20091130reconsideration_order_no_30955.pdf

Offce of the Secretar
Service Date
November 30, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-08-22
AUTHORITY TO MODIFY ITS RULE H )
LINE EXTENSION TARIFF RELATED TO )
NEW SERVICE ATTACHMENTS AND ) ORDER NO. 30955
DISTRIBUTION LINE INSTALLATIONS. )
On October 30, 2008, Idaho Power Company filed an Application seeking authority
to modify its line extension taiff commonly referred to as the "Rule H" tariff. Specifically, the
Company sought to increase the charges for installng new service lines and relocating existing
electric distribution facilties. On July 1, 2009, the Commission issued Order No. 30853
parially approving the Company's request to modify its Rule H taiff. The Ada County
Highway District (ACHD), City of Nampa, Association of Canyon County Highway Districts
(collectively "the Districts"), and the Building Contractors Association ("BCA" or
"Contractors") all fied timely Petitions for Reconsideration. The Districts argued that the
Commission exceeded its statutory authority in approving the changes to Section 1 0 of the taiff
("Relocations in Public Road Rights-of-Way"). BCA objected to changes to the line extension
rate strcture concerning "allowances" or credits for the installation of new service and the
elimination of subdivision lot refuds. On July 29, 2009, Idaho Power fied an answer to the
petitions.
In Order No. 30883 issued August 19, 2009, the Commission granted in par and
denied in par the petitions for reconsideration. The Commission granted reconsideration to the
Districts to review their legal arguments and set oral argument for October 13, 2009. The
Commission parially granted reconsideration to the Contractors and scheduled an additional
evidentiar hearing regarding the appropriate line extension allowances contained in Rule H.
The evidentiary hearing was held on October 20, 2009. Final reconsideration briefs were filed
by BCA and Idaho Power on October 27,2009. On November 9, 2009, the Contractors fied a
Petition for Intervenor Funding.
After reviewing the initial record, the reconsideration testimony and briefs, and the
intervenor fuding petition, the Commission issues this final Order on reconsideration affrming,
ORDER NO. 30955 1
rescinding, amending and clarifying parts of our initial Order pursuant to Idaho Code § 61-624.
The Commission's textual changes to Rule H are contairied in the Appendix to this Order.
BACKGROUND
A. The Application
Idaho Power's last request to update its Rule H tarff was in 1995. In its present
Application, Idaho Power proposed modifications to its existing Rule H tarff that reorganize
sections, add or revise definitions, update charges and allowances, modify refud provisions, and
delete the Line Installation Agreements section. Idaho Power proposed separate sections for
"Line Installation Charge" and "Service Attchment Charges." Within the Service Attchment
Charges section, Idaho Power separates the overhead and underground service attachments,
updates the charges for underground service attachments less than 400 amps, and outlines the
calculation for determining the charges for underground service greater than 400 amps. The
"Vested Interest Charges" section was reworded and some definitions were removed. The
available options and calculations in this section were not changed. Engineering charges,
temporary service attachment charges, and return trip charges were updated in the "Other
Charges" section.
The Company asserted that the Line Installation and Service Attachment Allowances
section was modified and updated to reflect current costs associated with providing and installng
"standard terminal facilities" for single-phase and three-phase service and line installations. The
Company's proposal to provide a new customer with an installation credit or "allowance" equal
to the installed costs of "stadard" overhead distrbution facilties (e.g., transformers, meters,
wiring) is intended to provide a fixed credit toward the cost of constructing terminal facilties
and/or line installations for customers requesting new service under Rule H. Tr. at 128. The
fixed allowance is based upon the cost of the most commonly installed facilties and attempts to
mitigate intra-class and cross-class subsidies by requiring customers who need more costly
facilties to pay a larger portion of the cost to serve them. The proposal also modifies Company-
fuded credit allowances inside subdivisions. Idaho Power maintains that these revisions to the
tarff specifically address the Company's desire that customers pay their fair share of the cost for
providing new service lines or altering existing distribution lines.
