Staff.doc

Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, ID 83720-0074
Tele: (208) 334-
FAX: [phone]
Idaho Bar No. 3366

Street Address for Express Mail:

472 W Washington
Boise, ID 83702-5983

Attorney for the Idaho Public Utilities Commission

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

COMMENTS OF THE
COMMISSION STAFF

On June 29, 2001, the Commission issued a Notice of Modified Procedure and Order in this matter. In its Order, the Commission requested that interested parties comment on LLP Power Generation’s Petition seeking a declaratory Order that it is not subject to the Commission’s regulatory jurisdiction. These comments are submitted pursuant to the Commission’s Order No. 28763.
BACKGROUND
On June 22, 2001, LLP filed a Petition seeking a Declaratory Order from the Commission. In particular, LLP requested that the Commission determine whether the leasing of diesel-powered locomotive engines located in Idaho to generate electrical power for the regional wholesale market would subject LLP to the Commission’s jurisdiction. As set out in its Petition, LLP is a limited liability company owned by Locomotive Leasing Partners, which is in turn owned by GATX Capital Corporation and the Electro-Motive Division of the General Motors Corporation.
LLP indicates that its sole activity will be the leasing of locomotive equipment to others. The lessees will, in turn, site the locomotives at various locations in Idaho to generate power for sale in the wholesale market. Under the terms of its prospective leases, LLP intends to exercise no control over issues such as siting, permitting, interconnection/transmission agreements, or the operation of the locomotives to generate power. Consequently, LLP requests that the Commission find that it is not a public utility under Idaho Code Title 61.
LLP also requests that the Declaratory Ruling not be limited to a particular transaction or set of facts but be a “general order determining that this type of activity does not subject the lessor to public utility regulation.” Petition at 2, ¶ 6.
STAFF COMMENTS
Under the public utilities law, any property used “to facilitate the production, generation, transmission, delivery or furnishing of electricity” is considered as “electric plant.” Idaho Code § 61-118. Pursuant to Idaho Code § 61-119, an “electrical corporation” is any company “owning, controlling, operating or managing any electric plant for compensation within this state….”
There is 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. Idaho Code § 61-129. Second, the utility service must be provided for compensation. Id.
There have been a number of cases that have construed Idaho Code § 61-129. In Humbird Lumber v. Idaho PUC, 39 Idaho 505, 228 P. 271 (1924), the Idaho Supreme Court explained that the test for determining whether a company was a public utility depends whether the company has held itself out as ready, able and willing to serve the public. In that case, the lumber company furnished water to an adjacent neighbor. The Supreme Court ruled that furnishing water to one person under contract does not constitute delivery of water for the public or some portion thereof. Id.
In another early Idaho case, our Supreme Court observed that a corporation becomes a utility “only when and to extent that the business of such corporation becomes devoted to a public use.” Stoehr v. Natatorium Company, 34 Idaho 217, 221, 200 P. 132 (1921). In this latter case, a water corporation sold surplus water to a limited number of residents in Boise. Even though the company received compensation for the sale of its water, it did not serve all customers that applied. See also Public Utilities Commission v. Natatorium Company, 36 Idaho 287, 211 P. 533 (1922).
Applying the facts set out in the Petition to the holdings of these cases leads the Staff to conclude that LLP’s leasing of locomotive engines does not constitute the provision of utility service to the public. Indeed, merely leasing railroad engines to operating railroads would not make LLP a railroad corporation under the Public Utilities Law. Idaho Code §§ 61-107 and 61-110. Consequently, it is Staff’s opinion that based upon the representations made in the Petition, LLP should not be subject to the Commission’s regulation.
In summary, based upon the fact presented in LLP’s Petition, the Staff believes that the leasing of locomotive engines to produce power does not subject LLP to the Commission’s regulatory jurisdiction under Idaho Code, Title 61. The Staff further recommends that the requested Declaratory Order be limited to the set of facts contained in LLP’s Petition.
RESPECTIVELY submitted this day of July 2001.

Donald L. Howell, II
Deputy Attorney General

vld/N: GNR-E-01-1_dh

COMMENTS OF THE
COMMISSION STAFF 3