20070607Memorandum in support of motion.pdf

O;9IGINAl
Stanley J. Tharp, ISB No. 3883
EBERLE, BERLIN, KADING, TURNBOW,
McKL VEEN & JONES, CHARTERED
1111 W. Jefferson, Suite 530
P. O. Box 1368
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
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Attorneys for Petitioner
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
JERRENE PHILLJPS,
Case No. JPC-07-
Petitioner
vs.
MEMORANDUM IN SUPPORT OF
PETITIONER'S MOTION TO DISMISS
IDAHO POWER COMPANY,
Respondent.
COMES NOW, the Petitioner, JERRENE PHILLJPS, by and through her attorneys of
record, Eberle, Berlin, Kading, Turnbow, McKlveen & Jones, Chartered, and hereby submits her
Memorandum in Support of Petitioner s Motion to Dismiss.
INTRODUCTION
Pursuant to the Notice of Scheduling Order No. 30300 issued by the Idaho Public Utilities
Commission on April 18, 2007, Petitioner hereby submits her Memorandum in Support of her
Motion to Dismiss.
II.STATEMENT OF FACTS
In 1994, Petitioner had a home built which was located at 16625 Basin Way, Boise, Idaho
83714. During the construction of the home, Idaho Power installed and sealed the meters and
the current transformers ("CTs ) on January 24, 1994. See Exhibit "A" attached to the Affidavit
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of Stanley J. Tharp (hereinafter "Tharp Affidavit"
).
Petitioner had no involvement with the
installation of the meters and CTs. Affidavit of Jerrene Phillips at ~ 2 (hereinafter "Phillips
Affidavit"). In approximately March of 2006, Idaho Power allegedly changed the meter at
Petitioner s residence without her knowledge.See Tharp Affidavit, Exhibit "; Phillips
Affidavit, ~ 2. Shortly thereafter, Petitioner noticed that her monthly bills were much higher than
normal and contacted Idaho Power to do an energy audit. Petitioner is a single woman living at
the residence and was concerned when her power bills significantly increased. From 1994 to
2006, Petitioner timely paid her bills in good faith on a monthly basis. See Phillips Affidavit at
~~ 2 and 5; see also Tharp Affidavit, Exhibit "D" - Response to Request for Production No.
In July of 2006, an Idaho Power representative, Bill Homan, called Petitioner on the
telephone and told her that Idaho Power had "initially installed a meter with a 20 multiplier and it
should have been a 40 multiplier." Petitioner was later informed that as a result of the improper
multiplier that she was going to be billed for three (3) years of back-billed energy consumption.
See Phillips Affidavit at ~ 2; see also Tharp Affidavit, Exhibits "c" and "
Idaho Power then sent Petitioner a bill for the three (3) years of alleged past energy
consumption totaling $6 306.34. Petitioner disputed that bill and made a good faith attempt to
settle this matter with Idaho Power; however, it rejected that offer. See Tharp Affidavit, Exhibits
A" and "see also Phillips Affidavit, ~ 4.
Idaho Power has indicated that it is unwilling to negotiate with respect to the amount of
its back-bill, and will settle for nothing less than the full amount. See Tharp Affidavit, Exhibit
Had Petitioner known of the increased consumption, she would have instituted
conservation measures in order to reduce the amount of her power consumption. Idaho Power
mistake deprived her of the opportunity of instituting conservation measures for that three-year
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period. See Phillips Affidavit. In fact, this is far more than an academic argument in Petitioner
case. There is proof through looking at her recent history of consumption. Since the new meter
was installed she has clearly instituted conservation measures. The comparison of her energy
usage was as follows:
April 2006
April 2007
May 2006
May 2007
5520.00 KWH
5160.00 KWH
5360.00 KWH
4080.00 KWH
As her consumption decreased, so did the cost of her power:
April, 2006
April 2007
May 2006
May 2007
$314.
$244.
$297.
$198.
