20061027Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:DONOVAN E. WALKER
DATE:OCTOBER 27, 2006
SUBJECT:AVISTA'APPLICATION TO APPROVE A TERRITORY
ALLOCATION AGREEMENT WITH NORTHERN LIGHTS, INc., CASE
NO. A VU-06- 7
On September 11 , 2006, A vista filed an Application to approve an agreement
allocating service territory with Northern Lights, Inc. pursuant to the Electric Supplier
Stabilization Act (ESSA), Idaho Code ~~ 61-332 et seq. The parties
' "
Agreement Allocating
Territory" is dated July 24 2006. The Agreement was executed pursuant to the provisions of the
Electric Supplier Stabilization Act (ESSA) and specifically Idaho Code ~ 61-333(1).
On October 2, 2006, the Commission issued Order No. 30134 requesting that
interested persons file comments regarding the ESSA Agreement no later than October 23 2006.
Only the Commission Staff filed comments and it recommended that the Commission approve
the ESSA Agreement.
THE APPLICATION
According to the Application the parties have entered into an agreement pursuant to
the ESSA in order to allocate territory, avoid disputes between utilities, and to provide
consumers with the best possible service. Both utilities have existing service lines near a new
development (Development) in Sandpoint, Idaho, and both utilities are able and willing to supply
electric service to consumers who may establish service entrances in the Development. The
utilities have agreed to an allocation of service territory to each utility as set forth in their
Agreement.
DECISION MEMORANDUM
The Agreement Allocating Territory as well as a map of the designated service areas
(Exhibit B) and a legal description of the boundaries (Exhibit A) was filed with the Application.
According to the Agreement A vista and Northern Lights will each be entitled to extend their
electric facilities, to the exclusion of the other, within the territory allocated to each as outlined
on Exhibit B, and to provide service to customers who locate new electric service entrances
within such territory. The Agreement states that, within the territory allocated, each utility shall
provide line extensions and electric service pursuant to the provisions of their respective line
extension policies, rate schedules, and/or tariffs in force at the time such extensions or services
are requested.The Agreement further provides that a line extension installed within the
boundaries of the Development to serve an electric service located within the territory allocated
by the Agreement shall not be considered an "existing service line" and may not be used as a
future measuring point for the purpose of determining which utility is entitled to provide electric
service under the ESSA to new service entrances located in territory not allocated pursuant to the
Agreement. Additionally, the Agreement states that the utilities current electric service lines as
shown on Exhibit B, as well as any line extensions external to the boundaries defined in the
Agreement and outlined on Exhibit B which are required to reach existing infrastructures within
the Development and which are installed in accordance with the ESSA may be used to
determine future electric service rights to new service entrances located in territory not allocated
pursuant to the Agreement. Lastly, the Agreement states that the boundaries set forth by the
Agreement and shown on Exhibit B will not be effected by any subsequent changes in lot lines
roadways, or other boundaries within the Development that occur after the date of the
Agreement.
Idaho Code ~ 61-333(1) provides that electric suppliers may contract for the
purpose of "allocating territories, consumers, and future consumers.. . and designating which
territories and consumers are to be served by which contracting electric supplier." Under the
ESSA, both Avista and Northern Lights are defined as electric suppliers. Idaho Code ~ 61-
332A(4). After notice and opportunity for hearing, the Commission may approve agreements
allocating service territories and customers between electric suppliers only upon finding that the
allocation is in conformance with the purposes of the ESSA. Idaho Code ~ 61-333A(1). As set
out in Idaho Code ~ 61-332(2), the purpose of the ESSA is to: discourage duplication of
DECISION MEMORANDUM
facilities; prohibit "pirating" of consumers; stabilize service territories and consumers; and
promote harmony between electric suppliers.
STAFF COMMENTS
After reviewing the Application and the accompanYIng Agreement Staff
recommends that the Commission approve the Agreement. Staff recommends that the
Agreement is in conformance with the provisions and purposes of the ESSA, specifically those
found in Idaho Code ~ 61-332(2).
Staff also recommends that the Commission actively support a broader expansion
agreement plan for the North Idaho Region between Avista, Northern Lights, and Kootenai
Electric in order to ensure that electric infrastructure and expansion is developed in an
economically efficient manner.
COMMISSION DECISION
Does the Commission wish to approve the territory and customer allocation
Agreement between A vista and Northern Lights? Does the Commission find that the Agreement
comports with the purposes of the ESSA?
Does the Commission wish to direct A vista to pursue a broader expansion agreement
plan with the other electric utilities for the North Idaho Region?
c:bL 7. C( cL-
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Donovan E. Walker
M:A VU-O6-07 dw2
DECISION MEMORANDUM