Order No 28986.pdf

ORDER NO. 28986 1
Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION TO
APPROVE AN AGREEMENT ALLOCATING
TERRITORY BETWEEN AVISTA UTILITIES
AND KOOTENAI ELECTRIC COOPERATIVE.
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CASE NO. AVU-E-02-2

ORDER NO. 28986

On February 5, 2002, Avista Utilities (Avista) filed an Application for approval of an
Agreement Allocating Territory (Agreement) 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 the Notice of Application and Modified Procedure issued on February 20,
2002, the Commission solicited comments regarding Avista’s Application. Order No. 28957.
Only the Commission Staff submitted comments, which supported adoption of the Agreement.
In this Order the Commission approves the Agreement 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

ORDER NO. 28986 2
facilities; (4) stabilize the territory and consumers served by the suppliers; (5) actively supervise
certain conduct of the suppliers.
THE AGREEMENT ALLOCATING TERRITORY
The Agreement Allocating Territory submitted for the Commission’s review was
executed on December 29, 2001. This Agreement was reached because Keystone Partners, LLC
and Pleasant View Investments, LLC (Developer) requested that Avista and Kootenai install
facilities to provide three-phase electric service to consumers who may construct service
entrances within the Developer’s real property. Agreement at 1. The Developer owns an interest
in real property known as “Expo at Post Falls,” “Expo at Post Falls Fourth Edition,” and “Expo
at Post Falls Fifth Edition” in Kootenai County, Idaho as depicted on the plat map labeled
“Exhibit A” that accompanies the Application. Id.
Both Kootenai and Avista have existing service lines on or near the Developer’s real
property. Id. Furthermore, both are able and willing to supply electric service to consumers who
may establish service entrances on the Developer’s property. Id. Pursuant to the provisions of
the ESSA, Avista and Kootenai have entered into an Agreement Allocating Territory within the
confines of the Developer’s real property. According to the Agreement, the parties entered into
the Agreement to avoid unnecessary duplication of facilities, avoid disputes as to which utility is
entitled to provide service to new service entrances, and provide the best possible service to
consumers who locate their electric service entrances on the Developer’s real property. Id.
As depicted in “Exhibit A,” the Agreement divides the Developer’s real property into
territories labeled “Kootenai Electric Service Area” and “Avista Service Area.” The Agreement
allows Avista and Kootenai to extend their facilities, to the exclusion of the other, within the
territory allocated to it in “Exhibit A.” Id. at 2. Within their respective territories, Avista and
Kootenai shall each provide line extensions and service to consumers pursuant to the provisions
of their line extension policies, rate schedules, or tariffs in force at the time such extension or
service is requested. Id.
Avista and Kootenai also agree that any line extension which serves a service
entrance located within the territory allocated by this Agreement shall be considered an “existing
service line” for the purpose of determining which electric supplier is entitled to provide electric
service to a new service entrance located in territory not allocated pursuant to the provisions of
this Agreement. Id.

ORDER NO. 28986 3
STAFF COMMENTS
According to Staff, the “Expo at Post Falls” is a multi-phased development project
located between Avista and Kootenai’s existing service areas that is being developed over
several years. Comments at 2. Avista’s existing facilities are located to the south and
Kootenai’s existing facilities are located to the west and north. Id. Staff stated that the
individual line extension policies of Avista and Kootenai would have allowed either utility to
serve the entire project. Id. While the phases and timing of the development were not finalized
at the outset of the project, it became apparent that the development timing was not conducive to
one utility serving the project from start to finish. Id.
To avoid potential conflicts, Avista Utilities, Kootenai Electric and the Developer
came to a general understanding for the entire project’s electric service. Id. The Agreement
described in the Application formalizes the general understanding for the Fifth Addition phase of
the project. Id. Staff explained that as individual phases of the development become more
defined, any necessary Territory Allocation Agreements will be formalized and executed. Id.
Staff concludes that the Agreement complies with the ESSA by drawing a line
between customers and clearly defining which utility will serve each customer within this phase
of the development. Id. at 3. Given that it satisfies the five goals listed in Idaho Code § 61-332,
Staff recommends that the Commission approve the Agreement. Id.
DISCUSSION
After reviewing the Application, the Agreement Allocating Territory and the
pertinent provisions of the ESSA, we find that the Agreement should be approved. We note that
there were no opposing comments and the only comments submitted supported approval of the
Agreement. Avista and Staff agree that the Agreement will likely avoid future disputes as to
which utility will provide electricity to the Expo at Idaho Falls Fifth Addition. We find that this
Agreement Allocating Territory 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) (2001). We also find that the Agreement discourages
“duplication of electrical facilities” by allocating territory. Id. Consequently, we conclude that
the Service Territory Agreement is in conformance with the purposes of the ESSA.

ORDER NO. 28986 4
O R D E R
IT IS HEREBY ORDERED that Avista Utilities’ Application for approval of an
Agreement Allocating Territory formed on December 29, 2001, 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 27th
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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