE
ATLANTA POWER COMPANY
CASE NO. *TL- L. \KO A
APPLICATION OF GREYLOCK ENERGY
HOLDINCS, LLC
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Creylock Energy Holdings, LLC ("Greylock" or "Applicant"), pursuant to the provisions
of ldaho Code Section 6l-328, hereby makes application to the Idaho Public Utilities
Commission ("Commission") for approval of the Stock and Ownership Interests Purchase
Agreement ("Agreement") between it and lsrael Ray as the majority, (and only known)
shareowner in the Atlanta Power Company (the "Utility" or the "Company"). The Agreement,
attached hereto as Exhibit A, provides for Greylock to purchase all of the assets of the Atlanta
Power Company including its certificate of public convenience and necessity for the provision of
electric service to the approximately seventy-five (75) individual customers in and around the
community of Atlanta, Idaho.
L Legal Standard
Idaho Code Section 6l-328 govems the sale/transfer of electric utility property in the
State of ldaho. That Section endows the Commission with the authority to authorize a proposed
Greylock Energy Holdings' Application
Page I
sale/transfer; (a) as requested, (b) refuse to authorize the same or (c) to authorize the same with
respect to only part of the property involved. In order to authorize the sale or transfer, the
Commission must make the following findings:
(a) That the transaction is consistent with the public interest.
(b) That the cost of and rates for service will not be increased by reason of
such transaction.
and;
(c) That the applicant has the bonaJide intent and financial ability to operate
and maintain the subject property in the public interest.
Greylock asserts the proposed hansaction is consistent with the public interest and that it
has both the financial and technical ability as well as the bonafide intent to operate and maintain
the subject property in the public interest as is explained more fully below.
Upon acquisition of the Utility, Greylock will have, and will be able to maintain, the
financial ability to operate the Utility consistent with good utility practices and this
Commission's orders. Greylock does not propose any rate increase by reason of this transaction
as its owners have personally assumed financial responsibility for all transaction costs associated
with Greylock's acquisition of the Atlanta Power Company. Of course, Greylock's bonafide
intention (a.k.a. goodfaith intention) has already been amply demonstrated by the investments in
time, money and energy its owners have financed (with no expected retum) to maintain and
operate the Utility to date, and also by the time, money and energy to bring this thoughtful and
realistic ownership plan/application before the Commission for its consideration.
II. Atlanta Power Company
Atlanta Power Company is an investor*owned electric utility serving approximately 75
customers (many of whom are only part-time residents) in the State of tdaho and is subject to the
Greylock Energy Holdings' Application
Page2
regulatory jurisdiction of the Commission. The Company's certificated service territory
encompasses the community of Atlanta, Idaho and its immediately surrounding environs.
[I1. Greylock Energy Holdings, LLC - Personnel Qualifications
Greylock is an Idaho limited liability company formed for the purpose of acquiring,
owning and operating the Atlanta Power Company. Greylock has just two owners each with a
fifty percent ownership interest who share management duties and both of whom are co-
managers. Both the owners of Greylock have significant, relevant and extensive experience
running and operating electric utilities. Nick Jones and Gene Haught are the owner/managers.
Both Mr. Jones and Mr. Haught are property owners in Atlanta, and both are customers of
Atlanta Power Company. Mr. Haught and Mr. Jones are currently, and plan to continue to, share
equally the responsibility for the operation, maintenance and ongoing viability of the Atlanta
Power Company.
Mr. Haught is a permanent year-round Atlanta resident. He is the Operations Manager of
the Atlanta Power Company and he is also the Fire Chief for the Atlanta Rural Fire District. Mr.
Jones maintains an Atlanta residence and a second residence in the Boise area where he is also
employed as an instructor at the Northwest Lineman College.l
IV. Demonstrated Ability to Operate and Maintain the Atlanta Power Company
For the past several years, Mr. Haught and Mr. Jones have been on the ground in Atlanta
operating, maintaining and servicing the Atlanta Power Company's facilities thereby making
possible the delivery of electric services to its ratepayers. Approval of this Application will
memorialize that fact in the form of a simple transfer of ownership rights from Mr. lsrael Ray.
I The Northwest Lineman College is a nationally recognized and accredited college that prepares its students for
careersi, inter alia, as electric utility linemen.
Greylock Energy Holdings' Application
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ln addition, Mr. Jones and Mr. Haught are acutely aware of the Utility's responsibility to
maintain current and appropriate books and accounting procedures as well as to comply with all
of the Commission's reporting and ratemaking requirements.
