20070803reconsideration_order_no_30396.pdf

Office of the Secretary
Service Date
August 3 , 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROV AL OF AN AGREEMENT
BETWEEN A VIMOR, LLC AND IDAHO
POWER TO PROVIDE ELECTRIC
TRANSMISSION AND SUBSTATION
FACILITIES TO THE AVIMOR MULTI-USE
DEVELOPMENT
CASE NO. IPC-06-
ORDER NO. 30396
On September 27, 2006, Idaho Power Company filed an Application requesting
approval of a "Special Facilities Agreement" the Company signed with Avimor, LLC. The
Agreement is for the construction of transmission and substation facilities to serve a large, multi-
use residential subdivision developed by Avimor. As initially submitted to the Commission, the
Agreement required A vimor to pay Idaho Power the construction cost of $4.3 million for the
facilities but A vimor is eligible to receive a refund of its entire advance based upon the number
of customers subsequently connected to the facilities, or the amount of electric demand at the
development's delivery point.
On May 24, 2007, the Commission issued final Order No. 30322 and found that the
Agreement as written "places too great a financial burden on Idaho Power s existing ratepayers.
The Commission stated that it would approve the Special Facilities Agreement if it were revised
to meet the concerns identified in the Commission s final Order. On June 14, 2007, Avimor
submitted a timely Petition for Reconsideration. In its Petition, Avimor requested reconsideration
by written brief and requested that it be given until June 29, 2007 to file its brief. IDAP A
31.01.01.331.03. In Order No. 30372 the Commission granted reconsideration so that it could
consider A vimor' s brief.
Having completed our review of A vimor' s reconsideration brief and the record in this
case, the Commission issues this reconsideration Order. As set out below, A vimor s Petition is
granted in part and denied in part.
BACKGROUND
A. The Development and the Special Facilities Agreement
A vimor is developing a large, multi-use residential subdivision several miles north of
the communities of Boise and Eagle. The A vimor property consists of approximately 23 000
ORDER NO. 30396
acres located in Ada, Boise, and Gem Counties. Application, Exh. 2, Figure 1; Order No. 30345
at 1. In the initial phase, Avimor will develop about 685 residential units and 75 000 square feet
of commercial space on 830 acres. Avimor Reply Comments at 4. Thus, the initial phase is
about 4% of Avimor s property. Additional phases of development will follow as demand
presents.
Because Idaho Power has neither the existing facilities of adequate capacity nor the
desired phase and voltage to serve the A vimor development, the parties entered into a "Special
Facilities Agreement" (Agreement or SF A). Pursuant to the Agreement, Idaho Power will
construct 3.5 miles of 138 kV transmission line (at a cost of $2.1 million) and an expandable
substation with an initial capacity 10 MV A (at a cost of $2.2 million). The transmission line and
substation are larger than necessary to serve just the first phase of the development. SF A, Exh.
1.1 The parties' Agreement required Avimor to advance the $4.3 million for the transmission
and substation facilities and provided a formula by which A vimor would receive refunds up to
the $4.3 million amount. Section 4.2 of the Agreement stated that A vim or shall be eligible to
receive periodic refunds as customers take service for:
(a) a period often (10) years;
(b) until 685 permanent residential customers have been connected by
Idaho Power; or
(c) until the metered demand at the (development's) Delivery Point meets
or exceeds 6 850 kW whichever occurs first.
SFA ~ 4.2 (emphasis added). When the refunds are paid to Avimor, such refunds constitute
plant investment" and will be included in the utility's rate base, and subsequently recovered in
customer rates.
Under the initial Agreement, the parties agreed that Idaho Power will refund A vimor
300 for each residential customer (Schedule 1) connected to the system during the 10-year
period. For customers taking under Schedule 7 (Small Business), Schedule 9 (Large Business)
and Schedule 24 (Irrigation), Idaho Power agreed to refund Avimor $430 times "the kva rating of
the distribution transformer serving each such non-residential account." SF A at p. 7.2 If prior to
I For example, the capacity of the substation may be expanded to meet the load from a fully developed Avimor.