During conversations and correspondence with Petitioner, Idaho Power admitted that it was their
mistake with regards to the incorrect amount that it had been billing Petitioner for years. See
Phillips Affidavit, Exhibit "see also Tharp Affidavit, Exhibit "D" - Response to Request for
Production No.
After Petitioner filed a Formal Complaint, she requested the opportunity to have
professional inspect the meter to determine if it was wired incorrectly, equipped with a special
register, and to confirm that it was working correctly. Idaho Power responded that it destroyed
the meter on March 28, 2006. Idaho Power gave a similar response to the Petitioner s request to
inspect the tag on the removed meter. It said the meter tag did not exist. See Tharp Affidavit
Exhibit "E" - Answer to Interrogatory No. 26.
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III.ANALYSIS
Under The Principles Of Equity, Idaho Power Should Be Precluded From Back
Billing As It Denied Petitioner The Opportunity To Implement Conservation
Measures.
Equitable principles apply in administrative proceedings. See Duggan v. Potlatch Forests
Inc.92 Idaho 262, 441 P.2d 172 (1968) (the fundamental equitable principle embedded in our
constitutions are "applicable in proceedings before administrative bodies.
).
Id. at 264, 441 P.2d at
174; Martinez v. Colorado Dept. of Human Services 97 P.3d 152, 159 (Colo. Ct. App. 2003) reh
denied; cert. denied we may not infer that the General Assembly has abrogated otherwise
applicable common law or equitable remedies.
).
Accord, Applications of Intermountain Gas Co.
77 Idaho 188 202 289 P.2d 933 942 (1955) ("the Public Utilities Commission is a fact finding and
administrative body, exercising great discretionary powers. . . .
);
Washington Water Power Co.
Kootenai Environmental Alliance 99 Idaho 875 , 879, 591 P.2d 122, 126 (1979) (once it is clear
that the Commission has jurisdiction, it is allowed "all power necessary to effectuate its purpose.
As an administrative body with broad powers, the Idaho Public Utilities Commission (hereinafter
the Commission ) is thus bound to apply basic equitable principles.
Applying fundamental equity to the facts and circumstances here, Idaho Power should not
be permitted to back-bill the Petitioner for three (3) years of energy consumption when she was
denied the opportunity to institute conservation measures. Petitioner testified in her Affidavit that
had she known the true amount of her power bills, she would have definitely instituted conservation
measures to cut down on her power usage. A comparison of her energy conservation measures
were as follows:
April 2006
April 2007
May 2006
May 2007
5520.00 KWH
5160.00 KWH
5360.00 KWH
4080.00 KWH
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Additionally, a review of Idaho Power s billing records subsequent to the installation of the meter
will demonstrate that the Petitioner has in fact significantly reduced her power consumption. Her
April 2007 bill was $69.63 less than the year before, and in May of this year she had a bill that
almost $100 less than the same month of 2006. In addition, Idaho Power admits in its letter to
Petitioner dated November 13 , 2006, that the Petitioner could have implemented conservation
measures to reduce consumption over the three-year period. See Phillips Affidavit, Exhibit "
Petitioner s ability to implement conservation measures is a matter of common sense. For
example, by analogy, a homeowner who operates a gas insert fireplace, which may be used
primarily for aesthetic purposes, and has an extremely high energy bill for the month of January,
has the opportunity to turn off the gas fireplace, and reduce energy consumption. In this case, the
Petitioner was denied that opportunity and under the principals of equity, Idaho Power should be
precluded from seeking reimbursement.
The Petitioner was denied the opportunity to implement conservation measures for a period
of three (3) years. Idaho Power s attempt to collect those amounts is patently unjust given the fact
that it admitted that the mistake was its own, and the Petitioner neither caused nor contributed in
any manner.
Idaho Power Fails To Meet Its Burden That It Is Entitled To Back-Bill Petitioner
Since They Have Destroyed The Meter And Meter Tag In Question.