Mr. Jones uses his electric lineman skills to assist Mr. Haught in the current operations
and maintenance of the Utility. Both Mr. Jones and Mr. Haught are currently (and have
historically) provided basic and essential serviccs to thc Atlanta Power Company. Beginning
approximately five years ago Mr. Haught began his employment with the Atlanta Power
Company as its Operations Manager. As such he assists in maintenance of the power grid and
hydroelectric operations. As a local full-time and year-round resident, he effectively deals with
customer relations, powor outages and near-term system planning. Among other duties, Mr.
Haught supervises bookkeeping and billing functions, and he also personally provides
maintenance, safety, customer relations contacts and emergency contact services for the Utility.
Mr. Haught is also the Fire Chief of the Atlanta Rural Fire District. Mr. Jones is a part-time
resident who is also a full+ime instructor at the Westem Idaho Lineman College in Boise. As
such, he is fully qualified, trained and current on all issues related to the day-to-day operation
and maintenance of electric utility distribution systems such as the Atlanta Power Company's
system. He currently provides line and general system maintenance services as well as
supervises long-term utility planning activities.
Mr. Ray is the current owner of the Atlanta Power Company and to the best of
Greylock's knowledge is the sole beneficial owner. Atlanta Power Company seeks to sell its
assets to Greylock, which has proved to be "an entity that will provide safe and reliable service,
and be responsive to customers and the public."2 Greylock has been created for that very
2 Order No. 35465 at p. 13. IPUC Docket Nos. ATL-E-22-01 and ATL-E-22-01
Greylock Energy Holdings' Application
Page 4
purpose and with the combined abilities and continued efforts of its two member/owners
Greylock is capable of operating and maintaining the Utility in the public interest.
Communications regarding this Application should be addressed to Peter Richardson at
the contact information noted above, and to:
Nick Jones
r:rs&slvp(ryqheqcelo
Gene Haught
Pgtil? {r@y ilh e-a $elrr
With copies to Atlanta Power Company counsel:
Christopher R. Nunez
crn(rAmcanangy,rD
Brad Purdy
bmp urdyGDhotm_ai l. corU
V. Public Hearing and Modified Procedure
Greylock believes that a full evidentiary hearing complete with pre-file testimonies is not
necessary to consider the issues presented herein. Greylock respectfully submits that the costs of
conducting such a hearing will needlessly add to the transaction costs for the purchase and
economical operation of this extraordinarily small investor-owned electric utility. Greylock
therefore respectfully requests the Commission: (l) process this Application under Modified
Procedure; (2) issue its final order approving the Agreement; and (3) authorize the transfer of the
certificate of public convenience and necessity as described in the Agreement. Nevertheless,
Greylock is cognizant of the requirement in ldaho Code Section 6l-328 which provides that the
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Page 5
Commission must conduct a "public hearing upon the application." Greylock is prepared to
participate in and provide written and/or oral testimony as the Commission may require, at a
public hearing convened for the purpose of satis$ing the requirements of Idaho Code Section
6t-328.
VI. Five Year Plan
Greylock has demonstrated its present ability to operate and maintain this Utility in the
public interest as it is currently configured. However, given the expertise and intimate
knowledge that Messrs. Jones and Haught have of the Atlanta Power Company's system and
given their extensive knowledge and skills in operating and maintaining electric utility systems
they have constructed a five-year improvement plan for the Commission's consideration and
acknowledgement. A copy of the five-year plan is attached hereto as Exhibit B. It identifies
planned upgrades and repairs to the system and anticipated outcomes for each of the next five
years.
VII. Summary
All three prerequisites provided for in Idaho Code Section 61-328 for the Commission's
approval of Greylock's Application have been met, to wit:
(A) The transaction is in the public interest. Although "the public interest" is not
quantifiable, allowing the Atlanta Power Company to be acquired by an entity such as Greylock
will ensure the ability of this Utility to provide safe and reliable service into the future, Greylock
has also demonstrated its ability to be responsive to the Utility's customers. The proposed
transaction is clearly in the public's interest.
(B) The cost of and rates for supplying service will not be inmeased by reason of the
transaction. Greylock will not be seeking a general rate increase to cover the transaction costs of
Greylock Encrgy Holdings' Application
Page 6
this proceeding or of negotiating the purchase agreement. Those costs are being borne
personally by Messrs. Jones and Haught. Furthermore, Greylock intends to continue to operate
the Utility on a strict cost-of-service basis. Should any return on equity investments be sought,
they witl be subject to this Commission's approval.3 Hence no rate increase will be imposed on
Atlanta's customers by reason of the proposed transaction.
