20080117Comments.pdf

DONALD 1. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3366
CE
JMi ¡ 7 Prl 2= 02
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PAMELA AND SCOTT BOWERS,
v.
)
) CASE NO. IPC-E-07-14
)
)
) COMMENTS OF THE
) COMMISSION STAFF
)
)
)
)
COMPLAINANTS,
IDAHO POWER COMPANY,
RESPONDENT.
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of Record,
Donald 1. Howell, II, Deputy Attorney General, submits the following comments in this case.
BACKGROUND
In December 2006, Pamela and Scott Bowers (the Bowers) fied an "informal" complaint
with the Staff against Idaho Power. Because the informal complaint was not successfully resolved,
the Bowers filed a "formal" complaint on July 3,2007, and supplemented the complaint with
additional information on July 26, 2007. The Bowers requested in their formal complaint that new
rules or laws be enacted dealing with "shared" transformers for business/commercial customers.
On September 5,2007, the Commission issued Order No. 30421 opening an investigation and
STAFF COMMENTS 1 JANUARY 17,2008
directing Idaho Power to respond to the allegations contained in the complaint. The Company
submitted its timely response on October 5, 2007, explaining the events surounding the Bowers'
complaint. Idaho Power asserted that its actions were in full compliance with the applicable taiffs.
On October 22,2007, the Bowers submitted additional material in reply to the Company's
Response.
A. The Formal Complaint
In December 2004, the Bowers obtained service from Idaho Power at their business, Bowers
Transporttion, in Caldwell. The Bowers' business is located in a commercial subdivision primarily
served by underground facilities. A surace-mounted transformer was placed on their property, in a
recorded utilty easement, which was adjacent to their side-lot property line. See Staff Exhibit Nos.
201,202; IPC Attchment 1; Complaint at Supp 3. They were required to pay $1,461 in excess of
the customer allowance for new terminal facilties to obtain their service connection with Idaho
Power.
About two years later in December 2006, Idaho Power provided service to Terra-West, Inc.
on the lot adjacent to the Bowers, using the same transformer serving the Bowers. Because facilties
were available (i.e. the transformer in the Bowers' easement), Terra-West was not required to pay
any charge for "sharing" Bowers' transformer. The Bowers claim that Terra-West got special
treatment because Terra-West is a subcontractor to Idaho Power. The Bowers complained that it
was inequitable that they had to pay for terminal facilties to obtain service and Terra-West did not.
They claim that they are the only lot owners in their commercial subdivision who are required to
share a transformer.
The Bowers also complained about the easement on their property and alleged that Terra-
West cut a padlock and "ilegally entered our propert" to hook up Terra-Wests electric service
from the transformer (page 2, fax of September 26,2007). Additionally, the Bowers complained
that because of the shared usage of the transformer, the transformer may not have sufficient
capacity to serve their load if they constrct additional buildings. In such a case, they allege they
will have to pay for additional upgrades to the transformer - where Terra-West has paid nothing.
The Bowers' complaint that Terra-West "has no right to use and access our property" (page 2, fax
of September 26, 2007).
STAFF COMMENTS 2 JANUARY 17,2008
B. Prior Informal Complaint
The Bowers first filed an informal complaint with the Staff in December 2006. Staffs
initial investigation concluded that the Company had complied with the applicable Rule H tariffs
(New Service Attachments and Distribution Line Installations or Alterations). Idaho Power had
calculated the charges for both paries in accordance with Rule H and both paries paid. Idaho
Power claimed Terra-West was not and had never been a contractor or subcontractor to the
company, and had not been provided special treatment. Terra-West was charged $128.70 for the
installation of its service. After informing the Bowers of Staff s findings, the initial informal
complaint was closed on December 18, 2006.
The complaint was revisited when Staff received a referral from the Consumer Protection
Unit (CPU) of the Attorney General's Office. While the complaint fied with the CPU generally
addressed the same situation, it raised additional issues and questions. After fuher investigation,
the Commission Staff again concluded that the Company had complied with all applicable taiffs
and sent the Bowers a letter dated May 16, 2007, confirming the conclusions from the initial
investigation and answering the additional questions raised in the complaint referred by the CPU.
