20070917final_order_no_30431.pdf

Office of the Secretary
Service Date
September 17, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
JERRENE PHILLIPS,
CASE NO. IPC-07-
COMPLAINANT,
ORDER NO. 30431
IDAHO POWER COMPANY,
RESPONDENT.
SUMMARY OF THE CASE
Jerrene Phillips filed a formal complaint against Idaho Power Company seeking to
dismiss a three-year back billing for $6 306.34. The service requirements of her all-electric
home require the use of current transformers and consequently a meter multiplier in order to
calculate the actual kWhs for billing. An incorrect multiplier of 20, rather than 40, was entered
into the billing system by Idaho Power in 1994 when her initial service was hooked up. This was
discovered after a planned maintenance meter exchange in March 2006, when a new meter was
installed and the proper multiplier of 40 was entered.
Ms. Phillips, through counsel, argues that Idaho Power should not be allowed to back
bill any amount in this situation. She argues that: (1) Rule 204 is invalid and/or exceeds
statutory boundaries as it relates to back billing undercharged amounts; (2) payment of the back
billed amount constitutes a financial hardship; (3) she was denied the opportunity to conserve or
reduce her usage, and under equitable principles should not be required to pay the back billed
amount; (4) Idaho Power destroyed the meter and denied her the opportunity to verify that the
meter required a billing multiplier as the Company has stated (spoliation of evidence); and (5)
Idaho Code ~ 61-313 (filed rate doctrine, non-discrimination) does not prevent Idaho Power
from settling a dispute by compromising the amount due, as it has done in the past with billings
where the actual usage was not known.
Idaho Power argues that it followed the Commission s Rules regarding back billing
(Rule 204), and that Idaho Code ~ 61-313, as well as the filed rate doctrine, and prior
Commission Orders prevent the Company from settling a disputed bill for less than the actual
ORDER NO. 30431
amount owed under the rates effective at the time the energy was consumed. The Company
responds that: (1) Rule 204's reference to Idaho Code ~ 61-642 does not render the rule void;
(2) Ms. Phillips was not denied the opportunity to conserve, and although her price signal to
conserve was not as great as if she were billed the full amount it was still significant enough to
encourage conservation; (3) Idaho Power did not intentionally destroy evidence when it retired
the meter in the normal course of business prior to the discovery of the billing error (spoliation of
evidence); (4) Idaho Code ~ 61-313 and the filed rate doctrine prevents the Company from
settling a disputed bill for less than the actual amount owed under the rates effective at the time
the energy was consumed; and (5) the Company has offered to extend the repayment period to
reduce Ms. Phillips' financial hardship.
With this Order we dismiss Ms. Phillips' Complaint and order the Company to make
a reasonable payment arrangement for the past-due amount. The Company followed authorized
practice and complied with Rule 204 requiring a rebilling. Rule 204 is not void or invalid
because of its reference to Idaho Code ~ 61-642. Idaho Power did not destroy or dispose of the
meter in bad faith or with the intent to deprive anyone from independently examining it and
consequently, the doctrine of spoliation has no application in this case. Idaho Code ~~ 6-313
61-315 , and the filed rate doctrine prohibits any reduction in the rebilled amount because the
actual usage is known, and the tariffed rate must be applied.
PROCEDURAL HISTORY
In August 2006, Jerrene Phillips made an informal complaint to the Commission
against Idaho Power disputing a $6 306.34 back-billed amount for a three-year period between
April 2003 and March 2006. Attempts to resolve the informal complaint were not successful
and on January 11 , 2007, Ms. Phillips, through counsel, filed a formal complaint against Idaho
Power Company with the Commission. IDAPA 31.01.01.024. On January 17, 2007, the
Commission issued a Summons to Idaho Power directing it to answer the complaint. On
February 7, 2007, the Company filed a timely answer to the complaint.
The parties met for informal settlement discussions on April 11 , 2007, and were not
able to settle the issues. The parties agreed that this matter was appropriate for a decision on
written submissions without a formal hearing, and submitted a proposed discovery and briefing
schedule to the Commission. On April 18, 2007, the Commission issued a Notice of Scheduling
ORDER NO. 30431
adopting the parties' proposed procedural schedule for submitting this case for decision. Order
No. 30300.
Pursuant to the procedural schedule, on June 7, 2007, Ms. Phillips filed a Motion to
Dismiss Idaho Power s back billing along with a memorandum supporting her Motion and
claims. The Company filed a response on June 28 , 2007, and Ms. Phillips filed a reply to Idaho
Power s response on July 11 2007. This matter is now fully submitted for decision.