SFA at 12, Exh. 1; Staff Comments at 3.
2 For example, if a Schedule 9 customer has a transformer rating of 30 kva, Idaho Power would refund $12 900($430/kW x 30) to A vimor.
ORDER NO. 30396
the conclusion of the 10-year period, Idaho Power connects 685 permanent residential customers
or the meter demand at the development delivery point meets or exceeds 6 850 kW, then Idaho
Power will reimburse the full $4.3 million. Id; Order No. 30322 at 1. Conversely, if Avimor
fails to meet these two criteria within 10 years, then Idaho Power s obligation to make refunds is
terminated and "Avimor shall forfeit any claims for further refunds." SFA at p. 8. Based upon
estimated market conditions, Avimor calculated that it would recover the $4.3 million advance in
less than five years. Avimor Reply at 15 , n.12.
B. Comments
1. Staff.In its comments, the Staff agreed that a Special Facilities Agreement was
appropriate because of the size, location and speculative nature of the development. Order No.
30322 at 2. Given the substantial cost ($4.3 million) of transmission and distribution substation
facilities to serve only 685 residential customers Gust the initial phase of the development), Staff
agreed that the advance and refund provisions "are necessary to protect the Company and its
ratepayers from speculative development." Staff Comments at 2. The advance and refund
mechanism offered some protection "if fewer customers connect or there is less load growth
(than expected) during the refund period.
Despite the refund mechanism, the Staff was seriously concerned with the high cost
per customer of constructing the facilities. "At $4.3 million to serve 685 (residential) customers
the per customer investment for Idaho Power. . . is $6 277.Staff Comments at 3; Order No.
30322. Staff noted that the difference between investment supported by current rates and the
investment represented in this case "will require subsidy by existing ratepayers and will cause
upward pressure on rates.Id at 3. In other words, the expected revenues from 685 customers
will not equal or compensate for the $4.3 million investment. Staff reasoned that "the magnitude
of the A vimor investment per customer exacerbates the problem of growth related costs and
needs to be mitigated.Id.
To address these concerns, Staff evaluated six different refund alternatives. To
mitigate the subsidy by ratepayers, lessen the upward pressure on rates, and properly assign the
risk of lower-than-expected development, Staff proposed that the refund per residential customer
be set at $1 000. Staff Comments at 3; Order No. 30322 at 2. This amount represents the
transmission and substation investment per residential customer based upon the Company s last
two general rate cases in 2004 and 2006. Id.Staff Atch. 1. Staff also recommended that
ORDER NO. 30396
A vimor receive refunds from other developers or customers that connect to the transmission and
substation facilities. Id. at 4; Order No. 30322.
2. Avimor.In its reply comments Avimor addressed several points raised by Staff
and offered two refund alternatives. First, Avimor agreed with Staffs recommendation that the
Agreement be modified to require other non-Avimor customers served by the transmission and
substation facilities to be assessed a non-recurring connection charge identical to the A vimor
refund amounts. Idaho Power would then pass this payment through to A vimor as a refund to
offset the $4.3 million advance. A vimor Reply Comments at 2.
Second, rather than Staffs recommended $1 000 refund per residential customer
Avimor argued that Staffs refund amount should be increased to at least $2 300 or preferably
900 per customer connection. Id. at 15. Avimor s request for the two alternatives of $3 900
or $2 300 was based upon a "similar" agreement Idaho Power purportedly entered into with the
Hidden Springs development. Id. at 9. Avimor claimed that in the Hidden Springs agreement
the developer agreed to pay $700 000 for construction of a 3 MV A substation to serve 300
homes. Avimor calculated that the Hidden Springs per customer investment was $2 333 and that
it should at least be allowed a refund of $2 300 per customer. Id. at 10-11.