Idaho Power maintains that it is entitled to back-bill the Petitioner pursuant to Utility
Customer Relations Rule 204 and Idaho Code 961-642. See Tharp Affidavit, Exhibit "
Once Idaho Power removed the meter, it had an obligation to preserve that evidence and
allow the Petitioner the opportunity to have it inspected. However, Idaho Power has precluded the
Petitioner from doing so as it destroyed the meter and the meter tag on March 28, 2006. See Tharp
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Affidavit, Exhibit "" Idaho Power admits that a meter is wired to equal one-half times the ratio
of the current transformers applied. See Tharp Affidavit, Exhibit "" Response to Interrogatory
No.8. If it was wired differently, or incorrectly, then the correct meter reading would be affected.
However, the Petitioner was precluded from determining that due to the destruction of the evidence.
In addition, in Idaho Power s Response to Interrogatory No., it admits that "form S3 meters can
be purchased with special registers that reverse the effect of specifically applied current transformer
ratios; such meters are considered direct read meters and would have a multiplier of 1 in the billing
system. Meter No. 62128615 was not equipped with this special register.See Tharp Affidavit
Exhibit ". Once again, Petitioner is precluded from determining if the meter was equipped with
a special register due to its destruction.
In addition, Idaho Power admits that it has in the past adjusted a back-billed amount to
compromise a disputed bill under circumstances where accurate meter data did not exist. See Tharp
Affidavit, Exhibit "E" - Response to Interrogatory No. 27.Once again, the Petitioner was
precluded from determining whether the meter was keeping accurate data, as she was not allowed
to inspect the meter. There are thus a number of unknown issues surrounding the meter, which will
never be known given the fact that Idaho Power destroyed the evidence. See Tharp Affidavit
Exhibit "D" - Responses to Request for Production Nos. 3 and 4.
Under the law in Idaho, destruction of the evidence has a significant impact. That doctrine
is known as spoliation of evidence. In Bromley v. Garey, 132 Idaho 807, 979 P.2d 1165 (1999), the
I It is also very interesting that the Petitioner testified that a representative ofIdaho, Power called ,her on the telephone
and personally admitted that "Idaho Power had installed a meter with a 20 multiplier when it should have installed a 40
multiplier." (Phillips Affidavit, 'il3).
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court ruled that a party may be entitled to a spoliation inference based on the alleged destruction of
evidence. The court noted:
The evidentiary doctrine of spoliation recognizes it is unlikely that a
party will destroy favorable evidence. Thus, the 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 unfavorable to that party.
Id. at 812, 979 P.2d at 1170; see also Stuart v. State 127 Idaho 806, 907 P.2d 783 (1995).
Whereas, spoliation of evidence should be a factor taken into consideration by the Commission.
There is also a decision from the Fourth Judicial District for Ada County dated February 21
1997, by the Honorable Judge Eismann in March v. Ford Motor Co.Case No. CV OC 95-05974
(February 21 , 1997).2 Tharp Affidavit, Exhibit "" The facts in that case were that the plaintiff
took delivery of a vehicle that he purchased from a local Ford dealer. Approximately a year later
the vehicle caught fire and burned. ITT Hartford insured the plaintiff s vehicle, paid for the
plaintiffs loss and took control of the truck. Shortly thereafter, ITT had it destroyed. Plaintiff then
commenced a products liability action, and the defendants moved to dismiss because ITT Hartford
had destroyed the vehicle. In addressing the motion to dismiss, the court recognized that although
Idaho appellate courts have not addressed this issue, various courts have held that a trial court has
an inherent power to impose sanctions, including dismissal of the lawsuit, where the plaintiff has
destroyed key evidence. In evaluating the sanctions, the court considered three factors: (1) the
degree of culpability in the destruction of the evidence; (2) prejudice to the opposing party; and (3)
what sanction is appropriate. The court concluded that the appropriate sanction in that particular
case arising out of the destruction of evidence was dismissal of the lawsuit, because the truck'
2 Judge Eismann is currently a Justice on the Idaho Supreme Court.
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absence served to deprive the defendants of the opportunity to develop evidence refuting liability.
Id.
