20030627Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSIO NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:JUNE 27, 2003
RE:EIGHT APPLICATIONS FOR APPROVAL OF SERVICE TERRITORY
AGREEMENTS BETWEEN UNITED ELECTRIC CO-OP AND THREE
CITIES AND FIVE CO-OPS, CASE NOS. GNR-03-3/4/5/6/7/8/9110
On June 20, 2003, United Electric Co-op and eight other parties filed eight
Applications for approval of their respective Service Territory Agreements pursuant to the
Electric Supplier Stabilization Act (ESSA). The eight other parties include three cities (the cities
of Rupert, Reyburn, and Burley) and five electric cooperatives (Riverside Electric Company,
Southside Electric, Farmers' Electric Company, Raft River Rural Electric Cooperative , and East
End Mutual Electric Company). United is the successor following the consolidation of Rural
Electric and Unity Light & Power.
For the three Applications with the cities, the parties had written Service Territory
Agreements with United that pre-dated the 2000 amendments to the ESSA. In the five Co-op
Applications, the parties state that they had pre-existing oral agreements that they have now
reduced to writing.
All parties assert that their Service Territory Agreements comport with the purposes
of the ESSA. More specifically, the parties assert that their Service Territory Agreement provide
for stability of service to consumers, eliminate duplication of services, and provide for the safety
in their respective territories. Applications at 2.
DECISION MEMORANDUM
THE CITY APPLICATIONS
1. The City of Burley United and Burley ask the Commission to approve a
Territory Service Agreement" dated May 21 , 1985 and two subsequent amendments dated
November 19, 1996 1 and May 6 2003 , respectively.
2. The City of Reyburn. United's predecessor Rural Electric and the City of
Reyburn entered into a "Service Area Stabilization and Wheeling Agreement" dated February
, 1996.
3. The City of Rupert. On April 2, 1985 , the City of Rupert and Rural Electric
entered into a Service Area Agreement. On May 6, 2003 , the parties amended their underlying
Agreement to establish a boundary line for allocating territories, consumers and future
consumers. The amendment also notes that there were two customers in the proximity to the
Rupert service area. The parties agreed that these two customers may continue to be "served by
United, ifin fact they are in the Rupert service area.
THE CO-OP APPLICATIONS
1. East End Mutual Electric Company East End is an electric non-profit
corporation organized under the laws ofldaho. East End and United have adjacent service areas.
Prior to the 2000 amendments of the ESSA, the parties "had an oral understanding relative to the
respective service areas" of each electric supplier. On May 30, 2003, the parties entered into a
Service Area Stabilization Agreement" thereby reducing their "respective understandings" to
writing.
2. Farmers Electric Company.Farmers is an electric non-profit corporation
organized under the laws of Idaho. Like East End, Farmers had an oral understanding with
United regarding their respective service areas. On April 23, 2003, the parties reduced their
respective understandings to writing. The parties now seek to have their "Service Area
Stabilization Agreement" approved by the Commission.
3. Raft River Rural Electric Cooperative. Raft River also had an oral understanding
with United regarding their adjacent and contiguous service territories. On May 28, 2003, the
parties reduced their respective understandings to writing and executed a "Service Area
1 The flISt amendment (identified as Exhibit No.2) is actually a Service Area Agreement entered into between Rural
Electric Company and the City of Burley. As previously mentioned, United is the successor to Rural Electric. This
Agreement superseded a Service Area Agreement between Burley and Rural Electric dated June 6, 1988.
DECISION MEMORANDUM
Stabilization Agreement." The Service Area Agreement shall be effective upon approval by the
Commission.
4. Riverside Electric Company Riverside Electric is an electric non-profit
corporation organized under the laws of Idaho.In recent years, the parties had an oral
understanding regarding their respective service areas. On April 21 , 2003 , the parties reduced
their respective understandings to writing and executed a "Service Area Stabilization
Agreement. "
Southside is an electric non-profit corporation organized5. Southside Electric.
under the laws of Idaho. In recent years, it too had an oral understanding with United regarding
their respective service territories, which are adjacent and contiguous to each other. On May 30
2003, the parties reduced their respective understandings to writing and executed a "Service Area
Stabilization Agreement."
All the Service Territory Agreements and their accompanymg maps and/or
descriptions are available for your review.
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 an
electric facilities; (3) actively supervises certain conduct of electric suppliers; and (4) stabilizes
the territories and consumers served by such electric suppliers. Idaho Code ~ 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 ~ 61-332A(5).
Idaho Code ~ 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.This section further provides that the Commission may, after
notice and opportunity for hearing, "approve or reject contracts between cooperatives,... (and)
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 this act." Id.
DECISION MEMORANDUM
STAFF RECOMMENDATION
Given the respective Agreements of the parties, Staff recommends that the
Applications be processed individually under Modified Procedure.
COMMISSION DECISION
Does the Commission concur that these Applications should be processed
individually under Modified Procedure?
Don Rowell
Vld/M:GNREO303-
DECISION MEMORANDUM