Avimor s second refund alternative was $3 900. This amount is the sum of the
300 Hidden Springs amount plus $1 600. As Avimor explained, the $1 600 "represents 1/2 of
the investment in transmission equipment per (residential unit) that was originally requested for
recovery.Reply Comments at 15. Avimor added the transmission component because the
300 amount related strictly to the distribution substation costs. Under this alternative, A vimor
would be required to connect 1 103 residential customers or have a meter demand of 11 030 kW
at Avimor s point of delivery. Id. at 17. Using the $3 900 refund amount, Avimor estimates that
it will recover its $4.3 million in 8 to 12 years. Id. at 15. Avimor concluded that if the
Commission adopted Staffs $1 000 refund
, "
such a decision would be discriminatory towards
Avimor. . . .Id. at 10 citing Idaho State Homebuilders v. Washington Water Power Co.107
Idaho 415, 690 P.2d 500 (1984); Building Contractors Ass n of Southwest Idaho v. Idaho PUC
128 Idaho 534, 916 P.2d 1259 (1996).
3. Idaho Power. In its reply comments, Idaho Power took issue with Avimor
discrimination argument. In particular, Idaho Power argued that the two Supreme Court cases
relied upon by Avimor are "not applicable to the matter presently before the Commission.
ORDER NO. 30396
Idaho Power Reply Comments at 5.More specifically, Idaho Power observed that the
Homebuilders opinion explicitly states that the Homebuilders case presented "no factors such as
when a non-recurring charge is imposed upon new customers because the service they require
demands an extension of existing distribution or communication lines and a charge is imposed to
offset the cost of the utility s capital investment.Id. citing Homebuilders 107 Idaho at 421 690
2d at 356 (emphasis added). In other words, the Avimor SFA meets the non-recurring charge
exception in Homebuilders. Contrary to the facts in Homebuilders Idaho Power asserted that the
SF A imposes a non-recurring charge on A vimor to offset the cost of the utility s capital
investment required to respond to unique circumstances of the Avimor development." Id. at 6.
Consequently, the Commission is not violating the holdings of either Homebuilders or Building
ContraCtors.
THE PRIOR ORDER
In Order No. 30322 , the Commission observed that the Special Facilities Agreement
(SF A) is necessitated solely by the A vimor project. The Commission found that the SF A "
written does not properly allocate project risk.In particular, the Commission found that the
investment amount of $6 277 per connection exceeds by 18 times the amount currently included
in customer rates to pay for similar facilities. The $6 277 investment is still six times the $1 000
investment included in the last two rate cases. Order No. 30322 at 6. In essence, the revenue
generated by new A vimor connections/customers will not offset the refund to be included in rate
base. The Commission concluded that at the contract refund rate
, "
A vimor expects to recover its
entire $4.3 million investment in approximately five years, with only 685 new customers added
to help pay for the facilities through their rates.
The Commission found that the appropriate refund amount for the extension of
transmission and substation facilities should be $1 000 per customer connection. The
Commission went on to explain that under the $1 000 refund
rate, 4 300 connections will be required for Idaho Power to fully refund
the facilities' costs to Avimor, spreading the investment over a longer
period of time and among a greater number of customers. Requiring
300 customer connections places a greater risk on the developer, where
it properly belongs, for the success of its project. Although the refund
amount of $1 000 is greater than is currently in rates for similar facilities
the greater number of customers connected and paying rates to help pay
for the facilities, and the longer time period over which the investment
will be added, reduces potential rate impacts to an acceptable level.
ORDER NO. 30396
Order No. 30322 at 6.
THE PETITION FOR RECONSIDERATION
Avimor asserts that the Commission s final Order No. 30322 is unreasonable
discriminatory, and not in conformance with the facts in the record and applicable law. More
specifically, Avimor first argues that the Commission s reasons for denying Avimor refunds in
the SF A amount of $4 300, or its two refund alternatives of $2 300 or $3 900, are not supported
by substantial and competent evidence. Second, Avimor asserts that Order No. 30322
discriminates against A vimor in violation of Idaho Code 9 61-315. Third, A vimor maintains that
there is new evidence to support a refund at least in the amount of $1 100. Finally, A vimor
requests that the Commission clarify its prior Order to clearly permit refunds for non-residential
connections.3 Reconsideration Memorandum at 2.
