20030925Final Order No 29336.pdf

Office of the Secretary
Service Date
September 25, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
THE CITY OF HEYBURN AND RIVERSIDE
ELECTRIC COMPANY FOR AN ORDER
APPROVING A SERVICE TERRITORY
AGREEMENT PURSUANT TO IDAHO CODE
~ 61-333(1).ORDER NO. 29336
CASE NO. GNR-O3-
On July 3, 2003, the City of Heyburn and Riverside Electric Company filed an
Application for approval of their "Service Area Stabilization Agreement." Both parties are
classified as electric "suppliers" under the Electric Supplier Stabilization Act (ESSA), Idaho
Code 99 61-332 et seq. In Order No. 29304 the Commission issued a Notice of Modified
Procedure soliciting public comment on the Parties' Agreement. The Commission Staff
submitted the only comment and it recommended approval. After reviewing the Agreement and
the Staff comments, we approve the Application.
THE APPLICATION
The Parties executed their ESSA Agreement on May 14, 2003. The Parties state in
their Agreement that they had a pre-existing oral understanding relative to their respective
service areas and now wish to reduce these understandings to writing. Agreement at ~ 1.3. As
more specifically described in Exhibit A to the Agreement, Riverside s service territory
generally is located north and east of the City s service territory. The Agreement calls for each
party to serve all new customers in their respective service territories. Id. at ~ 2.
The Agreement also provides that the Parties will exchange two customers - one
from Riverside to the City and the other from the City to Riverside. The Agreement states that
these two customers have been contacted regarding the proposed transfer and the "customers
have expressed no objection to the change of electric provider. . . .Id. at ~ 3; Exhibit C. These
customers will not be charged any connection or disconnection fees and all costs to accomplish
the change in service provider shall be borne by the Parties. !d.
The Agreement also notes that Riverside has acquired a 12.5 KV distribution line
owned by the City. Id. at ~ 4. The Parties further agree that this line shall not be considered a
ORDER NO. 29336
service line" for purposes of determining which electric supplier may serve a new customer
pursuant to !daho Code 9 61-332c.
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.
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.
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
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.61-334B.
In proposing to exchange the two existing customers, the parties in essence request an
exception" to the anti-pirating provision of the ESSA. See Idaho Code 99 61-332B and 61-
334B(1). Pursuant to Idaho Code 9 61-334B(1) the Commission may only grant an exemption to
the anti-pirating provision "upon finding that granting the request is consistent with the purposes
of (the ESSA)."
STAFF COMMENTS
Staff recommended that the Commission approve the Agreement. Staff noted the
Agreement appears to provide the least cost service option for customers and complies with the
ESSA by creating boundaries that partition each supplier s service territory. Staff also reported
that the exchange of the two customers has already taken place. Given that the exchange has
ORDER NO. 29336
already occurred, the Staff noted that granting an "exception" to the anti-pirating provision of the
ESSA appears reasonable. Idaho Code 9 61-334B(1).
Staff also addressed one other issue contained in paragraph 6 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 !daho Code 9 61-334B provided that any
supplier whose rights under the ESSA are in jeopardy, may bring suit in district court. !daho
Code 9 61-334A now provides an aggrieved customer or supplier "may file a complaint with the
commission" and the Commission shall resolve the matter. See !daho 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 s fees other than intervenor funding
pursuant to !daho Code 9 61-617 A.
FINDINGS
Having reviewed the Parties
' "
Service Area Stabilization Agreement" and the Staff s
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. There were no opposing comments.
We further find that the exchange of the two customers is consistent with the
purposes of the ESSA. Given that the customers did not object, that all costs associated with the
connection and reconnection of service were borne by the Parties, and that the transfer has
already taken place, it is appropriate to grant an exception. Consequently, we find that it
reasonable to grant an exception to the anti-pirating provision of Idaho Code 961-332B. See
Idaho Code 99 61-334B(1); 62-333(1).
Staff also made one other comment that merits discussion. The Staff observed that
paragraph 6 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
authorized the Commission to resolve ESSA disputes. See Idaho Code 961-334A. Without
ORDER NO. 29336
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 to approve a "Service Area
Stabilization Agreement" executed by the City of Heyburn and Riverside Electric Company is
approved.
IT IS FURTHER ORDERED that the Commission grants the Parties an exception to
the anti-pirating provision of the ESSA pursuant to !daho Code 9 61-334B.
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-03-11 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-03-11. Within seven (7) days after any person has
petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code 99 61-626, 61-334B(3).
ORDER NO. 29336
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of September 2003.
~~T
SHA H. SMITH, COMMISSIONER
ATTEST:
*'
AJ . 'f-ilJe D. Jewell
Commission Secretary
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ORDER NO. 29336