Idaho Power proposed to provide "Vested Interest Refuds" to developers of
subdivisions and new customers inside existing subdivisions for new service line installations
ORDER NO. 30955 2
that were not part of the initial service installation in the subdivision. The Company also
proposed to change the availabilty of Vested Interest Refuds from a five-year period to a four-
year period and discontinue all refuds for subdivision lots.
Idaho Power also added a new Section 10 entitled "Relocations in Public Road
Rights-of-Way" to address the recovery of costs when the Company has to relocate its facilties
pursuant to Idaho Code § 62-705. The section identifies when and to what extent the Company
would be responsible for relocation costs and when it could recover costs from third-pary
beneficiaries. Specifically, this section outlines cost recovery when road improvements are for
the general public benefit, for third-party beneficiares, and for the benefit of both the general
public and third-pary beneficiaries.
B. The Prior Final Order
On July 1, 2009, the Commission issued final Order No. 30853 approving the
Company's increased allowances, miscellaneous costs, language regarding highway relocations,
and the requested changes to format and definitiøns. The Commission fuher approved a "cap"
of 1.5% on general overhead costs and maintained the existing five-year period for Vested
Interest Refuds.
The Commission determined that the updated charges and installation allowances for
line installations represent an appropriate "contribution" from new customers requesting the
service, thereby relieving one area of upward pressure on rates. The Commission specifically
noted that the costs of new power generation and transmission lines cannot be charged to only
new customers. The Commission found that when it is possible to allocate the cost of new
distribution facilties to new customers, it is appropriate to charge such facilties to the customers
who use them. As a result, the Commission found the Company's proposed fixed allowances of
$1,780 for single-phase service and $3,803 for three-phase service represent a fair, just and
reasonable allocation of line extension costs.
The Commission also declined to grant the Company's request to reduce the time
limitation within which to receive Vested Interest Refuds from five years to four years. The
Commission reasoned that more refuds may be made in the fifth year now that building activity
has slowed. Although the Building Contractors Association requested that the refud period be
extended to ten years, the Commission found such request was not supported by documentation
ORDER NO. 30955 3
or argument. Therefore, the Commission determined it reasonable to maintain a five-year period
for Vested Interest Refunds.
The Commission also found that it is reasonable to discontinue refuds for
subdivision lots. Since 1995, as lots were sold the Company would reimburse a portion of the
line extension costs that developers.. were required to advance to Idaho Power prior to
construction. These reimbursements were by subdivision lots. The Commission discontinued
the. subdivision lot refunds for three reasons. First, the Commission increased the initial
"allowance" or credit for new service to new customers. Customers may receive a $1,780
allowance for each single-phase transformer installed or a $3,803 allowance for each three-phase
transformer. Order No. 30853 at 10. A transformer may serve multiple customers. Second, the
Commission rejected BCA's argument to increase the lot refuds because its proposal included
inappropriate costs and the costs were miscalculated. Id at 12. The Commission found the
increased allowance was properly based on the average cost of distribution facilties (the
Standard Terminal Facilities) for a new customer. After providing the increased allowances to a
developer, allowing any lot refunds to "the developer would exceed the distribution investment"
for a new customer. Id Finally, discontinuing subdivision lot refuds reduces the growth of rate
base that results from such refuds.
Generally, parties requesting the relocation of utility facilties are obligated to pay for
the costs of the relocation. However, the State and its political subdivisions can require the
relocation of utility facilities located in the public right-of-way pursuant to their police powers.
Idaho Power proposed, and the Commission approved, Section 10 as a mechanism to determine
who is responsible for the costs of certain relocations in the public right-of-way. The
Commission specifically noted that Section lOin no way grants Idaho Power or the Commission
authority to impose relocation costs on a public road agency. Order No. 30853 at 13. The
Commission found it persuasive that if a public road agency determines that a private third pary
should pay for a portion of a road improvement project, it is a reasonable and appropriate
indication of responsibilty for the allocation of utilty relocation costs incured as a result of the
road improvement project. Furhermore, based on concerns noted by the parties, Idaho Power
was directed to clarify and resubmit the definitions of "Local Improvement District" and "Third-
Par Beneficiary."