DISCUSSION AND FINDINGS
Reconsideration provides an opportunity for a party to bring to the Commission
attention any issue previously determined and provides the Commission with an opportunity to
rectify any mistake or omission. Washington Water Power Company v. Kootenai Environmental
Alliance 99 Idaho 875 , 591 P.2d 122 (1979).In its Petition for Reconsideration, A vimor
requested that the Commission "process reconsideration based upon written pleadings " and
proposed to file its Memorandum in Support of Reconsideration by June 29, 2007. Petition for
Reconsideration at I , 3. Based upon A vimor' s Petition, the Commission granted reconsideration
by written brief. Order No. 30372. Avimor filed its Reconsideration Memorandum on June 29
2007 and no party filed a responsive pleading in seven days. IDAP A 31.01.01.331.05. In this
instance, A vimor seeks reconsideration based upon the existing record and seeks to introduce
new evidence in the form of an affidavit proposing a $1 100 refund. A vimor did not request an
evidentiary hearing. We turn first to Avimor s request for a clarification of our prior Order.
A. Clarification
Avimor requests that the Commission clarify Order No. 30322 to allow refunds
based not only on the number of residential connections, but also upon the kva ratings of non-
3 In neither its Petition for Reconsideration nor its Supporting Memorandum does Avimor raise the issues of a 20-
year refund period or the accrual of interest on the unrefunded balance of the $4.3 million advance. Consequently,
this Order does not address these two issues.
ORDER NO. 30396
residential connections. Memorandum at 2. Avimor maintains that the Commission s Order
does not expressly address the issue of non-residential connections. Id.
Commission Findings: We grant Avimor s request to clarify our Order No. 30322.
Idaho Code 9 61-626(3). Avimor should also be eligible to receive refunds for non-residential
connections (i.e., Schedules 7, 9, 24) within the Avimor development, and from other non-
A vimor customers taking service from the transmission and distribution substation facilities that
are the subject of this case. SFA at p. 7. Allowing Avimor to receive refunds for these non-
residential customers will speed recovery of A vimor' s advance because connection refunds for
non-residential customers (both inside and outside the development) will usually be larger than
residential refunds.In particular, this clarification will allow Avimor to receive larger
proportional refunds on the 75 000 square feet of Phase 1 commercial space, its own wastewater
treatment plant, and the elementary school. As A vimor noted in its reply comments, the school
is equivalent to 43 homes and is expected to be built in the 7- to 8-year time period. Avimor
Reply at 4, nA. In summary, Avimor should be eligible to receive refunds from residential and
non-residential customers within the development, as well as residential and non-residential
customers outside the development but taking service from the subject transmission and
distribution facilities during the 10-year refund period.
B. Substantial and Competent Evidence
Avimor next contends that the Commission s rationale for denying the proposed
300 refund for residential connections in the Special Facilities Agreement and the two refund
alternatives ($2 300 or $3 900) is not supported by substantial and competent evidence in the
record. Memorandum at 2. The developer insists that the "sole reason" for declining to adopt
any of the three refund amounts was the financial burden the SF A places on ratepayers. Id
support of its contention, A vimor argues that no other party disputed its calculation of the
potential rate impact of the SFA's refund amount on customers; thus, its evidence is undisputed
and must be accepted by the Commission.
Commission Findings: Contrary to Avimor s assertion, the Commission s Order
No. 30322 contained several reasons why the refund amounts were unjust and unreasonable.
First, the Commission found that the refund provision "will place upward pressure on rates" to
See supra footnote 2.
ORDER NO. 30396
pay for the investment in "the transmission line and substation requested by Avimor." Order No.
