20070731Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
ISB NO. 6864
:ccr:j
Y) '1 ,
-.-'-"
Jet')l l\lil1:38
II
:/~-)'~;
J::~;)L!(:;l!....
jj:":,j;".!'
' ~ "fi OJ..., \...'
, .
Street Address for Express Mail:
472 W WASHINGTON
BOISE ID 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA 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
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 30354 on July 10, 2007
submits the following comments.
BACKGROUND
On June 15 2007, Avista Corporation dba Avista Utilities filed an Application seeking
the Commission s approval of a 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 have entered into a "Customer Allocation Agreement" which is last
dated May 19, 2007 and attached to Avista s Application. The Agreement was executed
pursuant to the provisions of the Electric Supplier Stabilization Act ("ESSA"), specifically Idaho
Code ~ 61-333(1).
STAFF COMMENTS JULY 31 , 2007
NOTICE OF APPLICATION
Avista and Northern Lights propose to allocate service territory in a 13-lot residential
subdivision development known as Lakewood Estates in Sandpoint, Idaho. Avista customer
Alpine Property Development, Inc. ("Developer ) is developing the subdivision. Both electric
suppliers have existing facilities that can serve the 13-lot subdivision. The parties recite in their
Agreement that Northern Lights already serves two existing homes in the development and will
serve the remaining lots because its facilities are in closer proximity to the development.
Agreement at 1. A plat of the subdivision is attached to the Agreement.
The parties assert that allowing Northern Lights to provide electric service to the
subdivision will avoid duplication of facilities, avoid dispute between the parties and provide
consumers the best possible service. For the aforementioned reasons, the parties agree that it is
in the best interest ofthe customer "to have a single source-utility provider.Id. 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 1 , ~ 3.
The owner-developer of Alpine Property Development, Richard Lewis, has endorsed the
Agreement. The Developer agrees to comply and be bound by the Agreement. Pursuant to their
Agreement, the parties recommend that the Application be processed under Modified Procedure.
Finally, the parties acknowledge that the Agreement is subject to the Commission s approval.
Id. at 1, ~ 4.
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 purposes of the ESSA are to: (1) discourage duplication of facilities; (2)
prohibit "pirating" of consumers; (3) stabilize service territories and consumers; and (4) promote
harmony between electric suppliers.
STAFF COMMENTS JULY 31 , 2007
STAFF REVIEW
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
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. Avista
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 better
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. Another determining factor in this case
was the rocky soil and steep terrain in the northern-most lots of the property would make it
difficult for Avista to serve the area. For these reasons, and because Northern Lights already
serves two existing homes in the development, Staff agrees that it is in the best interest of the
companies and developer to allow Northern Lights to provide service. Staff is not aware of any
opposition to this Application. Staff recommends approval of the Application.
STAFF COMMENTS JULY 31 , 2007
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
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 ~ 61-332.
Therefore, Staff recommends the Commission approve the Customer Allocation Agreement.
Respectfully submitted this::,~ day of July 2007.
Deputy Attorney General
Technical Staff: Dan Graves
i :umisc:comments/avueO7 .6npdg
STAFF COMMENTS JULY 31 , 2007
CERTIFICATE OF SERVICE
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 GERV AIS
REGULATORY ANALYST
A VISTA CORPORATION
1411 EMISSION AVE
SPOKANE W A 99220
'K~
CERTIFICATE OF SERVICE