FINDINGS OF FACT
Ms. Phillips is an Idaho Power customer and has taken continuous service at her
home in Boise since it was constructed in 1994. Given the service requirements of her all-
electric home, the construction plans called for a Current Transformer (CT) installation. Because
of the CT, a meter multiplier, or meter constant, was necessary in order to calculate the actual
kWhs for billing.
On March 26, 2006, the meter at Ms. Phillips home was exchanged as part of a
planned maintenance meter exchange. The new meter, as well as the correct meter multiplier
(40), was installed and entered into the billing system at that time. The old meter was sent to
Idaho Power s Meter Test Facility where it was determined on March 28, 2006, that it worked
properly and accurately performed its role of recording energy usage. On June 13, 2006, Ms.
Phillips called Idaho Power regarding the high energy use on her bill, and the Company
scheduled an appointment with her on June 22 at her home to help determine why her energy
usage had doubled. On June 23 , 2006, it was determined that an error had occurred when a
multiplier of 20 rather than 40 had been erroneously entered into the billing system in 1994 when
Ms. Phillips ' service was initially established. As a result, Ms. Phillips had been charged for
only half of her electric usage during the first 12 years of service.
On June 23 , 2006, the Company advised Ms. Phillips of the error and that an Idaho
Power employee would return to her home to verify that the multiplier of 40 was correct before a
corrected billing would be sent. Idaho Power then confirmed that the CT was the correct size
was installed correctly, and was still installed at the residence.
I The facts of this case are essentially undisputed. Ms. Phillips agreed with the facts as set forth in Idaho Power
Statement of the Case in its response to Ms. Phillips' Motion to Dismiss disputing only the two following factual
matters: (1) The erroneous billing was due to a billing error versus a meter malfunction; and (2) the meter was
tested and accurately perfonned its role towards recording energy usage. The two matters are disputed because Ms.
Phillips was "unable to verify these statements due to the destruction of the meter in question." Reply Memorandum
of Petitioner at p. 2.
ORDER NO. 30431
On July 12, 2006, an Idaho Power representative contacted Ms. Phillips to explain
that the under-billed usage for the three-year period between April 2003 and March 2006 would
be included on her August 8 bill. The representative also explained that future billings would
increase and that payment options were available to pay the rebilled amount. Ms. Phillips
contested the amount of the corrected billing. Idaho Power representatives have visited Ms.
Phillips' home several times to confirm the amount of energy her home is using, to help her
better understand her power consumption, and to provide information promoting energy-saving
opportunities. Additionally, the Company conducted an energy audit of her home and installed a
survey meter that records 15-minute intervals to better identify areas where energy savings can
be achieved.
On January 11 , 2007, Ms. Phillips filed a formal complaint against Idaho Power
regarding the corrected billing amount of $6 306.34. Pursuant to the procedural schedule both
parties submitted legal memoranda supporting their arguments.
D ISCUSSI ON ICON CL USI 0 NS
Rule 204's reference to Idaho Code ~ 61-642 does not render it void as it pertains
to back billing for undercharged amounts.
Whenever a billing for utility service was inaccurately prepared, the utility must
prepare a corrected billing. IDAPA 31.21.01.204.01 (Rule 204). "If the time when the
malfunction or error or failure to bill began can be reasonably determined, the corrected billings
shall go back to that time, but not to exceed the time provided by Section 61-642, Idaho Code
(three (3) years).IDAPA 31.21.204.02.
Ms. Phillips argues that Rille 204's reference to Idaho Code ~ 61-642 as authority for
allowing a three-year back billing period is erroneous, and makes Rule 204 void for exceeding
statutory authority. Although Ms. Phillips is correct in pointing out that the Commission has no
authority other than that given to it by the Legislature, she is incorrect in both her assertion that
Rule 204's reference to Idaho Code ~ 61-642 is a statement of the legislative authority by which
the Commission enacted the rule and that the reference to Idaho Code ~ 61-642 renders Rule 204
invalid. In her reply, Ms. Phillips, while agreeing with Idaho Power s position that the
Commission has the general legal authority to adopt the Utility Customer Relations Rules
maintains that the terms of Rule 204 are not consistent with the terms as set forth in Idaho Code
~ 61-642, and thus Rule 204 is erroneous, void, and exceeds statutory authority.