30322 at 5-6. In particular, the Commission noted that the A vimor "investment amount of
277 per connection exceeds by 18 times the amount (i., $350) included in customer rates to
pay for similar facilities.Id. at 5-
A vimor argued in its Memorandum that it was "patently unfair" for the Commission
to compare the SF A refund amount to the average-per-customer amount embedded in rates.
Memorandum at 4. The Commission recognized this point and also found that the $6 277
investment per connection still exceeded "by six times (the) investment made in similar facilities
since Idaho Power s most recent rate cases" in 2004 and 2006.5 Order No. 30322 at 6. The
Commission recognized that the $350 investment currently embedded in rates was not the
reasonable benchmark. Instead, the Commission found that the refund amount should be $1 000
per residential connection because this amount represents the transmission and substation per-
customer-investment based upon the Company s two most recent rate cases. Id. Moreover
Avimor does not dispute the Staffs calculations regarding the per-customer investment.
Memorandum at 4.
Second, the Commission also found that it was unreasonable that A vimor should
collect the $4.3 million investment when only 685 residences connect to the system. The
Commission noted that the SF A shifts the risk of unrecovered investment from the developer to
Idaho Power. Order No. 30322 at 5. The transmission line and expandable substation were
designed to serve the entire A vimor development. The Commission noted that at the SF A
refund rate, A vimor expects to recover its entire $4.3 million investment in approximately five
years, with only 685 new customers added to help pay for the facilities through their rates.
Order No. 30322 at 6. The revenue produced by 685 customers will not offset the $4.3 million
investment especially when nearly 600 residences are to be 30% more energy efficient than the
average residence. Reply at 4. This risk is accelerated in the SF A by the much larger than
average refund per customer investment. Consequently, the Commission found that the risk of
not fully developing the Avimor property "needs to remain with the developer.Id. at 5. As the
Commission has previously stated, the "risk of speculative development should be on the
customer requesting service, not on Idaho Power and its other customers." Order No. 29529 at 6.
5 The fmal Reconsideration Order No. 29601 in rate Case No. IPC-03-13 was issued in September 2004, and the
final Order No. 30035 in rate Case No. IPC-05-28 was issued in May 2006.
ORDER NO. 30396
Third, to balance the risk properly, the Commission found that the period of time for
refunds should be 10 years. Order No. 30322 at 6. The Commission noted that "10 years is
twice the normal refund period (five years) in Rule H.Id. The 10-year period allows the
developer additional time to develop its property and allows more time to recover refunds. "
find a 10-year refund period to be part of the proper balance for allocating the investment risk
between the developer and Idaho Power s customers.Id. at 6.
Coupled with the clarification set out above, A vimor will be eligible to obtain
refunds for residences, the commercial development, its wastewater treatment facility, the
school, and other non-A vimor customers utilizing these facilities over a 10-year period. Thus
Avimor will require less than 4 300 connections (at $1 000 per residential connection). The
Commission concluded that the Staffs proposed refund of $1 000 - based upon actual
investment data - was more appropriate. As the finder of fact, the Commission "need not weight
and balance the evidence presented to it, but is free to accept certain evidence and disregard
other evidence. The Commission is at liberty to believe or disbelieve pro-offered contradicted
evidence.Hulet v. Idaho PUC 138 Idaho 476, 479, 65 P.3d 498, 501 (2003). Here the
Commission s findings are supported by substantial and competent evidence.Industrial
Customers of Idaho Power v. Idaho PUC 134 Idaho 285 288, 1 P.3d 786, 789 (2000).
C. Discrimination
A vimor next maintains that the $1 000 refund discriminates against A vimor in
violation of Idaho Code 9 61-315. Memorandum at 5. A vimor makes two primary arguments.
First, Avimor maintains that the Commission s Order is contrary to two Idaho Supreme Court
cases: Homebuilders 107 Idaho 415 , 690 P.2d 500 (1984) and Building Contractors 128 Idaho
534, 916 P.2d 1259 (1996). Second, A vimor should receive the same or similar refund treatment
as the developer of Hidden Springs. Id at 12. Avimor argues that the Commission s decision to
set the refund amount at $1 000 is radically different than the $2 300 refund that Hidden Springs
was allegedly allowed to recover.
