20031008Final Order No 29348.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
CITY OF RUPERT FOR AN ORDER
APPROVING A SERVICE TERRITORY
AGREEMENT PURSUANT TO IDAHO CODE
~ 61-333(1).ORDER NO. 29348
CASE NO. GNR-O3-
On June 20, 2003, United Electric Co-op and the City of Rupert filed an Application
for approval of their service territory agreement pursuant to the Idaho Electric Supplier
Stabilization Act (ESSA), codified at Idaho Code gg 61-332 et seq. United is the successor co-
op entity following the consolidation of Rural Electric Company and Unity Light & Power. Both
United and the City supply electric service to their respective consumers in adjacent and
contiguous service territories.
In Order No. 29281 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
the Agreement and the Staff comments, we approve the Application as conditioned below.
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 g 61-332. 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 g 61-332A(5).
Idaho Codeg 61-333(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. Idaho Code g 61-333(1). This
ORDER NO. 29348
section further provides that the Commission may, after notice and opportunity for hearing,
approve or reject contracts. . . 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. /d., Idaho Code g 61-334B.
Idaho Code g 61-334B(1) also allows the Commission to grant an exception to the
anti-pirating provision of the ESSA found at Idaho Code g 61-332B. Before granting such an
exception, the Commission must find "that granting a request is consistent with the purposes of'
the ESSA.
THE APPLICATION
The parties ask that the Commission approve their "Service Area Agreement" and its
amendment dated April 2, 1985 and May 6 2003, respectively. In the 1985 Agreement, United'
predecessor Rural Electric and the City agreed to establish a separate service territory for each
party in Minidoka County. The Agreement also addresses the exchange of customers and
facilities resulting from the allocation of the two service territories. Exhibit No.1 at ~ 2.
Paragraph 2 states that if a supplier is providing service to an existing customer located in the
other supplier s newly allocated territory, the "withdrawing party shall disconnect its service
from each consumer in the relinquished territory when the acquiring (supplier) is prepared to
connect said consumer to its system. . . . The parties shall cooperate with one another. . . to
avoid inconvenience to the affected consumers.
The Agreement also discusses the relinquishment and transfer of all easements and
right-of-ways in the other supplier s territory. However, the parties may reserve such easements
and right-of-ways necessary to provide service to their consumers. Id. at ~ 4. The Agreement
provides that if the City annexes land that lies within United's service area, then United shall be
allowed to continue to serve "existing future consumers in said service territory. (T)he City
agrees that it will not exercise the power of condemnation... as to any of (United's) service area
as established under this Agreement....Id. at ~ 3.
In the 2003 amendment, the parties modified the initial Agreement by changing the
boundary line dividing the parties' service territories. Exhibit No.2. The amendment also
identified two customers "who are in close proximity to the service area of the City of Rupert
and (they) may continue to be served by United, if in fact they are in the Rupert service area.
ORDER NO. 29348
Amendment at 2. All other terms and conditions of the initial Agreement remain in full force
and effect.
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 the initial Agreement predated
the 2000 and 2001 amendments to the ESSA, the parties now request that the Commission
approve the Service Area Agreement. 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 ~
STAFF COMMENTS
Staff recommended approval of the 1985 Agreement and its amendment. Staff noted
that the Agreement appears to provide the least-cost service option for customers and complies
with the ESSA by drawing boundary lines that identify each utility s service territory. Although
the Agreement provides for the orderly exchange of customers who were initially in the other
party service area, Staff did not know whether the exchanges had been completed.
Nevertheless , Staff believed that the Agreement contained in the Application would support the
granting of an exception to the anti-pirating provision of the ESSA.
Staff also addressed one other issue contained in paragraph 17 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 g 61-334B provided that
any supplier whose rights under the ESSA are in jeopardy, may bring suit in district court. Idaho
Code g 61-334A now provides an aggrieved customer or supplier "may file a complaint with the
commission" and the Commission shall resolve the matter. See Idaho Code gg 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 s fees other than intervenor funding
pursuant to Idaho Code g 61-617 A.
ORDER NO. 29348
FINDINGS
Having reviewed the Parties
' "
Service Area Stabilization Agreement " the 2003
amendment and the Staffs supporting comments, we find it is reasonable to approve the
Application and Agreement. We find the Agreement is consistent with the purposes of the
ESSA. More specifically, 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. There were no opposing comments.
Because no customer transfer or exchange has taken place pursuant to paragraph 2, an
exception from the anti-pirating provisions of the ESSA is not necessary at this time. If and
when a transfer of customers between the parties is contemplated, we find that it is appropriate
for the affected customers to be notified in advance of the proposed transfer. We further find
that it is appropriate that the parties seek to obtain the consent of the customers who are to be
transferred from one supplier to another. We believe that informing customers is an appropriate
condition prior to formally considering whether an exception from the anti-pirating provision is
warranted. See Idaho Code g 61-334B(1), (2).
Staff also made one other comment that merits discussion. The Staff observed that
paragraph 17 of the Agreement provides that the prevailing party in any legal action is entitled to
recover reasonable attorney fees. As Staff noted, the 2000 and 2001 amendments to the ESSA
remove resolution of ESSA disputes from the district courts and authorize the Commission to
resolve these disputes. See Idaho Code g 61-334A. Without reforming the contract, we note that
the Commission does not have authority to award attorney fees other than as provided by Idaho
Code g 61-617A.
ORDER
IT IS HEREBY ORDERED that the Application filed by United Electric Co-op and
City of Rupert to approve a "Service Area Stabilization Agreement" dated April 2, 1995 and the
amendment dated May 6 2003 , are approved as conditioned above.
IT IS FURTHER ORDERED that before filing an application for a transfer of
customers and for an exception to the anti-pirating provision of the ESSA, that the affected
customers be notified of the suppliers ' desire to exchange customers. An exception application
shall disclose whether the affected customers consent to the transfer.
ORDER NO. 29348
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 gg 61-
626, 61-334B(3).
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
?/-fI-
day of October 2003.
-(1
MARSHA H. SMITH, COMMISSIONER
ATTEST:
bls/O:GNRE0309 dh2
ORDER NO. 29348