ORDER NO. 30431
As pointed out by Idaho Power, the Utility Customer Relations Rules (IDAP A
31.21.01.000 et seq.contain a specific statement of legal authority by which those rules were
adopted. "These rules are adopted under the general legal authority of the Public Utilities Law
Chapters 1 through 7, Idaho Code, and the specific legal authority of Sections 61-301 , 61-302
61-303, 61-315 , 61-503 , 61-507, and 61-520, Idaho Code." IDAPA 31.21.01.000 (Rule 0).
Additionally, as the Company states, Rule 204's cross-reference to Idaho Code ~ 61-642 is not a
statement of authority, but rather is meant to demonstrate and refer to the symmetrical nature of
Rule 204 and the statute. The rule provides a similar three-year time limitation upon rebilling as
the statute imposes upon complaints regarding excessive or discriminatory charges, in essence
making the time period for undercharges the same as that set forth for overcharges by the statute.
The rule s reference to statute is not a statement of authority, is not inconsistent with either the
Commission s authority to promulgate that particular rule, or with the terms of the statute and
rule itself, and does not render Rule 204 void and invalid.
The doctrine of spoliation of evidence does not apply to the facts of this case.
The evidentiary doctrine of spoliation provides that when a party with a duty to
preserve evidence intentionally destroys it, an inference arises that the destroyed evidence was
II.
unfavorable to that party. Courtney v. Big Tires, Inc.139 Idaho 821 , 824, 87 P.3d 930, 933
(2003)(quoting Bromley v. Garey, 132 Idaho 807, 812, 979 P.2d 1165, 1170 (1999)(citations
omitted)). In Courtney the Idaho Supreme Court further explained this doctrine stating, "The
merely negligent loss of evidence will not support that inference, nor would the intentional
destruction of an item that a party had no reason to believe had any evidentiary significance at
the time it was destroyed.Courtney, 139 Idaho 821 , 824, 87 P.3d 930 933.
It is clear from the facts of this case that Idaho Power did not intentionally destroy or
dispose of the meter with the knowledge that it had any evidentiary significance in this dispute.
Consequently, even an inference under the doctrine of spoliation would not arise, much less the
more extreme remedy of dismissal of the Company s claim for the back-billed amount that is
sought by Ms. Phillips.
The meter was originally purchased in 1976, and had gone through one periodic
maintenance cycle prior to being installed at Ms. Phillips' residence. The meter was removed on
March 26 , 2006, as part of a planned maintenance meter exchange. The meter was tested at the
Company s meter test facility on March 28, 2006, and found to be working properly. Because it
ORDER NO. 30431
had reached the end of its service life, having 30 years in service, it was retired based on
purchase year and model criteria pursuant to the normal course of the Company s business.
Ms. Phillips first contacted Idaho Power in June 2006 regarding the increase in her
bill. This is the first time that the Company could have known that there may be problem with
Ms. Phillips ' bill. There were no previous complaints regarding the meter , and no indication that
there was any reason to retain the meter outside of the normal course of business. It was not
until Ms. Phillips' initial complaint in June that the Company could have possibly known that the
meter may have some potential evidentiary value. It is not an unreasonable business practice that
a meter which is tested and found to be working properly and is at the end of its useful life would
be decommissioned, destroyed, or otherwise disposed of after it is tested. Idaho Power did not
destroy or dispose of the meter in bad faith or with the intent to deprive anyone from
independently examining it. It disposed of the meter in the ordinary course of business.
Consequently, the doctrine of spoliation has no application in this case.
III. Idaho Code ~~ 61-313,61-315, and thefiled rate doctrine preclude any reduction
to Ms. Phillips' back-billed amount.
The filed rate doctrine is a basic principle of utility regulation that was embodied in
Idaho Code ~~ 61-313 and 61-315 shortly after the turn of the 20th Century when our Public
Utility Laws were first adopted (1913). It also has a long history and precedent with the federal
regu1atory system and the United States Supreme Court. Simply put, the filed rate doctrine states
that a utility may charge only the approved rates and charges it has on file with its regulatory
body, i.e., its approved tariff on file with the Commission. It means the utility cannot charge
more, and also that it cannot charge less than its filed rate.
Idaho Code ~ 61-313 provides that no public utility shall collect or receive greater or
less or different compensation for any service rendered to the public than the rates and charges
applicable to such service as specified in its tariffs on file with the Commission and in effect at
the time. Additionally, Idaho Code ~ 61-313 specifically provides that no refund or remit of any
rates or charges may be made, and no contract or agreement extended except as specified by
tariff and as are regularly and uniformly extended to all corporations or persons.