1. The Supreme Court Cases . A vimor presumes that the Commission does not
discuss the cases because they are not applicable. Id at 10. On this point A vimor is correct -
these cases are not applicable for the reasons set out below.
ORDER NO. 30396
First, a brief review of the Homebuilders case is warranted. In Homebuilders the
Supreme Court overturned a Commission decision requiring Washington Water Power6 to
collect a one-time
, "
nonrecurring charge of $50 per installed kilowatt of capacity on all
customers who installed electric space heating
" . . . "
where natural gas was not available.
Homebuilders 107 Idaho at 418 690 P.2d at 353 (emphasis added). The Commission sought to
dissuade customers from installing inefficient electric space heating when more efficient natural
gas heating was available. The Court overturned the Commission s decision holding that the
connection charge unlawfully discriminated between "new" and "old" customers. Id Requiring
new customers to pay the non-recurring charge created an unjustified distinction between new
and existing customers. 7
The Court observed that not all differences in a utility s rates as between different
customers constitute unlawful discrimination or preference under Idaho Code 9 61-315. The
Court declared that the setting of different rates may be justified by factors such as "cost of
service, quantity of electricity used, differences and conditions of service, or the time, nature and
pattern of use.Id. at 420, 690 P2.d at 335. The Court stated the Commission may consider
other criteria for establishing different rates including energy conservation, optimum use and
resource allocation. Id.
The Court also observed that the Homebuilders case "presents no factors such as
when a non-recurring charge is imposed upon new customers because the service they require
demands an extension of existing distribution
. . .
lines and a charge is imposed to offset the cost
of the utility's capital investment.Id. at 421 , 790 P.2d at 353 (emphasis added). Idaho Power
relied on this quoted language and argued in its reply comments that the two Supreme Court
cases are "not applicable to the matter presently before the Commission." Idaho Power asserted
that the SF A does in fact impose a one-time, non-recurring charge for the extension of facilities
to serve A vimor. Idaho Power Reply at 5-6. The Company argued that the SF A imposes
non-recurring charge on Avimor to offset the cost of the utility's capital
investment required to respond to the unique circumstances of the A vimor
development.
6 Washington Water Power now operates as Avista Utilities.
7 In Building Contractors the Court overturned the Commission when it increased the hookup fees for "new
customers. 128 Idaho at 534, 916 P.2d at 1259. In Building Contractors the Court relied extensively on the
previous Homebuilders opinion.
ORDER NO. 30396
Id at 6 (emphasis added). Consequently, Idaho Power insisted that the present case does not
violate the holdings of the two Supreme Court cases. Id. Moreover, those cases dealt with
differences in recurring retail rates between retail customers, which is not the case here.
In its Memorandum, A vimor presents two additional arguments why the
Homebuilders non-recurring "exception" is not applicable to Avimor. First, Avimor maintains
that the exception language from the Homebuilders opinion was dicta and should not be relied
upon by the Commission.Second, A vimor insists that the SF A does not involve a "non-
recurring charge." A vim or maintains that it is "not being charged or being required to contribute
funds as a charge for the construction of infrastructure under the SF A.Id. at 10-11. These
arguments are unconvincing.
Although the Court overturned the Commission s decision in Homebuilders
cursory review of the opinion reveals that the Court went to great lengths outlining the various
criteria or factors the Commission may use to lawfully set different rates for different customers.
The non-recurring language was one of the factors that justifies different rates. In other words
the Court was illustrating examples that justify a difference in rates.
