2001315_ln.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
BILL EASTLAKE
GENE FADNESS
DON HOWELL
RANDY LOBB
DAVE SCHUNKE
RICK STERLING
TONYA CLARK
BEVERLY BARKER
WORKING FILE

FROM: LISA NORDSTROM

DATE: MARCH 15, 2001

RE: APPLICATION TO APPROVE THE SERVICE TERRITORY AGREEMENT BETWEEN AVISTA AND CLEARWATER POWER COMPANY, CASE NO. AVU-E-01-3

On February 1, 2001, Avista filed an Application for approval of a Service Territory Agreement between itself and Clearwater Power Company. Submission of the Application was prompted by amendments to the Electric Supplier Stabilization Act (ESSA) enacted in December 2000. In an Order dated February 16, 2001, the Commission issued a Notice of Application and a Notice of Modified Procedure. Only the Commission Staff submitted comments, which supported adoption of the Service Territory Agreement.
THE SETTLEMENT AGREEMENT
The Service Territory Agreement submitted for the Commission’s review was a settlement agreement executed on July 12, 1993. This agreement was reached after Clearwater filed a complaint against Washington Water Power Company (now known as Avista) in the Second Judicial District and later in the United States District Court in 1992. Clearwater alleged that Washington Water Power had violated the Electric Suppliers Stabilization Act by providing electrical service to an area commonly known as the Vista Addition and Vista Addition Subdivision (“Vista”) in the city of Moscow. After Washington Water Power filed a counterclaim, the parties settled the dispute under Idaho Code § 61-333, which authorizes contracts among electric suppliers to resolve or allocate territories between electrical suppliers.
In the settlement agreement, Washington Water Power and Clearwater split the electrical service customers in the area in and around the city of Moscow. First, Washington Water Power would have the exclusive right to continue to serve the area known as Vista. Agreement § 1. Second, Washington Water Power would exclusively serve the areas numbered 3 and 14 on Latah County Assessor map 10A. Id. § 2. However, Clearwater retained the exclusive right to serve those lots fronting the north boundary of the Robinson Lake Road right-of-way not to exceed 300 feet north of the road. Id. § 2. Third, Clearwater would exclusively serve the area number 2 and that portion of number 15 north of Robinson Lake Road on the attached map. Id. § 3. Fourth, Clearwater agreed to remove within 90 days the existing distribution service line on the southern boundary of the Vista subdivision from the end point east to the last distribution service pole then in use. Id. § 4. Finally, Washington Water Power agreed not to provide new service or new connections to Syringa Trailer Park, except for any new accounts or upgrades of existing accounts. Id. § 5. In doing so, Washington Water Power agreed that it would not provide new connections from the Syringa Trailer Park service line to the north of the common line between sections 10 and 15 of Range 5W, Township 39N. Id. § 5.
Although neither party admitted liability, they intended this Agreement to settle a disputed court case. Id. § 6. This settlement agreement does not contain provisions that address breach of the contract or other standard contract conditions.
THE STAFF COMMENTS
In its comments, the Staff observed that the standard of review to be employed by the Commission for reviewing Service Territory Agreements is set out in Idaho Code § 61-333(1). After reviewing provisions of the Service Territory Agreement, the Staff recommended that the Commission approve the Service Territory Agreement. Staff noted that in the eight years this agreement has been in effect, “no further service territory disputes have occurred to Staff’s knowledge, either in this particular area or in any other area where the two utilities’ service territories are adjacent.” Staff Comments at 3. Although the Agreement only covers a small portion of the utilities’ service areas near Moscow, Staff believes “these general provisions have provided and will continue to provide adequate guidance in most cases.” Staff Comments at 4. Because this Agreement resolved the only known conflict between Avista and Clearwater, Staff finds “the Agreement has served a valuable purpose and has clearly met the purposes of the ESSA as amended.” Staff Comments at 3. The Staff comments are attached for your review.
Based upon the lack of any adverse comments and Staff’s analysis, it recommends that the July 12, 1993 Service Territory Agreement, be approved.
COMMISSION DECISION
Does the Commission wish to approve the Settlement Agreement?

Lisa Nordstrom

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Following submission of the Application, the Idaho Legislature approved and the governor signed into law HB 142. HB 142 removed the sunset provision from the ESSA legislation enacted in December 2000. In particular, Idaho Code § 61-333 was amended to read in pertinent part:

The commission shall after Notice and opportunity for hearing, review and approve or reject [such] contracts…between cooperatives and utilities…. The commission shall approve such contracts upon finding that the allocation of territories or customers is in conformance with the provisions and purposes of this Act.

Idaho Code § 61-333(1)(amended 2000).

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