28793.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

in the matter of THE PETITION FROM LLP POWER GENERATION, llc, FOR A DECLARATORY ORDER THAT IT IS NOT SUBJECT TO THE COMMISSION’S JURISDICTION. )
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CASE NO. GNR-E-01-1

ORDER NO. 28793

On June 22, 2201, LLP Power Generation, LLC (hereinafter “LLP”) filed a Petition seeking a declaratory Order from the Commission pursuant to Rule 101, IDAPA 31.01.01.101. More specifically, LLP requested the Commission to determine whether LLP’s leasing of diesel-powered locomotive engines located in Idaho to third parties for the purpose of generating power for sale in the regional wholesale market would subject LLP to the Commission’s regulatory jurisdiction. Given the pressing need for additional generation in the western United States, LLP requested that the Commission process the Petition expeditiously under Modified Procedure. IDAPA 31.01.01.202. On June 29, 2001, the Commission issued a Notice of Petition and asked interested parties to comment on the Petition no later than July 13, 2001. After reviewing the Petition and the comments filed by the Commission Staff and LLP, the Commission issues this declaratory Order as set out in greater detail below.
THE PETITION
LLP is a limited liability company owned by Locomotive Leasing Partners which is owned by GATX Capital Corporation and the Electro-Motive Division of the General Motors Corporation. LLP is the owner of diesel-powered railroad locomotives and desires to lease the locomotives to other individuals or entities (lessees). The lessees will, in turn, site the locomotives at various locations in Idaho to generate power for sale in the wholesale market. LLP states that each locomotive is capable of supplying approximately 1.8 MW.
LLP states that its sole activity will be the leasing of the locomotives to lessees. Under the terms of the leases, LLP intends to exercise no control over issues such as siting, permitting, interconnection/transmission agreements, or the operations of the locomotives to generate power. Consequently, LLP requests that the Commission find that it would not be a “public utility” subject to utility regulation under Idaho Code, Title 61. LLP also requests that the declaratory ruling not be limited to a particular transaction or set of facts but that the Commission issue a “general Order determining that this type of activity does not subject the lessor to public utility regulation.” Petition at 2, ¶ 6.
THE COMMENTS
Commission Staff. On July 11, 2001, the Commission Staff submitted comments in this matter. Based upon the facts presented in LLP’s Petition, the Staff concluded that LLP should not be subject to the Commission’s regulation. The Staff noted that Idaho Code § 61-129 sets out a two-part test for determining when an electrical corporation is considered to be a “public utility” and therefore subject to the Commission’s jurisdiction. First, a public utility must provide utility services directly or indirectly to the public or some portion thereof. Staff Comments at 2, citing Idaho Code § 61-129. Second, the utility service must be provided for compensation. Id.
Relying on two Idaho Supreme Court cases, the Staff concluded that LLP’s leasing of locomotive engines does not constitute the provision of utility services to the “public.” The Staff observed that LLP stated that its sole activity would be the leasing of locomotive equipment to others. These lessees will, in turn, site the locomotives at various locations in Idaho to generate power for sale.
The Staff did take one exception to LLP’s Petition. In particular, the Staff recommended that the requested declaratory Order not be a “general Order” of general applicability but be limited to the set of facts contained in LLP’s Petition. Staff Comments at 3.
LLP. LLP filed its comments on July 13, 2001. LLP noted that the Supreme Court in Rosebud Enterprises v. Idaho PUC recognized that the Commission possesses broad authority and jurisdiction to engage in a case-by-case analysis of various public utility statutes. 129 Idaho 609, 917 P.2d 766 (1996). Relying on the same two Supreme Court Cases cited in the Staff’s comments, LLP stated that “as a simple lessor of the locomotives, is not serving the public generally or holding itself out to serve the public generally and therefore not within this definition of a public utility.” LLP Comments at 3. Consequently, LLP asserted the leasing of locomotives to others does not constitute the provision of electric utility service to the public.
LLP also pointed out that the Commission has issued similar declaratory Orders to Idaho Power Company in instances where Idaho Power was leasing fiber optic cables to others. In three separate cases, Idaho Power petitioned the Commission to issue declaratory Orders that the leasing of fiber optic (dark) cable would not subject Idaho Power to the Commission’s jurisdiction under Title 62. As LLP noted, “in each instance the Commission issued an Order that Idaho Power, as the lessor, was not subject to regulation under [Title 62].” Id.
LLP indicated that time is of the essence and again asked the Commission to expeditiously consider this matter and issue its decision.
COMMISSION DECISION
The Commission has jurisdiction over this matter by virtue of Idaho Code § 61-501 and Utah Power & Light Company v. Idaho PUC, 112 Idaho 10, 730 P.2d 930 (1986). Moreover, the Commission has the authority to consider the Petition for Declaratory Order pursuant to Rule 101 of the Commission’s Rules of Procedure, IDAPA 31.01.01.101.
Initially, the Commission finds that LLP satisfies the technical requirements of Rule 101. The Petition in this case does not necessitate that the Commission resolve issues of a factual nature. Rather, the Commission must simply determine, based upon the factual scenario posed in the Petition, whether LLP’s conduct regarding the leasing of locomotive engines to third parties would subject it to the Commission’s jurisdiction under Title 61 of the Idaho Code.
The term “electrical corporation” includes every corporation or person owning, controlling, operating or managing any electric plant for compensation within this state. Idaho Code § 61-119. The term “electric plant” includes all property owned, controlled, operated or managed in connection with or to facilitate the production, generation, transmission, delivery or furnishing of electricity. Idaho Code § 61-118. The term “public utility” includes an electrical corporation and such corporation is “declared to be a public utility and subject to the jurisdiction, control and regulation of the [Idaho Public Utilities C]ommission.” Idaho Code § 61-129. As the parties observed, this section also establishes the two-part test for determining when a utility corporation is to be considered a “public utility.” First, a public utility must provide utility services directly or indirectly to the public or some portion thereof. Second, the utility service must be provided for compensation. Id.
In construing the first part of this test, our Supreme Court has held that satisfaction of the first prong depends whether the company has held itself out as ready, able and willing to serve the “public” with utility service. Both LLP and the Staff have noted that our Supreme Court has in at least two cases determined that furnishing utility service to one or a limited number of customers did not constitute the delivery of utility service to the public or some portion thereof. See Humbird Lumber v. Idaho PUC, 39 Idaho 505, 228 P. 271 (1924); Stoehr v. Natatorium Company, 34 Idaho 217, 221, 200 P. 132 (1921).
Based upon our review of the Petition, the written comments, the Public Utilities Law and pertinent Supreme Court cases, we find that LLP’s leasing of locomotive engines to third parties for the generation of electricity within Idaho does not subject LLP to our regulatory authority under Title 61 of the Idaho Code. Our determination is based upon and limited to the particular facts presented in this case.
O R D E R
IT IS HEREBY ORDERED that LLP’s Petition for a declaratory Order is granted. After reviewing the particular facts of this case, the Commission concludes that lease of locomotive engines to lessees so they may generate electricity does not subject LLP to the provisions of Idaho Code, Title 61. This decision is based strictly upon the particular facts presented in the Petition.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. GNRE011 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this order or in interlocutory Orders previously issued in this Case No. GNR-E-01-1. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

Vld/O:GNR-E-01-01_dh2

ORDER NO. 28793 2

Office of the Secretary
Service Date
July 25, 2001