In discussing the criteria which would permit reasonable differences in rates, the
Homebuilders Court specifically recognized that a utility can impose one-time, non-recurring
. charges upon new customers because the service they require demands an extension of existing
facilities. In such instances, a charge is imposed to offset the cost of the utility s capital
investment. The Commission finds that this situation is applicable to the case at hand. Here the
SFA provides for a 3.4-mile extension of transmission facilities and the construction of a
substation. The $4.3 million advance is to offset Idaho Power s capital investment. Thus, we
reject Avimor s argument that the quoted exception is dicta.
Avimor s other argument is that the SF A does not involve a non-recurring (i.
, "
one-
time ) charge.However, Avimor undercut its argument by describing the charge that the
Commission ordered Water Power to impose as a "one-time. non-recurring charge contribution
:lV
of $50.00 per installed kilowatt. . .." Memorandum at 8 (emphasis added). In the utility
industry a non-recurring charge is typically a one-time charge.
A vimor claims that it is not being charged or required to make a contribution for the
construction of infrastructure under the SF A. We reject this characterization. According to the
terms of the SFA with Idaho Power, Avimor is requesting that the utility extend facilities to
ORDER NO. 30396
serve A vimor and its subsequent customers by constructing 3.4 miles of transmission line and a
distribution substation. Construction of "Requested Facilities" is contingent upon "the receipt of
the payments from Avimor as described herein. . .." SFA at 9 1.3 at p. 3. The Agreement
requires Avimor to pay Idaho Power a charge of$4.3 million in three installments. Id. at 9 4.
Section 4.1(d) provides that if Avimor fails to make its second payment, then that
portion of the initial $2.15 million encumbered by Idaho Power for "work orders, for design
labor, materials and supplies, permitting costs and other expenditures for the requested facilities
as determined by Idaho Power in its reasonable discretion" shall be retained by Idaho Power.
The unencumbered balance will be refunded to Avimor. SFA at 4.1(d). Finally, Section 4.1(e)
of the Agreement states that if A vimor fails to make the final payment, the parties agree that
Idaho Power s obligation to refund any payments shall be terminated. If Avimor is unable to
recoup its advancement through connections during the 10-year period, then the initial
contribution will offset the utility s capital investment. Homebuilders 107 Idaho at 421 , 690
2d at 356.
As the finder of fact under Idaho Code 9 61-315 , the Commission finds that the SFA
requires A vimor to pay a one-time, non-recurring $4.3 million charge for constructing the
facilities to serve Avimor. The SF A contract - signed by both parties - requires Avimor to pay a
charge before the facilities are constructed.
Although the SF A contains provisions for refunds, this does not diminish the fact the
$4.million payment is a one-time, non-recurring charge and thus applicable to the
Homebuilders exception for justifying different rates. As previously mentioned, the
Commission s $1 000 refund was based upon the costs of transmission and substation facilities
in recent final cases. Order No. 30322 at 6. There is substantial and competent evidence
supporting the Commission s decision that the two Court cases are not applicable.
2. Hidden Springs. A vimor next argues that it is being treated unfairly because the
Commission purportedly authorized the Hidden Springs development a larger refund of $2 300
per residence for its development in 1998. Avimor insinuates that as a "new" customer, it ought
to be treated the same as Hidden Springs, the "old" customer. A vimor maintains that the higher
refund rate in Hidden Springs is "clearly demonstrated by the Hidden Springs Special Facilities
Agreement." Memorandum at 12. Moreover, Avimor maintains that the Commission authorized
ORDER NO. 30396
the Avimor refund in the utility's 2004 rate case and specifically cites Order No. 29505.
Avimor s arguments are unconvincing for several reasons.
First, A vimor argues that the Hidden Springs Special Facilities Agreement provides a
higher refund rate than the Commission set in this case. However, Avimor has not entered the
agreement into the record. Thus, the difference in refund amounts is not clearly demonstrated
because the alleged agreement was not placed in the record.
