20030801Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:JULY 21, 2003
RE:APPLICATION FOR APPROVAL OF AN ELECTRIC CUSTOMER
EXCHANGE AGREEMENT FILED BY A VISTA UTILITIES AND
KOOTENAI ELECTRIC COOPERATIVE, CASE NO. A VU-03-
On June 5, 2003, Avista Corporation dba Avista Utilities filed an Application seeking
the Commission s approval of a contract between Avista and Kootenai Electric Cooperative to
allocate service territories and consumers. In Order No. 29268 the Commission issued a Notice
of Modified Procedure soliciting public comments on the parties' Agreement.
comment received was submitted by the Commission Staff recommending approval.
The only
APPLICATION
On June 2, 2003 , the parties executed an "Agreement to Exchange Electric
Customers.In their Agreement, the parties propose to exchange one current customer and
realign service areas for two parts of a subdivision. More specifically, the Agreement transfers
one customer (Roy Armstrong) from A vista to Kootenai. In addition, the party agreed that the
undeveloped part of Grayling Estates Subdivision (approximately 41 lots) be transferred from
Kootenai's service territory to the Avista s service area. The agricultural property surrounding
Mr. Armstrong s property is being developed into a residential subdivision to be served by
Kootenai. Consequently, the parties maintain that service to Mr. Armstrong is becoming more
difficult and will be costly to convert his existing Avista service to underground service (to
accommodate the newer phase of the subdivision). If approved, the Agreement provides that
Kootenai's service area will encompass all of Mr. Armstrong s property and eliminate the need
for A vista facilities in the immediate area.
DECISION MEMORANDUM
The Application asserts that it would be cost efficient for the utilities to exchange the
one existing customer and the two service areas. The Agreement was endorsed by Mr.
Armstrong and by Prairie Falls, the developer of Grayling Estates Subdivision.
STAFF COMMENTS
Staff recommended that the Commission approve the Agreement. Staff noted that the
exchange of the existing customer and territories appear to be a least-cost exchange between the
suppliers. Staff Comments at 2. The exchange of the Armstrong account requires the parties to
seek an "exception" to the anti-pirating provisions of Idaho Code 961-332B. Staff supports the
exception request and notes that the exchange of the customer and service territories also avoids
duplication of facilities and stabilizes the territories of the two suppliers.
Staff also noted that the final phase of the Grayling Estates Subdivision (41 lots) is
closest to Avista s existing service territory. Staff stated that the service territory exchange
appears reasonable because Kootenai's line extension facilities to serve the final phase of the
Grayling Estates would require Kootenai to perform an expensive and time-consuming boring
project under an adjacent railroad right-of-way to put in the necessary feeder line. Consequently,
Staff recommended that the Commission grant an exception to switch Mr. Armstrong s service
pursuant to Idaho Code 9 61-334B(1) and find that the service territory swap meets the purposes
and provisions of the ESSA codified at Idaho Code 9 61-332(2). See Idaho Code 9 61-333(1).
COMMISSION DECISION
Does the Commission find that it is reasonable to grant an exception from the ESSA'
anti-pirating provision? Does the Commission find that the exchange of service territories
consistent with the provisions and purposes ofthe ESSA?
i)~
Don Howell
Vld/M:A VUEO305 - dh2
DECISION MEMORANDUM