ORDER NO. 30955 4
PETITIONS FOR RECONSIDERATION
A. The Districts
Ada County Highway District (ACHD), City of Nampa (Nampa), and the
Association of Canyon County Highway Districts (ACCHD), (collectively, "the Districts"),
allege that the Commission's approval of Section 10 in Rule H exceeds the Commission's
authority granted by statute. Section 10 addresses relocation costs in public rights-of-way.
ACHD fuher maintains that Section 10 violates the Idaho Constitution by requiring highway
agencies and other public entities to pay for the relocation of utilty facilities in public rights-of-
way. ACHD Petition at 11. Nampa and ACCHD also argue that the Commission's Order fails
to clarfy the definitions of "Third-Pary Beneficiar" and "Local Improvement District."
Petitions at 2.
B.BCA
Building Contractors Association (BCA or Contractors) alleges in its Petition for
Reconsideration that the Commission's 'Order "approves an inherently discriminatory rate
structure for line extensions by imposing unequal charges on customers receiving the same level
and conditions of service." BCA Petition for Reconsideration at 1. BCA also disputes the
Commission's decision to discontinue "its heretofore longstading policy that new customers are
entitled to a Company investment in distribution facilities equal to that made to serve existing
customers in the same class." Id at 11.
C. The Order Granting and Denying Reconsideration
On August 19, 2009, the Commission issued Order No. 30883 granting in par and
denying in par the paries' Petitions for Reconsideration. The Commission acknowledged the
limits of its authority in Order No. 30853 by stating that "Section lOin no way grants Idaho
Power or this Commission authority to impose (relocation) costs on a public road agency."
Order No. 30853 at 13. The Order furher clarified that "must as the Commission cannot compel
the highway agency to pay for the relocation of utility facilties in the public right-of-way made
at the agency's request, the agency caIotrestrict the Commission from establishing reasonable
charges for utility services and practices." Id However, given the complexity of the
constitutional and jurisdictional arguments posed by the Districts on reconsideration and the
Company's acknowledgement that the terms "Local Improvement District" and "Third-Pary
Beneficiar" should be clarified, the Commission found it appropriate to grant the Districts'
ORDER NO. 30955 5
,~,
petitions regarding the disputed language in Section 10 of the Rule H tarff. In order to
adequately address the issues raised on reconsideration, the Commission first directed that Idaho
Power supply new language for Section 10, including the clarification of the definitions for
"Third-Pary Beneficiar" and "Local Improvement District." Id at 11. Idaho Power was
directed to fie its updated Section 1 0 lang~age with the Commission and the paries no later than
August 28,2009.
The Petition for Reconsideration filed by BCA was granted in par and denied in par.
The Commission found it appropriate to grant reconsideration on the limited issue of the amount
of appropriate allowances. As stated in its final Order, "(t)he Commission recognizes that
multiple forces put upward pressure on utilty rates." Order No. 30853 at 10. Allowances are
intended to reflect an appropriate amount of contribution provided by new customers requesting
services in an effort to relieve one area of upward pressure on rates. BCA was directed to
address what allowance amount is reasonable based on the cost of new distribution facilties.
Reconsideration was denied regarding the five-year vested-interest refund period and
the per-lot refuds. The Commission found that the Contractors provide no cogent argument or
documentation on why the period should be expanded to 10 years. Having determined that the
new service allowance of $1,780 is based upon the cost of a single-phase transformer and
conductors, ("standard terminal facilties"),that can serve multiple customers (three or more), the
Commission found that BCA's requested refud of $1,000 per lot for a subdivision developer
would exceed the costs of new extension facilties. Id at 11-12.