The United States Supreme Court has described the filed rate doctrine as an
obligation on the part of the utility to collect only the rates set out in its tariffs and schedules
ORDER NO. 30431
despite a quoted charge of a lesser or greater amount. In discussing the filed rate doctrine as it
pertains to common carriers, the U.S. Supreme Court stated that
The classic statement of the "filed rate doctrine," as it has come to be known
is explained in Louisville Nashville R. Co. v. Maxwell 237 U.S. 94, 35
Ct. 494, 59 LEd. 853 (1915) . . . "Under the Interstate Commerce Act, the
rate of the carrier duly filed is the only lawful charge. Deviation from it is
not permitted upon any pretext. Shippers and travelers are charged with
notice of it, and they as well as the carrier must abide by it, unless it is found
by the Commission to be unreasonable. Ignorance or misquotation of rates is
not an excuse for paying or charging either less or more than the rate filed.
This rule is undeniably strict and it obviously may work hardship in some
cases, but it embodies the policy which has been adopted by Congress in the
regulation of interstate commerce in order to prevent unjust discrimination.
Mais/in Industries, Us., Inc., v. Primary Steel, Inc.497 u.S. 116, 127, 110 S.Ct. 2759, 2766
(1990). The Court has also stated that regardless of the utility s motive or intent in quoting or
charging a rate that is greater or lesser than the filed rate, the policy of non-discriminatory rates
is violated when similarly situated customers are allowed to pay different rates for the same
services. AT&T v. Central Office Telephone 524 U.S. 214, 118 S.Ct. 1956, 1963 (1998); Brian .
Emerick v. Idaho Power Co., Idaho Public Utilities Commission Case No. IPC-00-, Order
No. 29329 at 4-5 (2000)(discussing the filed rate doctrine). Similarly, Idaho Code ~ 61-315
codifies this concept of non-discriminatory rates, and prohibits a utility from giving preferential
treatment to any customer or customer class over another. Together Idaho Code ~~ 61-313 and
61-315 codify the concepts that make up the filed rate doctrine for the State of Idaho.
This Commission has on at least two occasions dismissed complaints where an
incorrect meter multiplier resulted in an under-billing of customers for actual usage. Case No.
A VU-00-, Order No. 28298; Case No. A VU-99-, Order No. 28212. In Case No. A VU-
99- 7, Mountain Mart Exxon in Moscow, Idaho was rebilled for a three-year period under Rule
204 for $13,180.82 due to an incorrect meter multiplier in bill preparation. Order No. 28212 at
1. In Case No. A VU-00-, Ms. Lisa Kimball was rebilled for a three-year period under Rule
204 for $1 502.79 due to an incorrect meter multiplier in bill preparation. Order No. 28298 at 1.
The Commission upheld the practice in each case of rebilling the full amount for a three-year
period under Rule 204. Order No. 28212 at 3, Order No. 28298 at 2. In both of these cases the
Commission found that the requested relief was preferential treatment prohibited by Idaho Code
ORDER NO. 30431
~ 61-315 and dismissed the complaints. Order No. 28212 at 3, Order No. 28298 at 2. With
regard to Ms. Kimball's complaint the Commission stated
We decline to cause a summons to issue in this matter or to require further
process for what is otherwise a collection matter. All customers of A vista
should be treated similarly. We are not insensitive to the fact that
enforcement of the rules may result in personal hardship - indeed such
hardship is claimed in this case by Ms. Kimball. In this case, however, as in
all cases of similar nature, the Rule and law control. The relief requested by
Ms. Kimball is preferential treatment prohibited by Idaho Code ~ 61-315.
Order No. 28298 at 2. Similarly, the Commission stated with regard to Mountain Mart Exxon
complaint
, "
We decline to involve ourselves further in what is otherwise a collection matter.
Order No. 28212 at 3.
In the present case, Idaho Power maintains that it cannot compromise the amount of
the rebilling without violating the filed rate doctrine, and treating Ms. Phillips in a discriminatory
manner. Ms. Phillips maintains that Idaho Power has compromised rebilling amounts with other
customers in the past, and that it is discriminatory not to do so with her in this case.
The inaccurately billed energy use in this case is the result of an incorrect meter
multiplier. The meter itself was working properly; however, because the incorrect multiplier (20
instead of 40) was used, Ms. Phillips was billed for only half of her actual energy usage. This is
a different situation than where there is, for example, a mechanical breakdown or malfunction in
the meter where we do not know what the actual usage of energy was. In such a case, a rebilling
may still occur, but it must be based upon some kind of estimating methodology to approximate
actual usage. The Company admits that it has compromised the amount in settlement of such
estimated rebillings where actual usage is unknown and an estimated bill prepared, and that
because the actual usage was estimated and debatable there was no violation of the filed rate
doctrine. However, Ms. Phillips ' actual energy usage was not estimated , it is known. Ms.