As in Ford Motor Co.the Petitioner here was deprived of the opportunity to develop
evidence regarding the meter which has caused her prejudice. Moreover, if back billing is
appropriate, then Idaho Power clearly has the burden of proving its right to back-bill pursuant to the
terms of IDAP A and as established by the Commission; however, Idaho Power cannot meet its
burden of proof due to the spoliation of evidence doctrine as it has destroyed all the critical
evidence at issue.
IDAP A 31.21.01.204 Does Not Support Idaho Power s Conduct.
Idaho Power maintains that its company billing practices are governed by the Commission
and its Rules, specifically, Utility Customer Relations Rule 204 and 313, which the Commission
propagated pursuant to the legislative authority vested in it by Idaho Code 9 61-507. See ~ 4 of
Idaho Power s Answer; Tharp Affidavit, Exhibit "c." The provisions of applicable statutes are
crucial, because the law is clear that the Commission s jurisdiction is dependent on enabling
statutes. See Afton Energy, Inc. v. Idaho Power Co.111 Idaho 925, 928 , 729 P.2d 400, 403
(1986); Washington Water Power Co., supra 99 Idaho at 879, 591 P.2d at 126 (the Idaho Public
Utilities Commission has no authority other than that given to it by the legislature). Furthermore
an administrative regulation cannot exceed the bounds of authority originally granted by the
legislature. Curtis v. Canyon County Highway District No.122 Idaho 73, 82-, 831 P.2d 541
550-51 (1992) (overruled on other grounds). Thus, Idaho Power cannot use a Commission
regulation to justify billing practices when the regulation exceeds statutory boundaries. There is a
fundamental disconnect between the rule relied upon and Idaho Code 9 61-642.
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The rule in question provides in part:
01. Errors in Preparations - Malfunctions - Failure to Bill.
Whenever the billing for utility service was not accurately
determined because a meter malfunctioned or failed, bills were
estimated, or bills were inaccurately prepared, the utility shall
prepare a corrected bill. If the utility has failed to bill a customer, for
service, the utility shall prepare a bill for the period during which no
bill was provided.
02. Corrections. If the time when the malfunction or error
began or the time when the utility began to fail to bill for service
cannot be reasonably determined to have occurred within a specific
billing period, the corrected billings shall not exceed the most recent
six months before the discovery of the malfunction or error or failure
to bill. 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)
03. Refunds and Additional Payments. The utility shall
prepare a corrected billing indicating the refund due to the customer
or the amount due the utility. A customer who has been underbilled
or who has not been billed shall be given the opportunity to make
payment arrangements under Rule 313 on the amount due. At the
customer s option, the term of the payment arrangement may extend
for the length of time the underbilling accrued or the customer was
not billed. The utility shall promptly refund amounts overpaid by the
customer unless the customer consents to a credit against future bills
except overbillings not exceeding $15 may be credited to future bills.
IDAPA Rule 31.21.01.204 (emphasis added).
Given the express reference in the above-quoted rule, it is necessary to look at the language
of the cited statute. It states in its entirety:
Overcharge - Recovery of payment - If the public utility does not
comply with the order for the payment or reparation within the time
specified in such order, suit may be instituted in any court of
competent jurisdiction, to recover the same. All complaints
concerning excessive or discriminatory charges shall be filed with
the commission within three (3) years from the time the cause of
action accrues,and the petition for the enforcement of the order shall
be filed in the court within one (1) year from the date of the order of
the commission. The remedy in this section provided shall be
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cumulative and in addition to any other remedy or remedies in this
act provided in case of failure of a public utility to obey an order or
decision of the commission.
Idaho Code 9 61-642 (emphasis added).