Stafs May 16 letter (Staff Exhibit 203) clearly indicates that the Bowers would be able to increase
their load at the existing building without incuring additional facilty charges, even if Idaho Power
needs to install a larger transformer. However, if they wanted to relocate the existing transformer,
or desired service at a location more than 200 feet from the existing transformer, the Bowers would
incur additional charges for the costs of the required facilties. ¡d.
The Bowers' formal complaint followed.
STAFF DISCUSSION
Based upon Staff s investigation, Staff again determined that the charges assessed the
Bowers and Terra-West are in compliance with Rule H. Tariff Rule H does not provide vested
interest refunds for terminal facilties (such as transformers, meters and line drops) - the very issue
raised in this complaint. In addition, vested interest refuds are not available for any line extensions
within commercial subdivisions. The first customer requesting service (e.g., the Bowers) is charged
for all costs in excess of the commercial allowance for terminal facilties ($1,190), and any
subsequent customers (e.g., Terra-West) may connect to the existing facilties by only paying the
installation charge for the underground service to the meter. Staff recognizes that under these
situations, not all customers wil be treated the same. However, this tariff balances the goal of
STAFF COMMENTS 3 JANUARY 17,2008
treating customers equitably with the goal of reducing administrative burdens of tracking
investments and vested interest payments. In essence, the Company recovers the facilty costs from
the first customer without risking the recovery of the investment. By the same token, the first
customer pays most if not all of the costs. The Commission recognized the need for this balance in
Order No. 27680, and the tariff filed in compliance with that Order was approved by the
Commission. (Minute Entry dated 2/27/1997).
Staff also finds that the "sharing" of transformers is a common practice for the Company.
Transformers are the Company's property, not the customer's property. The Company has
approximately twice as many customers as transformers. The decision whether a transformer will
be used to serve more than one customer is an engineering decision made by the Company, based
upon the loads and locations of the customers. The Bowers are correct when they claim they are the
only customers in their subdivision that have a shared transformer. However, there are vacant lots
in the subdivision, so this may not remain the case in the future. The Company will make those
future decisions based upon: the loads identified by the new customers; the location of the existing
transformers; and the location of the new customer's buildings. The Bowers are not correct when
they claim no other commercial customers share transformers. Reply at page 12, ii 6.
The Company claims the transformer currently serving both the Bowers and Terra-West is
adequate for current loads, and neither par has identified any concerns in that regard. As
identified in the May 16,2007 letter from Staff to the Bowers (Staff Exhbit No. 203), the
Company's decision to use the transformer to serve both customers does not limit the Bowers'
abilty to expand their electrical demands. If the Bowers' additional demand requires a larger
transformer, the Company will replace the existing transformer with a larger one at no cost to either
customer. However, if the Bowers decide to move the transformer, or locate future uses on their lot
too far from the existing transformer, they wil incur additional charges as specified in Rule H of the
tariff.
In December 2007, representatives of Staff and the Company met to explore various options
for addressing the vested interest concerns raised by the Bowers. The Company indicated it had
considered a number of ideas, including those suggested previously by Staff to allow vested interest
refuds, and found that expanding vested interest refuds for terminal facilties to the "first"
customer requesting service increased administrative burdens excessively. Other options, such as
fixed fees for surface mounted transformers, created inconsistencies within Rule H. The paries
were unable to identify any suitable means of addressing the issues raised by the Bowers' situation.
STAFF COMMENTS 4 JANUARY 17,2008
The Company indicated the Bowers' complaint was the first customer complaint regarding
the lack of vested interest refuds for commercial subdivisions in more than ten years since Rule H
was revised in Case No. IPC-E-95-18. A review of Staff fies over the last four years did not reveal
any such complaints. The Company indicated it was in the process of reviewing the entire Rule H
and would try to address these equity issues through changes made throughout Rule H.
STAFF RECOMMENDATION
Based upon the Staffs review, the charges assessed the Bowers and Terra-West are in
compliance with Rule H. Given the lack of other customer complaints about this issue and the
accounting/administrative burdens of tracking vested interest for terminal facilities within
developed subdivisions, Staff recommends that Rule H not be changed at this time, pending the
Company's further review in 2008.
