20230731Burley Evidentiary Hearing Brief.pdf

EVIDENTIARY HEARING BRIEF - 1
Jaxon C. Munns, ISB# 11092
MURRAY ZIEL & JOHNSTON, PLLC
770 South Woodruff Avenue
Idaho Falls, Idaho 83401
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
UNITED ELECTRIC CO-OP, INC.,
COMPLAINANT,
vs.
THE CITY OF BURLEY, IDAHO,
RESPONDENT.

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Case No. C15-E-23-01 Evidentiary Hearing Brief
COMES NOW, the City of Burley, Idaho, by and through its attorney, Jaxon C. Munns of
the firm Murray, Ziel, & Johnston, PLLC, and in compliance with the Commission’s Notice of
Petition for Declaratory Judgment and Notice of Evidentiary Hearing Order No. 35855 submit the
following Evidentiary Hearing Brief as follows:
RECITATION OF FACTS
In 1985, the City of Burley and the United Electric Co-op, Inc, through its predecessor
entity, entered into a territory service agreement (“TSA”) for the allocation of electrical service
provision for residents in Minidoka County. Since 1985, amendments have been made to the TSA,
eventually resulting in the most recent iteration of the TSA. Since the entry of the 2003 Order,
disputes have arisen between the parties regarding the continued growth the City of Burley is
experiencing. As basis for their Petition, Burley raises the following concerns:
i. The members who negotiated and entered the 1985 Territory Service Agreement,
and the 2003 amendment are no longer members of the bodies who have the
RECEIVED
2023 JULY 31, 2023 4:59PM
IDAHO PUBLIC
UTILITIES COMMISSION
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authority to negotiate and enter these Agreements.
The 1985 Territory Service Agreement (“TSA”) and the 2003 Amendment to the 1985
TSA were negotiated and approved by members of the Burley City Council, as well as the Board
of Directors for United Electric Co-Op. The City of Burley City Council Members in 2003 consisted
of: Curt Mendenhall, Gordon Hansen, Brent Kerbs, Dennis Curtis, Dave Ringle, and Adria Masoner.
Not a single member of the 2003 Burley City Council is the same, with the following members now
comprising the City Council: Casey Andersen, John Craner, Janet Hansen, Bryce Morgan, Jim Powell,
and Kimberli Seely. Upon information and belief, none of the individuals who exercised their
responsibilities on behalf of United Electric remain in those positions to date. To hold both parties
to the 1985 TSA and 2003 amendment in perpetuity goes against the very nature of democracy,
namely, that as new City Council Members are elected to office, they have the ability to make
changes to these significant items as they were elected to do by the citizens of Burley.
ii. No clause exists in any of the TSAs which prevents either party from terminating
the TSAs to renegotiate another.
The TSAs in 1985, 1996, and 2003 are all replete with extensive language regarding the
rights and responsibilities of the parties. There are no clauses in any of these agreements which
explicitly prohibit the parties from being able to exercise a termination for any reason at all. Even
more shocking, the TSAs do not schedule regular and anticipated renewal periods wherein the
parties are able to revisit any issue. Even if the intent in 1985, 1996 and 2003 was to bind the City
of Burley and United or its predecessors to the TSA in perpetuity, such intent would have been
and is impracticable given the very nature of the parties themselves entering into this kind of
agreement. Further, the very fact that there are at least 3 different iterations of the TSA shows that
change in the parties position is inevitable. Without a clause explicitly prohibiting termination and
renegotiation, the presumption should be that the parties are free to do so. Burley is proposing that
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moving forward, there are set renewal periods for the TSA, and at each renewal period there be a
clause contemplated to reimburse either party should investments have been made in anticipation
of renewal, that do not come to fruition as a result of the other party terminating.
iii. Despite waiving conflict, there was a flagrant conflict of interest from
representation throughout the proceedings between the City of Burley and United
Electric Co-Op.
In the June 20, 2003 application filed with the Idaho Public Utilities Commission Case No.
GNR-E-03-03 the City of Burley was represented by R.C. Stone, Esq. United Electric Co-Op, on
the other hand was represented by William A. Parsons, Esq. Both these attorneys worked at the
same law firm, as is clearly stated in the application caption itself. See Exhibit “A”. Namely, both
attorneys state working at Parsons, Smith & Stone, LLP in Burley, Idaho. This fact alone creates
significant red flags as to whether or not either party was receiving sound legal advice, however
the issue is further worsened by looking at past filings and agreements in this matter. Specifically,
in a letter dated June 15, 1976 the same William A Parsons can clearly be seen representing the
City of Burley in these negotiations. See Exhibit “B”. Again later, Mr. Parsons in a letter dated
June 10, 1996 can clearly be seen representing the city of Burley in the negotiations which are
now being litigated in front of this Commission. See Exhibit “C”. As such, after representing the
City of Burley on these matters for presumably over 20 years, Mr. Parsons then hands off
representation of the City to R.C. Stone, and claims United Electric Co-Op as a client for himself,
while possessing knowledge of over 20 years of representing Burley on this matter.. Even if the
parties waived such conflict, this calls into question the validity of the legal advice relied upon by
both United Electric as well as the City of Burley. Thankfully, the Idaho legislature has provided
mechanism for parties to not be held hostage to the incorrect decisions of past law makers.
iv. Pursuant to Idaho Code 61-333B, statutory methods are available for citizens to
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not be forced into using one service provider over another based on an agreement
entered into 37 years ago.
The Idaho legislature has contemplated an issue of two service providers not being able to
reach terms for an amended service agreement. Namely, the legislature provided, “In the event that
such voluntary agreement cannot be made within ninety (90) days of the date of incorporation or
annexation of such territory served by such cooperative association, then the municipal
corporation may, if so determined by unanimous vote of its governing body, submit to the
qualified electors of such municipality upon a special ballot to be voted upon at the next regular
election of such municipality, the question "Shall portions of the …. of …., Idaho which have
heretofore been served electrical energy by …. become a part of the electrical system of the
…. of …., Idaho. Said areas are generally known and described as follows: (Insert description)."
Idaho Code 61-333B.
Once this process is undertaken, the parties must then work to come to an agreement on
terms of “just compensation” for whatever business would be lost by the party who loses
business. Mechanisms are clearly in place here to handle such a situation, as is the situation the
parties now find themselves. The City of Burley stands prepared to negotiate this just
compensation to United Electric.
JURISDICTION AND PROCEDURAL BASIS FOR
PETITION FOR DECLARATORY ORDER

