20070808Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:AUGUST 1 2007
SUBJECT:APPLICATION FOR APPROVAL OF A SERVICE TERRITORY
AGREEMENT FILED BY VISTA UTILITIES AND NORTHERN
LIGHTS, CASE NO. A VU-07-
On June 20, 2007, Avista Corporation dba Avista Utilities filed an Application
seeking the Commission s approval of a contract between Avista and Northern Lights 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). On July 10, 2007, the Commission issued a
Notice of Application and Modified Procedure requesting comments on the Application. The
only party to respond was the Commission Staff.
THE APPLICATION
Avista and Northern Lights proposed to allocate servIce territory in a IS-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 ~ 1.
A plat of the subdivision is attached to the Agreement.
The parties asserted 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 A vista 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 ~ 3.
DECISION MEMORANDUM
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. Given the
agreement of the parties, they recommended that the Application be processed under Modified
Procedure. The parties also acknowledged that the Agreement is subject to the Commission
approval. Id. at ~ 4.
THE ESSA
Idaho Code 961-333(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 961-332A(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 961-333A(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.
ST AFF COMMENTS
Staff recommended that the Commission approve the Agreement. Staff commented
that Northern Lights facilities are closer to the majority of lots in the subdivision. After
reviewing the Application, Staff determined that the Agreement meets the purposes of the ESSA
by discouraging duplication, stabilizing service territories, and promoting harmony between
electric suppliers.
COMMISSION DECISION
Does the Commission approve the Customer Allocation Agreement between A vista
and Northern Lights? Does the Commission find the Agreement comports with the goals of the
ESSA?
Don Howell
bls/M:A VU-O7-05 dh2
DECISION MEMORANDUM