20031008Final Order No 29340.pdf

Office of the Secretary
Service Date
October 8, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
UNITED ELECTRIC CO-, INc. AND THE
EAST END MUTUAL ELECTRIC COMPANY
L TD FOR AN ORDER APPROVING A SERVICE)
TERRITORY AGREEMENT PURSUANT TO
IDAHO CODE ~ 61-333(1).
CASE NO. GNR-03-
ORDER NO. 29340
On June 20, 2003 , the United Electric Co-op, Inc. and East End Mutual Electric
Company, Ltd. filed an Application for approval of their "Service Area Stabilization
Agreement." This Agreement was entered into pursuant to the Electric Supplier Stabilization
Act (ESSA) codified at Idaho Code 99 61-332 et seq. United is the successor co-op entity
following the consolidation of Rural Electric and Unity Light & Power.
In Order No. 29284 the Commission issued a Notice of Modified Procedure soliciting
public comment on the Parties' Agreement. The Commission Staff submitted the only comment
and recommended the Commission approve the Application. After reviewing the Application
Agreement and the Staff comments, we approve the Application.
THE ESSA
The purpose of the ESSA is to promote harmony among and between electric
suppliers furnishing electricity within Idaho. More specifically, the ESSA: (1) prohibits the
pirating" of consumers already served by another supplier; (2) discourages duplication of
electric facilities; (3) actively supervises certain conduct of electric suppliers; and (4) stabilizes
the territories and consumers served by such electric suppliers. Idaho Code 961-332. Under the
ESSA, an "electric supplier" is any public utility, cooperative, or municipality supplying or
intending to supply electric service to a consumer. Idaho Code 961-332A(5).
Idaho Code 961-333(1) provides that any electric supplier may contract with any
other electric supplier for the purpose of "allocating territories, consumers, and future consumers
. . .
and designating which territories and consumers are to be served by which contracting
electric supplier." Under the ESSA, all agreements or contracts for the allocation of service
territories or consumers shall be filed with the Commission. This section further provides that
the Commission may, after notice and opportunity for hearing, "approve or reject contracts
ORDER NO. 29340
between municipalities and cooperatives. . .." 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' the ESSA. Id.; Idaho Code 9 61-334B.
THE APPLICATION
The Parties state that they had a pre-existing oral agreement regarding the allocation
of territories and customers. The Parties reduced their oral agreements to writing and executed
their Stabilization Agreement on May 30, 2003. Each party is responsible for serving all new
customers in their defined service areas. Exhibit 1 at ~ 2. To the extent that either party is
currently providing service to consumers within the service area assigned to the other party, the
existing supplier shall continue to serve these pre-existing customers. Id. at ~ 3; Exhibit 2.
The Agreement recognizes that United has a substation located in the East End
service territory. The parties agree that United is entitled to leave "the substation in the East End
territory without being in violation of the Agreement, provided however, United shall not expand
its customer base in the East End territory.Id. at ~ 11.
The Parties assert that their Agreement comports with the purposes of the ESSA.
More specifically, their Agreement provides for stability of services to consumers, eliminates
duplication of facilities, and promotes the public safety in their respective service territories.
Application at ~ 3.
STAFF COMMENTS
Staff recommended approval of the Agreement and made one observation. Staff
asserted that the Agreement appears to provide the least cost service option for customers and
complies with the ESSA by drawing boundaries that partially identify each supplier s service
territory. Staff also recognized that the Agreement provides that customers located in other
supplier s service territory may continue to be served by their existing supplier. Id. at ~ 3;
Exhibit 2.
Staff also addressed one other issue contained in paragraph 5 of the Agreement. This
paragraph provides that the prevailing party in any legal action arising under the Agreement be
entitled to recover reasonable attorney s fees. Staff explained that prior to the amendments to the
ESSA enacted in December 2000 and February 2001 Idaho Code 9 61-334B provided that any
supplier whose rights under the ESSA are in jeopardy, may bring suit in district court. Idaho
Code 9 61-334A now provides an aggrieved customer or supplier "may file a complaint with the
ORDER NO. 29340
commission" and the Commission shall resolve the matter. See Idaho Code 99 61-334A(2-3);
61-334B(3). In other words, the resolution of disputes was removed from the jurisdiction of the
Courts and is to be submitted to the Commission. Under the Public Utilities Law, the
Commission does not have authority to award attorney fees other than intervenor funding
pursuant to Idaho Code 9 61-617 A.
FINDINGS
Having reviewed the Parties
' "
Service Area Stabilization Agreement" and the Staffs
supporting comments, we find it is reasonable to approve the Application and Agreement. More
specifically, we find the Agreement is consistent with the purposes of the ESSA. In particular
we find that it promotes harmony among the electric suppliers, discourages duplication of
facilities, and in particular, stabilizes the territories and consumers served by these two electric
suppliers. We also note that there were no opposing comments.
Staff also made one other comment that merits discussion.Staff observed that
paragraph 5 of the Agreement provides that the prevailing party in any legal action is entitled to
recover reasonable "attorney fees and costs." As Staff noted, the 2000 and 2001 amendments to
the ESSA remove resolution of ESSA disputes from the district courts and authorizes the
Commission to resolve these disputes. See Idaho Code 961-334A. Without reforming the
contract, we note that the Commission does not have authority to award attorney fees other than
as provided by Idaho Code 9 61-617 A.
ORDER
IT IS HEREBY ORDERED that the Application filed by United Electric Co-op and
East End Mutual Electric Company to approve a "Service Area Stabilization Agreement" dated
May 30 2003 , is approved.
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. GNR-03-
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-03-Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code 9961-
626, 61-334B(3).
ORDER NO. 29340
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ff""
()c."'Qb~r
day of Septembc:r 2003.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~ll
Commission Secretary
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ORDER NO. 29340