Respectfully submitted this
Donald 1. Ho 11, II
Deputy Attorney General
Technical Staff: Wayne Har
Daniel Klein
i: umisc/commentslipce07. i 4dhwhdk
STAFF COMMENTS 5 JANUARY 17,2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
STATE OF IDAHO )
) ss
COUNTY OF ADA )
)
AFFIDAVIT OF
DANIEL 1. KLEIN
DanielL. Klein, being first duly sworn on oath, deposes and states as follows:
1. That I am a Utilities Compliance Investigator for the Idaho Public Utilties
Commission.
2. At about 11 AM on April 4, 2006, I traveled to 15941 Gunfire Rd to view and tae
pictures of the property and transformer involved in Bowers' informal complaint. I took the two
photos described below.
3. Photo Number 1 (Exhibit No. 201) was taken looking south from Gunfire Road
showing the front fence of the Bowers' property and the location of the transformer. The
Bowers' service panel can be seen in the far left of the photo. The gate into the Bowers'
property is just beyond the left edge of the photo.
4. Photo Number 2 (Exhibit No. 202) shows the utilty transformer and the fence that
separates the Bowers property from Terra West's property. In the foreground is a Qwest
pedestal.
Your affiant says nothing fuher.Ð~
DanelL. Klein
Utilties Compliance Investigator
SUBSCRIBED AND SWORN to before me this 15!cay of January 2008.
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Nota Public for Idaho, Residing at Boise, Idaho.
My Commission expires 5( Íe I fJ (0
AFFIDAVIT
Exhibit No. 201
Case No. IPC-E-07-14
D. Klein, Staff
January 17,2008
Exhibit No. 202
Case No. IPC-E-07-14
D. Klein, Staff
January 17,2008
IDAHO
PUBLIC UTiliTIEScommission
C.L. "Butch" Otter, Governor
P.O. Box 83720, Boise, Idaho 83720.0074
May 16, 2007
Paul Kjellander, President
Marsha H. Smith, Commissioner
Mack A. Redford, Commissioner
Pamela A. and Scott Bowers
9559 West Hills Gate Drive
Star, lD 83669
RE: Complaint against Idaho Power, AG Log il: 135308
Dear Mr. and Mrs. Bowers:
Your complaint against Idaho Power Company filed with the Attorney General's office
has been forwarded to our office for fuer response. Perhaps the additional information will be
helpfuL. When you requested service for your lot, Idaho Power required you to pay the line
installation costs minus the cost of the transformer, as per the Company's tariff. It appears that
the transformer is located with the platted Utility easement on your lot. Once facilities are
installed, they are owned and maintained by the Company. If a single transformer can provide
the power needs to multiple customers, then the Company will utilize that transformer for
multiple customers. Idaho Power will not require Terra-West to be served from a separate
transformer unless Terra-West' s power needs change in such a way that separate or additional
facilities would be necessary.
You also indicated that you might need a larger transformer to serve your futue power
needs. If your power needs at your existing building should increase to the point where the
curent transformer wil not be able to handle your electrical load, Idaho Power will replace the
existing transformer with a larger one at no cost to you. Additional cost might be incurred if
power were needed to a new building that is more than 200 feet away from the existing
transformer. In that case, new facilities most likely would be needed to maintai reliable service
at adequate voltage.
- I hope this information helps to address your concerns.
Sincerely,/.-'. /l~C '¡ 1../ .''¿ .4/ "-J.- i 'l/~''-û'-:/~',..."'.;.-..'\1 ~ r' e:..__..,...
Danel Klein
Utilities Compliance Investigator
CC: Attorney General/Consumer Protection Unit
Dan Sch1edewitz / Idaho Power Exhibit No. 203
Case No. IPC-E-07-14
D. Klein, Staff
Januar 17, 2008
Located at 472 West Washington Street, Boise, Idaho 83702
Telephone: [phone] Facsimile: [phone]
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF JANUARY 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION, IN CASE
NO. IPC-E-07-14, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
BARTON L KLINE
SENIOR ATTORNEY
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: bkline~idahopower.com
TOM SALDIN, VICE PRESIDENT
GENERAL COUNSEL & SECRETARY
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
PAM & SCOTT BOWERS
9559 W HILLS GATE DR
STAR ID 83669-5300
TERR-WEST, INC.
15977 GUNFIRE RD
CALDWELL ID 83607
:J.~
CERTIFICATE OF SERVICE