28979.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION TO APPROVE A CUSTOMER ALLOCATION AGREEMENT BETWEEN AVISTA UTILITIES AND KOOTENAI ELECTRIC COOPERATIVE. )
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CASE NO. AVU-E-02-1

ORDER NO.  28979
On January 22, 2002, Avista Utilities (Avista) filed an Application for approval of an Agreement Allocating Consumer between the Avista and Kootenai Electric Cooperative (Kootenai). The Application notes that this filing is made pursuant to the Idaho Electric Supplier Stabilization Act (ESSA), Idaho Code § 61-332 et. seq and Order No. 28681, which approved the service territory agreement between Avista and Kootenai last spring in Case No. AVU-E-01-2. In an Order issued January 29, 2002, the Commission issued a Notice of Application and a Notice of Modified Procedure. Order No. 28942. Only the Commission Staff submitted comments, which supported adoption of the Agreement. In this Order the Commission approves the Agreement Allocating Consumer as set out in greater detail below.
BACKGROUND
In December 2000 and February 2001, the Idaho Legislature amended portions of the ESSA. In particular, Idaho Code § 61-333 was amended to provide that all service agreements which allocate territory or customers between electric suppliers (such as Avista and Kootenai Electric) be filed with the Commission. Idaho Code § 61-333(1) now provides in pertinent part that
the commission shall after notice and opportunity for hearing, review and approve or reject [such] contracts…between cooperatives and public utilities….the commission shall approve such contracts only upon finding that the allocation of territories or consumers is in conformance with the provisions and purposes of this act.

Idaho Code § 61-333(1) (2001). As set out more fully in Idaho Code § 61-332, the purposes of the ESSA are to: (1) promote harmony among and between electric suppliers; (2) prohibit the “pirating” of consumers served by another supplier; (3) discourage duplication of electric facilities; (4) stabilize the territory and consumers served by the suppliers; (5) actively supervise certain conduct of the suppliers.
THE CUSTOMER ALLOCATION AGREEMENT
The Agreement Allocating Consumer (Agreement) submitted for the Commission’s review was executed on January 22, 2002. This Agreement was reached because a consumer, Mr. Kary Doerfler, wanted electric service extended to a service entrance located on his residential property. Both Kootenai and Avista have existing service lines within 1,320 feet of the service entrance. Kootenai’s service line is nearest the service entrance and thus has the right to serve Mr. Doerfler pursuant to the ESSA. Idaho Code § 61-332C(3). However, Mr. Doerfler requested that Avista extend a line from its facilities to his service entrance because a line extension from Kootenai’s existing service line would be substantially more expensive.
Pursuant to the provisions of Idaho Code § 61-333, Avista and Kootenai have entered into an agreement allowing Avista to extend its facilities to the service entrance. Agreement at 2. Avista and Kootenai also agree that Avista shall provide service to Mr. Doerfler and his successors at the service entrance. Id. The Agreement also provides the following limitation: “Avista’s line extension to Mr. Doerfler’s service entrance shall not be considered ‘an existing service line’ under the ESSA for the purpose of determining which electric supplier shall provide electric service for a new service entrance.” Id.
The Agreement states that it is subject to the approval of the Idaho Public Utilities Commission and if rejected, shall be void ab initio. Id. If the Commission approves the Agreement, it shall be binding upon the parties, their successors and assigns. Id.
STAFF COMMENTS
Staff filed the only comments received by the Commission in this case. Staff reviewed the service conditions that led to the Agreement Allocating Customer between Avista and Kootenai and recommended approval of the Agreement based on the least cost analysis conducted by the two utilities. Comments at 2.
Staff noted that although Kootenai’s facilities are closer than Avista’s, Kootenai’s nearest facility is not sufficient to provide service to the Doerfler residence. Id. Kootenai estimated the cost of the additional construction and easement acquisition necessary to serve the Doerfler residence to be in excess of $15,000. Id. In keeping with its line extension rules, Avista’s estimated cost to serve is $8,065. Id. Consequently, Staff agreed with both utilities and Mr. Doerfler that the best solution in this case is for Avista to provide the service.
DISCUSSION
After reviewing the Application, the Agreement Allocating Consumer and the pertinent provisions of the ESSA, we find that the Agreement Allocating Consumer should be approved. We note that there were no opposing comments and the only comments submitted supported approval of the Agreement. Avista, Kootenai, and Staff agree that Avista’s cost to serve Mr. Doerfler is significantly less than that of Kootenai, even though Kootenai has the right to serve this customer under the ESSA. We find that this Agreement Allocating Consumer is a reasonable resolution under the circumstances and thus promotes “harmony among and between electrical suppliers furnishing electricity within the state of Idaho.” Idaho Code § 61-332(2). We also find that the Agreement discourages “duplication of electrical facilities” by allocating residential customers. Id. Consequently, we conclude that the Agreement is in conformance with the purposes of the ESSA.
O R D E R
IT IS HEREBY ORDERED that Avista Utilities’ Application for approval of an Agreement Allocating Consumer formed on January 22, 2002, between Avista Utilities and Kootenai Electric Cooperative is approved.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. AVU-E-02-1 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this order or in interlocutory Orders previously issued in this Case No. AVU-E-02-1. For purposes of filing a petition for reconsideration, this order shall become effective as of the service date. Idaho Code § 61-626. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of March 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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ORDER NO. 28979 1

Office of the Secretary
Service Date
March 19, 2002