29044.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF UNITED ELECTRIC CO-OP, INC. FOR APPROVAL OF AN AGREEMENT PURSUANT TO IDAHO CODE § 61-333. )
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) CASE NO. GNR-E-02-3

ORDER NO. 29044

On May 6, 2002, United Electric Co-op, Inc. (United) filed an Application notifying the Commission of United’s intent to purchase the City of Heyburn’s municipal electric system. The Application was made pursuant to the Idaho Electric Supplier Stabilization Act (ESSA) and specifically Idaho Code § 61-333. On May 13, 2002, the Commission issued a Notice of Application and Notice of Modified Procedure requesting comments in this matter be filed no later than May 28, 2002. Only the Commission Staff submitted comments. After reviewing the Application and the Staff’s comments, we approve the transfer.
THE APPLICATION
United was formed in 1998 when the Rural Co-op was consolidated with Unity Light and Power. App. at 2. United is a cooperative electric supplier within the meaning of the ESSA. United provides services to its members in Minidoka and Cassia Counties. Its principal office is located in Heyburn. The City of Heyburn is an Idaho municipal corporation and is an electric supplier within the meaning of the ESSA. The City has owned and operated its electrical distribution system for many years and serves approximately 1,300 customers.
Heyburn has determined that it would be in the best interest of its citizens to transfer the City’s electric system to United. Following the transfer, Heyburn would cease to provide service to its customers and United would provide service to all of Heyburn’s current and future customers. The parties have reached an agreement and the City Council has approved the transfer. The transfer will be put to Heyburn’s voters in a special election on August 6, 2002.
The parties asserted that the Agreement is in the public interest. More specifically, the Application states that the Transfer Agreement promotes harmony among and between electric suppliers and discourages duplication of facilities. In addition, the Agreement stabilizes the territories and consumers served by electric suppliers. Heyburn and United have had a territory agreement for a number of years.
Given the limited scope of this transaction and the agreement of the parties, United requested that this matter may be appropriately handled under Modified Procedure. In order to finalize this transaction in an expedited basis, United suggested that the comment period be shortened to 14 days from the date of the Commission’s Notice.
THE STABILIZATION ACT
Idaho Code § 61-333 provides that all agreements which allocate territory or customers between electric suppliers such as United and the City be filed with the Commission. Section 61-333(1) provides that electric suppliers may contract in writing “for the purpose of allocating territories, consumers and future consumers between the electric suppliers and designating which territory and consumers are to be served by which contracting electric supplier.” This section further provides that all such contracts shall be filed with the Commission. Id. After notice and opportunity for hearing, the Commission shall approve or reject contracts between municipalities and cooperatives. This section and Idaho Code § 61-334(1) restricts the Commission’s jurisdiction over cooperatives and municipalities to that authorized in the ESSA. For example, the Commission neither sets the rates nor prescribes the customer service rules for co-ops and municipalities.
As set out more fully in Idaho Code § 61-332, the purposes of the ESSA are to: (1) promote harmony among and between electric suppliers; (2) prohibit the “pirating” of consumers served by another supplier; (3) discourage duplication of electric facilities; (4) stabilize the territory and consumers served by the suppliers; and (5) actively supervise certain conduct of the suppliers.
STAFF COMMENTS
Based upon the assertions contained in the Application, the Staff commented that the Transfer Agreement is in the public interest. The Staff maintained that the transfer of the City’s system will discourage duplication and stabilize the territories and consumers served by United. The Staff observed that United had managed the City’s electric system since July 2000. In addition, the Staff noted that adding the City’s 1,300 customers will increase United’s customer base to a total of 6,900 customers. “This will provide an improved economy of scale to United.” Comments at 2.
DISCUSSION
After reviewing the Application and the comments, we find that the Agreement comports with the goals of the ESSA set out in Idaho Code § 61-332. Transfer of the City’s system to United will discourage duplication of service and stabilize the territories and consumers served by United. We also agree with the Staff that adding the City’s customers to United’s customer base will improve the economy of scale afforded to United. Consequently, the Commission approves the Application.
O R D E R
IT IS HEREBY ORDERED that the Application filed by United Electric Co-op, Inc. is approved. The Commission understands that the Agreement is to be submitted to the City’s voters on August 6, 2002.
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. GNRE023 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-02-3. 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 June 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:GNRE0203_dh2

ORDER NO. 29044 4

Office of the Secretary
Service Date
June 10, 2002