Second, A vimor maintains that the Commission authorized the larger Hidden Springs
refund in Idaho Power s 03-13 rate case and cites to Order No. 29505. Avimor does not direct
us to any page reference in the lengthy Order. In fact, our review of Order No. 29505 does not
reveal any mention of Hidden Springs at all. Likewise, our review of more than 3 000 pages of
transcript does not reveal any mention of Hidden Springs in the 03-13 rate case. Avimor has not
directed us to any Order or document where the Commission has expressly authorized a larger
refund to Hidden Springs.This lack of evidence undercuts the foundation for both the
alternative refunds. Thus, the Commission has not discriminated against A vimor vis-a-vis
Hidden Springs and we find that there is an insufficient foundation to support Avimor
alternative refunds of $3 900 and $2 300.
Finally, we mention our concern about A vimor' s calculation of the Hidden Springs
refund contained in two footnotes. Reply Comments at nn.6; Memorandum at nn.4. In
particular, Idaho Power purportedly supplied information to A vimor that the Hidden Springs
substation "would serve about 300 homes (provided there was no non-resi ential load served
Under these assumptions, the cost per home for that project was $2 333." Reply Comments
5; Memorandum at n.3 (emphasis added). As indicated in the text to the footnote, the $2 333
calculation was conditioned upon there being no non-residential load. However, we cannot
accept this assumption. In other cases involving the Hidden Springs development, parties
advised the Commission that there were approximately 900 residential units planned for the
development, including approximately 100 000 square feet of commercial space and other public
facilities including a school, community center, and a fire station. Order No. 27762 at 1 (Oct. 1
1998). In other words, there is non-residential load at Hidden Springs.
In summary, Avimor has not placed the alleged Hidden Springs agreement in the
record and has not identified any Order or document where the Commission has specifically
ORDER NO. 30396
approved a refund for Hidden Springs. On this record, A vimor has failed to adequately
demonstrate that Hidden Springs was authorized a refund in the amount of $2 300.
D. New Evidence
A vimor' s last argument is that there is new evidence available to it from data
contained in Idaho Power s general rate case (No. IPC-07-08) filing of June 8, 2007. Based
upon information provided by Idaho Power, Avimor calculated an "updated" average cost refund
amount for transmission and substation facilities using the same methodology used by Staff to
calculate its $1 000 refund proposal. Based upon this new information, A vimor calculated that
Idaho Power s updated average per customer cost is nearly $1 100. Reconsideration
Memorandum at 14. Consequently, A vimor maintains that the refund amount should be at least
100. Id.
Commission Findings: We deny reconsideration on this point. Unlike the Staffs
calculations, which are based on data from completed and final rate cases, Avimor s calculation
is based on untested data contained in the Company s recently filed pleadings. This data has not
been subject to examination by the parties much less been the subject of a final Commission
Order. As such, this new amount is speculative and has not been subject to the requisite scrutiny
necessary for competent evidence. Weeks v. Eastern Idaho Health Services 143 Idaho 834, 153
3d 1180, 1184 (2007). Without such scrutiny, we find that this calculation is premature and far
less reliable than the Staffs calculation based upon actual and final rate case data. We conclude
that there is insufficient foundation to increase the allowable refund to $1 100 because the Idaho
Power information is untested at this point in time.
ORDER
IT IS HEREBY ORDERED that Avimor s Petition for Reconsideration is granted in
part and denied in part. Order No. 30322 is clarified that the Commission shall approve a
Special Facilities Agreement that also allows Avimor to receive refunds for non-residential
customers (Schedules 7, 9, 24) within the Avimor development, including Avimor s wastewater
treatment plant. Idaho Code 9 61-626(3).
IT IS FURTHER ORDERED that Avimor s request to increase the authorized $1 000
refund amount is denied.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by
this Order or other final or interlocutory Orders previously issued in this Case No. IPC-06-
ORDER NO. 30396
may appeal to the Supreme Court of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code 9 61-627.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 3 Hi
day of August 2007.
ATTEST:
~LO
D. Jewell
mission S cretary
O:IPC-06-23 dh2
ORDER NO. 30396
MARSHA H. SMITH, COMMISSIONER
~A.
MACK A. REDFO