20030909Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:SEPTEMBER 4, 2003
RE:APPLICATION FOR APPROVAL OF A SERVICE AREA STABILIZATION
AGREEMENT FILED BY THE CITY OF HEYBURN AND RIVERSIDE
ELECTRIC COMPANY, CASE NO. GNR-03-
On July 3 , 2003, the City of Reyburn and Riverside Electric Company filed an
Application for approval of their "Service Area Stabilization Agreement." Both parties are
classified as "suppliers" under the Electric Supplier Stabilization Act (ESSA).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.
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 of the work
done to accomplish the change in service provider shall be borne by the Parties. Id.
DECISION MEETING
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
service line" for purposes of determining which electric supplier may serve a new customer
pursuant to Idaho Code g 61-332C.
The Parties assert that their Agreement comports with the purposes of the Electric
Supplier Stabilization Act (ESSA) codified at Idaho Code g 61-332. More specifically, their
Agreement provides for stability of services to consumers, eliminates duplication of services, and
promotes public safety in their respective service territories. Application at ~ 3.
ST AFF COMMENTS
Staff recommended that the Commission approve the Agreement. Staff reported that
the exchange of the two customers has already taken place. Given that the exchange has already
occurred, the Staff noted that granting an "exception" to the anti-pirating provision of the ESSA
appears reasonable. Idaho Code g 61-334B(1).
Staff also noted that the Agreement appears to provide the least cost service option
for customers and complies with the ESSA by creating boundaries that partition each supplier
service territory.
Staff also addressed one other issue contained in ~ 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 in its comments 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 that 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.
In summary, the Staff recommends that the Commission grant an exception to the
ESSA's anti-pirating provision and allow the switch of the two customers pursuant to Idaho
Code g 61-334B(1). The Staff also recommends that the Commission find that the Agreement to
DECISION MEETING
allocate service territories meets the purposes and provisions of the ESSA set out at Idaho Code
g 61-332(2). See Idaho Code g 61-333(1).
COMMISSION DECISION
Does the Commission find it reasonable to grant an exception from the ESSA's anti-
pirating provision? Does the Commission find that the Agreement to allocate service territory
between the City of Reyburn and Riverside Electric Company consistent with the provisions and
purposes of the ESSA? Anything else?
Don Rowell
VldlM:GNREO311 dh3
DECISION MEETING