20030725Comments.pdf

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DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3366
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
UNITED ELECTRIC CO-OP, INC. AND THE
RAFT RIVER RURAL ELECTRIC
COOPERATIVE, INc. FOR AN ORDER
APPROVING A SERVICE TERRITORY
AGREEMENT PURSUANT TO IDAHO CODE
~ 61-333(1).
CASE NO. GNR-O3-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Donald L. Howell, II, Deputy Attorney General, and submits the following
comments in response to Order No. 29287 issued on July 9 2003.
APPLI CA TI 0 N
On June 20, 2003, United Electric Co-op, Inc. and the Raft River Rural Electric
Cooperative, Inc. filed an Application for approval of their Service Territory Agreement pursuant
to the Idaho Electric Supplier Stabilization Act (ESSA). United is the successor entity following
the consolidation of Rural Electric Company and Unity Light & Power. United and Raft River are
both electric non-profit corporations organized under the laws ofldaho. United and Raft River are
defined as "electric supplier(s)" under the ESSA. Idaho Code ~ 61-332A(2 4).
STAFF COMMENTS JULY 25 , 2003
United and Raft River supply electric service to their respective consumers in adjacent and
contiguous service territories. Prior to the 2000 amendments of the ESSA, the parties had "an oral
understanding relative to the respective service areas" of each electric supplier. Exhibit No.1 to
the Application, ~ 1.3. On May 28 2003 , they entered into a "Service Area Stabilization
Agreement" thereby reducing their respective understandings to writing. The Agreement
establishes separate service territories for each party. Each party is responsible for serving all new
customers in their defined service areas. Id. 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 No.1 to the
Agreement.
The Agreement also states that there may be instances where it is more efficient for a new
customer located in one service territory to be served by the other electric supplier. In such cases
the parties may execute
a written agreement to permit the service of a new customer by (the) party
whose distribution system is located in the service area of the other
(supplier), if the new customer can be served more efficiently and safely
from the existing service lines of the non-service area party or by the
extension of existing service lines of the non-service party. Such agreement
shall be in writing, authorized by the respective governing board of each
party, and when executed shall be appended to this Agreement. The
entering into such agreement is discretionary with either party and neither
party shall have the right of action against the other for its exercise of such
discretion.
Id. at ~ 6.
The Application states that the Agreement was negotiated to settle and establish service
territories between the parties, to provide stability and safety in service to consumers, and to
eliminate duplication of services. Application at ~ 3. Because their oral agreements predate the
2000 amendments to the ESSA, the parties now request that the Commission approve their
Service Area Stabilization Agreement.
STAFF COMMENTS
In December 2000 and February 2001 , the Idaho Legislature amended portions of the
ESSA. In particular Idaho Code ~ 61-333 was amended to provide that all service agreements
STAFF COMMENTS JULY 25, 2003
that allocate territory or customers between electric suppliers be filed with the Commission. Idaho
Code ~ 61-333(1) now provides in pertinent part that
the commission shall after notice and opportunity for hearing, review and approve
or rej ect (such) contracts between 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 this act.
Idaho Code ~ 61-333(1) (2001). 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.
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 believes that the Agreement contained in this Application fulfills the purposes and provisions
of the ESSA that have been previously stated.
Finally, Staff notes that Paragraph 5 of the Agreement provides that the prevailing party in
any action arising under the Agreement is entitled to recover reasonable attorney fees. Prior to the
aforementioned modifications to the ESSA Idaho Code ~ 61-334B provided that any supplier
whose rights under the ESSA are in jeopardy, may bring suit in district court. This section was
repealed and amended in December 2000 and February 2001.
Idaho Code ~ 61-334A now provides that an aggrieved customer or supplier "may file a
complaint with the commission" and the Commission shall resolve the matter. See Idaho Code
61-334A(2-3); 61-334B(3). In other words, resolution of disputes was removed from the court'
jurisdiction and was to be submitted to the Commission. Under the Public Utilities Law, the
Commission does not have authority to award attorney fees other than intervenor funds pursuant
to Idaho Code ~ 61-617A. See Idaho Power Company v. Idaho PUC 102 Idaho 744 639 P.2d
442 (1981).
STAFF COMMENTS JULY 25 , 2003
STAFF RECOMMENDATION
Staff recommends approval of the Agreement.
Respectfully submitted this
Technical Staff: Keith Hessing
i: :umisc/comments/gnrtO3 ,6dhkh
STAFF COMMENTS
26~day of July 2003.
Donald L. well, II
Deputy Attorney General
JUL Y 25 , 2003
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25TH DAY OF JULY 2003
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE
NO. GNR-03-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
WILLIAM A PARSONS
P ARSONS SMITH & STONE LLP
PO BOX 910
BURLEY ID 83318
MAILED TO:
wparsons(fYpmt.org
JERRY R RIGBY
RIGBY THATCHER ANDRUS RIGBY KAM
& MOELLER
PO BOX 250
REXBURG ID 83440-0250
MAILED TO:
j rigby(fYrigby -thatcher. com
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SECRETARY
CERTIFICATE OF SERVICE