20070731Comments.pdf

DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3366
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION TO APPROVE AN
AGREEMENT ALLOCATING SERVICE
TERRITORY WITH NORTHERN LIGHTS, INC. )
PURSUANT TO THE IDAHO ELECTRIC
SUPPLIER STABILIZATION ACT
CASE NO. A VU-O7-
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
Record, Donald L. Howell, II, Deputy Attorney General, submits the following comments in
response to Order No. 30353 issued on July 10, 2007.
BACKGROUND
On June 20 2007, Avista Corporation dba Avista Utilities filed an Application seeking
the Commission s approval ofa contract between Avista and Northern Lights, Inc. to allocate
service territories and future consumers. Northern Lights is an electric cooperative operating in
northern Idaho. The parties
' "
Customer Allocation Agreement" is last dated May 23 2007. The
Agreement was executed pursuant to the provisions of the Electric Supplier Stabilization Act
(ESSA) and specifically Idaho Code 9 61-333(1).
STAFF COMMENTS JULY 31 , 2007
Avista and Northern Lights propose to allocate service territory in a 15-lot residential
subdivision known as Spring Haven in Sandpoint, Idaho. The subdivision is being developed by
Jerry VanOoyen and Mike Dougherty. Both electric suppliers have existing facilities that can
serve the initial 15 lots. The parties have agreed that Northern Lights will serve the initial 15 lots
because its facilities are closer to the majority oflots. Agreement at '111. A plat of the
subdivision is attached to the Agreement.
The parties assert that the allocation of service territory will avoid duplication of
facilities, avoid dispute between the parties, and provide consumers with the best possible
service. The Agreement recognizes that Avista does not give up its rights to serve future phases
of the Development or adjoining plats thereto, and the Agreement may not be used to determine
which supplier may serve other new customers. Id. at 'II 3.
The Agreement is also endorsed by Jerry VanOoyen, the owner-developer of the
property. The developers agreed to comply and be bound by the Agreement. The parties also
acknowledge that the Agreement is subject to the Commission s approval. Id. at'll 4.
Idaho Code 9 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 9 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 9 61-333A(1). As set out in Idaho
Code 9 61-332(2), the purposes of the ESSA are to: discourage duplication of facilities; prohibit
pirating" of consumers; stabilize service territories and consumers; and promote harmony
between electric suppliers.
STAFF ANALYSIS
Staff reviewed the Application to determine if the Customer Allocation Agreement with
Northern Lights is consistent with the ESSA. The service territory agreement is necessary
because Sandpoint and the surrounding area receive electric service from multiple vendors.
Without these agreements there is a risk that duplication of facilities and destabilization of
service territories and customers may occur. Because of the continuing growth in the Sandpoint
STAFF COMMENTS JULY 31, 2007
area, Staff continues to believe that it is important for A vista to have policies in place, along with
efficient planning efforts, to guard against lost or stranded investment as electric suppliers
attempt to serve new customers.
Staff asked the Company about its planning policies in Data Request No.1. A vista
response was that there is no territorial allocation agreement with Northern Lights that provides
one utility the assurance of serving all new customers within a development once backbone
service is installed. It stated further that Avista has approached Northern Lights to establish such
an agreement, but the current board at Northern Lights believes the existing case-by-case process
is sufficient.
A vista went on to report that it assigned a Competitive Development Specialist to
coordinate efforts whenever a competitive project arises. The Specialist has extensive training in
ESSA customer choice rules and has established a good working relationship with Northern
Lights.
In this case, although both companies have facilities in place to adequately serve the new
development, Northern Lights had existing infrastructure closer to the entrance and location of
the first house in the development. Furthermore, both field and GIS measurements showed that
Northern Lights was closer to the majority of the lots.
In this agreement, A vista has waived its rights to serve the new development, but will
continue to provide service to one customer located to the southeast of the development. Staff is
not aware of any opposition to this joint application. Staff recommends approval of the
application.
STAFF RECOMMENDATION
Staff supports Avista and Northern Lights in their continuing efforts to evaluate new
developments in the Sandpoint area for the most efficient way to supply service. Their efforts
and this application support the intent ofESSA and help stabilize the area and ensure that
customers receive the most efficient and cost-effective service possible. Avista and Northern
Lights have demonstrated that the agreement conforms to the provisions of the ESSA found in
Idaho Code 9 61-332. Therefore, Staff recommends the Commission approve the Customer
Allocation Agreement.
STAFF COMMENTS JULY 31 2007
Respectfully submitted this 31
-st' day of July 2007.
Donald L. H ell, II
Deputy Attorney General
Technical Staff:Dan Graves
i :umisc/comments/avueO7 ,5dhdg
STAFF COMMENTS JULY 31 , 2007
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 31sT DAY OF JULY 2007 SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. AVU-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LINDA GERVAIS
REGULATORY ANALYST
A VISTA CORPORATION
1411 EMISSION AVE
SPOKANE W A 99220
SECRE 1~
CERTIFICATE OF SERVICE