An entity may petition the Commission to enter a declaratory order, and the Commission has
authority to grant the same. See Idaho Code §61-334B(3), IDAPA 31.01.01.101. The Commission
has broad authority and jurisdiction “to supervise and regulate every public utility in the state and to
do all things necessary to carry out the spirit and intent of the provisions of this act.” Idaho Code§
61-501. Pursuant to Idaho Code 61-333B, mechanism exist if parties are unable to come to
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voluntary agreements regarding the provisions of public utilities to growing cities.
ANTICIPATED TESTIMONY
• Brent Wallin, City of Burley. Mr. Wallin oversees the electrical department for the City of
Burley, and it is anticipated Mr. Wallin will testify as to the City of Burley’s understanding of
its action in relation to the Suntado Project.
EXHIBITS
• Exhibit A
CONCLUSION

In sum, the City of Burley respectfully requests that the Idaho Public Utilities Commission
consider the change in circumstances that have occurred since the entry of the 2003 Order, and to
enter an order consistent with the aims and purposes of the Commission. Namely, the fact that all
parties now acting in decision making capacities are different than the individuals who made these
decisions in 2003. The Citizens of the City of Burley exercise their sacred right to vote in different
City Council members, in an effort to make changes to what has been done in the past. To hold
not just the City of Burley, but additionally, the citizens both current and present, hostage to the
decisions of a City Council 30 years ago flies in the face of the nature of democracy. Further, the
change in population in Burley since 2003 has been vast and extreme. The Idaho legislature has
provided a clear means and mechanism for which these kinds of disputes can be handled.
Respectfully, the City of Burley requests the Idaho Public Utilities Commission rescind its
previous order and allow the process of Idaho Code 61-333B to govern between the parties.
PRAYER
WHEREFORE, The City of Burley, Idaho respectfully requests the following from this
Honorable Body:
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1. A Declaratory Order, stating that the City of Burley and United Electric both are
entitled to terminate the 2003 Territory Service Agreement with reasonable notice to
the other party.
2. A Declaratory Order, stating that the provisions of Idaho Code 61-333B are now
meant to govern the negotiations between the parties.
3. An Order for Attorney’s Fees and Costs for the City of Burley, awarding them the fees
and costs incurred in bringing this Petition for Declaratory Order.
4. Any other relief the Commission sees fit to award the City of Burley.
DATED this 31st day of July 2023.

/s/ Jaxon C. Munns_____________
Jaxon C. Munns
Attorney for the City of Burley
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