Rule 204' s cross-reference to the above-quoted statute as the authority for allowing for a
three-year back-billing period is erroneous, and that makes the rule void for exceeding statutory
authority. All the statute does is set forth a distinct statute of limitations for particular classes of
customer claims, namely those premised on alleged excessive charges or use of discriminatory
rates. The statute does nothing to authorize back-billing for three years. In fact, the clear thrust of
the statute is to place a time limit on complaints against a utility, and it is completely silent as to
actions by a utility. This is not an insignificant discrepancy. Given that Idaho Code 9 61-642 says
nothing to authorize back-billing, let alone for any particular period of time, it follows that reliance
on IDAP A 204 is fundamentally flawed because it is premised on statutory authority that does not
exist. Put another way, Idaho Power s contention that Rule 204 is controlling should be rejected
because the rule misstates the substance ofthe statute to which it cross-references.
Idaho Power s Reliance Upon Idaho Code ~ 61-313 For The Proposition That It
Cannot Settle A Disputed Bill Is Misplaced.
Idaho Power maintains that Idaho Code 9 61-313 prohibits it from providing preferential
treatment to customers. That interpretation misconstrues the purpose of the statute for two reasons:
(1) Idaho Power has admitted to providing preferential treatment to customers in the past; and (2)
the specific language of the Code Section pertains to rates and not disputes.
Idaho Power has allowed a customer to pay less than the full back-billed amount which
resulted from a billing error. Tharp Affidavit, Exhibit "" Response to Interrogatory No. 26.
Finally, Idaho Power admits that it has adjusted back-billed amounts and compromised disputed
bills when accurate meter data did not exist. See Tharp Affidavit, Exhibit "" Response to
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Interrogatory No. 27. Thus, there have been circumstances where Idaho Power has allowed
customer to pay less than the full amount of the back-billed amount, which is contrary to its
position taken here.
In addition, Idaho Code 9 61-313 provides that the public utility shall not grant any
preference or advantage as to rates or services, or to subject any corporation or person to prejudice
or disadvantage. A plain interpretation of that Code provides that Idaho Power cannot charge
different rates to the same class of customers. But that is not an accurate description of what is
happening in this case. In fact, Idaho Power s attempt to back-bill is prejudicial to the Petitioner as
its mistake prevented her from taking conservation measures. Thus, the terms of Idaho Code 9 61-
313 support the granting of Petitioner s Motion.
Although Idaho Power Claims That Rule 204 Requires It To Back Bill For Three (3)
Years, There Are Exemptions Under The Rule.
Idaho Power maintains that it is back-billing as required to do so under Rule 204; however
Idaho Power fails to mention Rule 9 which allows for an exemption under the Rules. Given the
equitable nature of this matter, the Petitioner requests that the Commission exempt her from Rule
204 and not require her to pay the back-billed amounts.
Rule 9 provides in pertinent part: "if unusual or unreasonable hardships result from the
application of any of these Rules, any utility or customer may apply to the Commission for, or the
Commission on its own motion may order, a permanent or temporary exemption.Id. The
Petitioner hereby requests, due to the unreasonable financial hardship of repaying over $6 000, that
the Commission permanently exempt her from repaying the back billed amount.
IV.CONCLUSION
Based upon the foregoing, the Petitioner respectfully requests that the JPUC dismiss
Idaho Power s back billed amount on the grounds and reasons as stated above.
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DATED this day of June, 2007.
EBERLE, BERLIN, KADING, TURNBOW
McKLVEEN & JONES , CHARTERED
By:
CERTIFICATE OF SERVICE
(t.,I HEREBY CERTIFY that on this day of June, 2007, a true and correct copy of the
foregoing document was served by first-class mail, postage prepaid, and addressed to; by fax
transmission to; by overnight delivery to; or by personally delivering to or leaving with a person
in charge of the office as indicated below:
Tammie Estberg
Idaho Public Utilities Commission
O. Box 83720
Boise, ID 83720-0074
( J u.S. Mail
( J Fax:
( J Overnight Delivery
(~ Messenger Delivery
Lisa Nordstrom
IDAHO POWER COMPANY
1221 W. Idaho
O. Box 70
Boise, ID 83707
( J U.S. Mail
( J Fax: [phone]
( J Overnight Delivery
("A. Messenger Delivery
0f;:j
STANLEY(Y THARP
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