20070808Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:NEIL PRICE
DATE:AUGUST 3,2007
SUBJECT:APPLICATION FOR APPROVAL OF A SERVICE TERRITORY
AGREEMENT FILED BY VISTA UTILITIES AND NORTHERN
LIGHTS, CASE NO. A VU-07-
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 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 19 2007. The
Agreement was executed pursuant to the provisions of the Electric Supplier Stabilization Act
(ESSA) and specifically Idaho Code ~ 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 13-10t
residential subdivision known as Lakewood Estates in Sandpoint, Idaho. Alpine Property
Development, Inc is developing the subdivision. Both electric suppliers have existing facilities
that can serve the initial 13 lots. 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 closer to the majority of lots. Agreement at 1. A plat of the subdivision is
attached to the Agreement.
The parties asserted that the allocation of service territory would 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
DECISION MEMORANDUM
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.
The owner-developer of Alpine, Richard Lewis, has endorsed the Agreement. The
Developer agrees 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 s approval. Id. at ~
THE ESSA
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: 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?
oJ~
NEIL PRICE
DECISION MEMORANDUM