20030724Comments.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
RIVERSIDE ELECTRIC COMPANY, LTD FOR
AN ORDER APPROVING A SERVICE
TERRITORY AGREEMENT PURSUANT TO
IDAHO CODE ~ 61-333(1).
CASE NO. GNR-O3-
STAFF COMMENTS
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. 29284 issued on July 8, 2003.
APPLICATION
On June 20 2003, United Electric Co-op, Inc. and Riverside Electric Company filed an
Application for approval of a 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. Both Cooperatives supply electric service to
their respective consumers in adjacent and contiguous service territories.
On April 21 , 2003, United and Riverside entered into their Stabilization Agreement. The
Agreement establishes separate service territories for each party. Each party is responsible for
serving all new customers in their defined service areas. Exhibit No. I at ~ 2. To the extent that
either party is currently providing services to consumers within the service area assigned to the
other party, the existing supplier shall continue to serve these pre-existing customers. !d. at ~ 3.
STAFF COMMENTS JULY 24, 2003
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 enter
into 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 J
. . ..
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 the exercise of such discretion.
Id.at~7.
The parties also agreed that Riverside may construct an "express feeder" within United'
territory. The parties agreed that construction of the express feeder "shall not be construed as to
allow Riverside to hook up new customers in that area, but is limited to the construction
operation and maintenance of an express feeder. . .. The construction, maintenance and operation
of any express feeder shall be subject to United's specifications for clearance and other
construction." Exhibit No.1 at ~ 4. Finally, Exhibit No.2 and 3 to the Agreement contain the
names of Riverside and United consumers that are located in the territory of the other party or
are in close proximity to the territory of the other party. As recited in Paragraph the parties
will use good faith efforts to exchange the customers so that the named customers are in the
defined territory of each party. Absent an exchange the parties agree that the members may exist
in the territory of the other until such time as events allow for the trade (of such customers J.
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. Applications at ~ 3. Because the oral agreement predates 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
that allocate territory or customers between electric suppliers be filed with the Commission.
STAFF COMMENTS JULY 24, 2003
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 J 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.
The Agreement also provides
To the extent that either party is currently providing service to customers
within the service area assigned to the other party by this agreement, said
parties shall continue to serve said customer.
Id. at ~ 3; Exhibit Nos. 2 and 3.
However, Paragraph 11 of the Agreement says that Exhibit 2 contains the names of
customers, which the two utilities agree to try to exchange. The service area agreement is only
three months old and the exchange of the three customers identified has not yet taken place.
United indicated to Staff that it normally obtains the consent of the customer before switching
suppliers. Staff believes that customer consent should be obtained as a condition before
authorizing a switch in suppliers. With this condition, granting an exception to the anti-pirating
provision of the ESSA appears reasonable when considering the purposes of the ESSA. Idaho
Code ~ 61-334B(1).
Finally, Staff notes that Paragraph 6 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.
STAFF COMMENTS JUL Y 24, 2003
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's 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 RECOMMENDATION
Staff recommends approval of the Agreement.
Respectfully submitted this zt/~
Technical Staff: Keith Hessing
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STAFF COMMENTS JULY 24, 2003
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 24TH 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~pmt.org
GOODMAN & BOLLAR
PO BOX D
RUPERT ID 83350
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CERTIFICATE OF SERVICE