Phillips argues that because the meter is not available for her to independently verify that it was
working properly and that it needed a meter multiplier for billing that the actual amount of usage
is not known. However, a review of her billing history is consistent with Idaho Power
assertion that the meter was working properly and the multiplier was incorrect. Because actual
usage is known the filed rate doctrine dictates that the tariffed rate be applied, nothing more and
nothing less. Because of the filed rate doctrine the amount of the rebilling cannot be
compromised.
ORDER NO. 30431
Ms. Phillips makes the additional arguments that (1) payment of the back-billed
amount constitutes a financial hardship; (2) she was denied the opportunity to conserve or reduce
her usage; and (3) under equitable principles she should not be required to pay the back-billed
amount. First of all, even if we assume the validity of the three statements above, it would not
make any difference in the analysis and application of the principles in the filed rate doctrine.
The United States Supreme Court, as well as this Commission, has recognized that "This rule is
undeniably strict and it obviously may work hardship in some cases. . . (however ) Deviation
from it is not permitted upon any pretext." Mais/in Industries, Us., Inc., v. Primary Steel, Inc.
497 U.S. 116, 127, 110 S.Ct. 2759, 2766 (1990); Brian Emerick v. Idaho Power Co., Idaho
Public Utilities Commission Case No. IPC-00-, Order No. 29329 at 4-5 (2000).
Ms. Phillips ' actual energy usage is known , and the inaccuracy in her billing was the
result of application of the wrong meter milltiplier. Idaho Power properly followed Rille 204 and
issued a rebilling limited to the prior three years of use. The incorrect multiplier was in place for
Ms. Phillips' service for 12 years , during which she was billed for, and paid for, only one-half of
her actual energy usage. Although it is likely little consolation to Ms. Phillips, our rules
currently limit the amount of the under-billed usage that the Company may rebill and collect to
only 3 of those 12 years. The filed rate doctrine as set forth by the United States Supreme Court
and codified in Idaho Code ~~ 61-313 and 61-615 prohibits the reduction or alteration of the
rebilled amount. The relief requested by Ms. Phillips would constitute prohibited preferential
treatment.
Rule 204 provides that an under-billed customer, such as Ms. Phillips, must be given
the opportunity to make payment arrangements under Rille 313. IDAPA 31.21.313.03. Rule
204 also provides that the term of the payment arrangements may extend for the length of time
that the under-billing accrued, in this case three years. Id. Idaho Power has offered to extend the
repayment period to some amount beyond the three years discussed in Rule 204 to ease any
financial hardship. We direct the Company to offer Ms. Phillips reasonable payment
arrangements, which may exceed three years, for the under-billed amount.
ULTIMATE FINDINGS OF FACT AND CONCLUSIONS OF LAW
Idaho Power Company is an electric corporation pursuant to Idaho Code ~ 61-119
and a public utility pursuant to Idaho Code ~ 61-129. The Idaho Public Utilities Commission
has jurisdiction over Idaho Power Company and this matter pursuant to Title 61 , Idaho Code
ORDER NO. 30431
and specifically including Idaho Code ~~ 61-119 61-129 61-301 61-302 61-303 61-313 61-
315, 61-501 , 61-502, 61-503, 61-507, 61-508, 61-520, 61-612, as well as the Commission
Rules of Procedure, IDAPA 31.01.01.000 et seq.
After examining the record in this case including the complaint, answer, memoranda
and other pleadings, and pursuant to the procedural schedule in Order No. 30300, the
Commission finds that an evidentiary hearing in this matter is not required. The relief requested
by Ms. Phillips is preferential treatment prohibited by Idaho Code ~~ 61-313 and 61-315.
ORDER
IT IS HEREBY ORDERED that the complaint of Ms. Jerrene Phillips against Idaho
Power Company, Case No. IPC-07-, is dismissed.
IT IS FURTHER ORDERED that Idaho Power Company make reasonable payment
arrangements with Ms. Phillips, which may exceed the three-year repayment period set forth by
Rule 204.03.
THIS IS A FINAL ORDER. Any person interested in this Order 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. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code ~ 61-
626.
ORDER NO. 30431
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 17M
day of September 2007.
MARSHA H. SMITH, COMMISSIONER
",-
ATTEST:
~llJe D. Jew~ll
Commission Secretary
O:IPC-07-01 dw2
ORDER NO. 30431