20210203Comments.pdf

EDWARD J. JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-001 4
[phone]
IDAHO BAR NO. 10446
IN THE MATTER OF AVISTA
CORPORATION'S APPLICATION FOR AN
ORDER APPROVING THE EXTENSION OF A
SERVICE TERRITORY AGREEMENT
BETWEEN AVISTA AND KOOTENAI
ELECTRIC COOPERATIVE
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Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUME 2OI-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. AVU.E.2I.Oz
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Avista
Corporation' s Application.
BACKGROUND
On January ll,2O2l, Avista Corporation ("Avista" or "Company") filed an Application
requesting the Commission approve an amendment to the Service Territory Agreement
("Agreement") between Avista and Kootenai Electric Cooperative, Inc. ("KEC").
On March 2l,2OOl, the Commission issued Order No. 28681 approving the Agreement
between Avista and KEC. In the Agreement, the parties stipulated that electric service to an
entire residential development and subsequent additions to such development shall be
determined by which electric supplier serves at least one of the lots in the subdivision pursuant to
the provisions of the Idaho Electric Supplier Stabilization Act ("ESSA"), Idaho Code E$ 6l-332
- 6I-334C. The Agreement also provides that it shall initially run for a period of 10 years but
shall be automatically extended "for successive periods of ten (10) years upon the same terms
STAFF COMMENTS FEBRUARY 3,20211
and conditions as set forth in this Agreement unless one of the parties" elects to terminate the
Agreement.
Either party may terminate the Agreement by notifying the other "not less than sixty (60)
days before the end of the initial, or renewal term of (its) intent not to renew the agreement." As
approved by the Commission in Order No. 28681, the Agreement, unless terminated, was set to
renew on February 15,2011.
On January 31,2011, Avista filed a letter advising the Commission that neither Avista
nor KEC notified each other regarding their intent to terminate the Agreement. Consequently,
the letter stated that the Agreement would be extended for another ten-year term, or until
February 15,2021. For purposes of updating the administrative record in Case No. AVU-E-O1-
O2,the Commission issued a Minute Order on February 24,2011.
The current Agreement would automatically renew on February 15,2021. Because the
parties are in negotiations, the Company provided notice to KEC of its intent not to renew on
December 15,2020, in order to avoid being locked into a new lO-year term.
STAFF REVIEW
The current term of the Agreement is set to expire on February 15,2021. Avista and
KEC have been negotiating a new Service Territory Agreement to replace the current
Agreement. To date, the Parties have not been able to reach agreement on all of the terms of a
new Service Territory Agreement. To provide additional time to complete the negotiations on a
new Service Territory Agreement without committing to another l0-year term, the Parties have
agreed to amend the Agreement to renew for successive l2-month terms rather than 10-year
renewal terms. Amendment No. 2, Application at 6-7.
If the Company's Application and the proposed Amendment are approved, the
Agreement will remain in effect for a new l2-month term to expire on February 15,2022. The
Company stated that a new l2-month term "should provide the Parties time to complete their
negotiations and finalize anew Service Territory Agreement to replace the Agreement."
Application at 3.
The standard of review to be employed by the Commission for Service Territory
Agreements is set out in the ESSA. The ESSA states that the Commission "shall approve such
contracts only upon finding that the allocation of territories or consumers is in conformance with
the provisions and purposes of this act." Idaho Code * 6l-333(lxemphasis added).
STAFF COMMENTS FEBRUARY 3,20212
The purposes of the ESSA are listed in ldaho Code * 6l-332 and include the following
five points:
a. promote harmony among and between electric suppliers furnishing electricity
within the state of Idaho;
b. prohibit the "pirating" of customers of another electric supplier;
c. discourage duplication of electric facilities;
d. actively supervise certain conduct ofelectric suppliers as it relates to this act; and
e. stabilize the territories and customers served with electricity by such electric
suppliers.
Staff believes the Company's Application supports the intent of the ESSA, in part, to
permit agreements that can aid in minimizing and resolving disputes. As such, Staff believes an
amendment to the Agreement in support of ongoing negotiations between the Company and
KEC is reasonable. However, Staff is somewhat concerned that Avista and KEC may not reach
agreement and complete a new Service Territory Agreement before the next 12-month automatic
renewal if the Amendment is approved. Staff encourages the Company to provide updates to the
Commission on the progress of negotiations and the development of a new Service Territory
Agreement. If the new Service Territory Agreement includes material changes, Staff
recofirmends Avista file it for approval no later than November l,2O2I, to allow time for review
and a final Commission Order prior to the current term expiring.
STAFF RE,COMMENDATIONS
Staff recommends that Amendment No. 2 to the Agreement between Avista and KEC be
approved. Staff recommends that the Company provide updates on a quarterly basis to the
Commission on the progress of negotiations and the development of a new Service Territory
Agreement and to notify the Commission no later than October l,2O2l if a new Service
Territory Agreement will be filed with the Commission by November 1,202I.
STAFF COMMENTS FEBRUARY 3,202IaJ
Respectfully submitted this bd' day of Febru ary 2O2t
Lt
Edward J.
Deputy
Technical Staff: Kevin Keyt
Kathy Stockton
i:umisc/commentVavue2l.2ejkkkls comments
4STAIIF COMMENTS FEBRUARY 3,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 3'd DAY OF FEBRUARY 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. AVU-E-2T-02, BY E-MAILING A COPY THEREOF TO THE
FOLLOWING:
MICHAEL G ANDREA
SENIOR COUNSEL
AVISTA CORPORATION
POBOX3727
SPOKANE WA99220-3727
E-MAIL: [e-mail]
PATRICK EHRBAR
DIR OF REGULATORY AFFAIRS
AVISTA CORPORATION
POBOX3727
SPOKANE Wp^99220-3727
E-mail: patrick.ehrbar@ avistacorp.com
avistadockets @avistacorD.com
SECRE Y
CERTIFICATE OF SERVICE