(C) The applicant has the bona fide intent and financial ability to operate and maintain the
Utility in the public interest. Bonafide intent, of course, simply means goodfoith intent.
Messrs. Jones' and Haughtos sole interest in acquiring this Utility is for the purpose of operating
and maintaining it in the public interest. Their good faith intent to do so is beyond question.
Given their experience in the utility industry they also have amply demonstrated their ability to
operate and maintain the property in the public interest. Given their further commitment to
prompt billing, collection and strict adherence to accounting conventions, the Utility's financial
cash flow (coupled with the new owners' sweat equity investments) will be suffrcient to maintain
the Utility in the public interest. The Applicant has no current plans to seek a rate increase or
changes to the existing tariffs.
WHEREFORE; Greylock Energy Holdings, LLC rcspectfully requests that the
Commission (l) process this Application by Modified Procedure, with a public hearing as
necessary; (2) issue its order approving the Agreement; and (3) specifically authorize the transfer
of the certificate of public convenience and necessity as provided for in the Agreement.
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I No such returns are sought or even contemplated at this time.
Greylock Energy Holdings' Application
Page 7
$V
Ihtod thir _ day of Octsbo 2VN2.
PctcrL
Afiorrcy fq
Grcylock Enorg Holdingt
Gnylock Enogy lloldingr' Applicafim
PagE I
Peter J. Richardson ISB # 3195
RICHARDSON ADAMS, PLLC
515 N. 27th Street
Boise,Idaho 83702
Telephone: [phone]
peter@ichardsonadams. com
Attorneys for Greylock Energy Holdings, LI,C
BEX'ORE TUE IDAHO PI'BLIC UTILMES COMMISSION
IN THEMATTEROFTHE APPLICATION OF
CREYLOCK ENBRGY HOLDINGS, LLC FOR
APPROVAL OF ITS STOCK AND OWNERSHIP
INTERESTS PURCHASE ACREEMENT WTTH
ISRAEL RAY FORTHE ACQTTTSmONOFTHE
ATLANTA FOWER COMPANY
CASENO.
APPLICATION OF GREYLOCI( ENERCY
HOLDINGS, LLC
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Exhibit A
*Stock and Oumership Int€rcsts Ptuohase Agreement"
STOCK AT.ID OWNERSHIP INTERESTS PT'RCHASE AGREEMENT
betrreen
Grcylock Encrry lloldingr, LLC,
an ldaho Limid Liability Compmy
.sd i
Irraol Re5 afr Individual andthe Wonty
Slurcounro of tte Atlanta PonrcrConnpany
Drtcd u of Augurt Z6r?,On
$tock Purchosc Agrcomeut
Crreylock Energr lloldings, LI-,IC (Buycr)
Iorrel Ray (Sellcr)
Page I
TABLE OF'CONTENTS
LIST OF EXHIBITS
ARTICLE ONE
PREAIVIBLE
ARTICLE TWO
RECITALS
ARTICLE THREE
DEFINITIONS AND CONSTRUCTION
ARTICLE T1OTIR
PI,'RCHASE AND SALE
ARTICLE FTYE
CONDITIONS PRECEDENT TO CLOSINC
ARTICLE StX
PAYMENT TERMS
ARTICLE SEVEN
REPRESENTATIONS AND WARRANTIES OF THE SELLER
ARTICLE EIGHT
CONTRACTS AI{D PERMITS
ARTICLE htINE
BANK ACCOI.JNTS
ARTICLE TEN
MATERIAL MISSTATEMENTS OR OMISSIONS
ARTICLE ELEVEN
INDEMNIFICATION
ARTICLE TWELVB
MISCELLANEOUS
Stock Purchase Agreement
Greylock Energy Holdings, LLC @uyer)
lsrael Ray (Seller)
Page 2
LIST OF EXHIBITS
ExhlbftA
PromlrroryNotc
Erhtbft B
Ilercrlpfion of Lud Trurfemd from Sellor b Buyer
Eiltbttc
Ilercrlptlon of Lud Tnnrfcrrcd from Buycr to Seller
ErHbltI)
Conhrctr
ExhtbftE
Pcmr|tc
ErhlbltG
Llrt of Comprny Arc0r bctng trrnrfercd
Stock Putchan€ Agrcemont
Oreylock Eneq5/ Holdingr, tLC (Buyor)
Israel Ray (Sclter)
Pagc 3