ISSUES ON RECONSIDERATION
A. Legal Standards
Reconsideration provides an opportunity for a pary to bring to the Commission's
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission. Washington Water Power Co. v. Kootenai
Environmental Allance, 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may
grant reconsideration by reviewing the existing record by written briefs, or by evidentiary
hearng. IDAPA 31.01.01.311.03. If reconsideration is granted, the Commission must complete
its reconsideration within 13 weeks after the deadline for fiing petitions for reconsideration.
Idaho Code § 61-626(2).
ORDER NO. 30955 6
B. Motions to Strike
On September 21,2009, Idaho Power fied a motion to strike portions of the affdavit
of Dorrell Hansen submitted by ACHD in support of its motion for reconsideration. Idaho
Power maintains that portions of Mr. Hansen's testimony constitute inadmissible evidence
because they lack proper foundation, lack personal knowledge, lack relevance and contain
conclusory or speculative statements. On October 5, 2009, ACHD filed a brief opposing Idaho
Power's motion to strike. ACHD noted that the Idaho Supreme Cour has recognized that "the
law governing the Commission contemplates a rule of liberality in the reception of evidence."
Application of Lewiston Grain Growers, 69 Idaho 374, 380,207 P.2d 1028, 1032 (1949).
At oral argument on October 13, 2009, the Commission denied Idaho Power's
motion to strike portions of the affidavit of Dorrell Hansen. Rule 261 of the Idaho Public
Utilities Commission's Rules of Procedure provides that
Rules as to the admissibilty of evidence used by the district cours of Idaho in
non-jur civil cases are generally followed, but evidence (including hearsay)
not admissible in non-jur civil cases may be admitted to determine facts not
reasonably susceptible of proof under the Idaho Rules of Evidence. . .. All
other evidence may be admitted if it is a type generally relied upon by prudent
persons in the conduct of their affairs. The Commission's expertise, technical
competence and special knowledge may be used in the evaluation of the
evidence.
IDAPA 31.01.01.261. The Commission determined that it was capable of considering the
information provided and, based on its expertise, give it the proper weight.
On October 6, 2009, ACHD fied a motion to strike all or portions of the written
prefied testimony of Scott Sparks, David Lowr and Greg Said fied by Idaho Power. ACHD
argued that the prefied testimony of Idaho Pôwer's witnesses was inadmissible, because it failed
to comply with Rule of Procedure 250 requiring that testimony in formal hearngs be given under
oath. IDAPA 31.01.01.250. On October 8, 2009, Idaho Power filed a notice with the
Commission opposing ACHD's Motion to Strike. Idaho Power requested that argument be held
on its Motion during the oral argument scheduled for October 13,2009.
At the technical hearng conducted by the Commission on October 20,2009, each of
ACHD's objections was considered and each was denied. The written testimony of Idaho
Power's witnesses expressed the Company's positions on matters regarding the Rule H taiff.
The witnesses had firsthand knowledge of the matters to which they testified. Moreover, the
ORDER NO. 30955 7
witnesses were available at both the oral argument and technical hearng for cross-examination.
At the October 20, 2009, technical hearng BCA moved to strike certain portions of
the written testimony of Idaho Power witness Greg Said as hearsay. The Commission reserved a
ruling on BCA's Motion to Strike until Mr. Said had an opportity to testify. BCA was advised
to renew its objection if Mr. Said's live testimony did not provide adequate explanation
regarding its concerns. The hearsay concerned information provided to Mr. Said from another
witness and the other witness was present at the hearing. BCA renewed its objection. The
Commission overrled the objections. Tr. at 263, 261-64. BCA later declined to cross-examine
the other witness on the information that was the subject of the initial objections. Tr. at 299.
C. The Districts' Legal Arguments
The Districts make several legal arguments to support their position that Section 10
(Relocation Costs in Public Rights-of-Way) and several definitions in Section 1 (Definitions)
should be stricken from Rule H. The Districts generally assert that Section 10 intrudes in the
highway districts' exclusive jurisdiction iand is unconstitutional because it obligates highway
agencies and other local governent entities to pay for utilty relocation costs. The Districts also
dispute the definitions for "Third-Pary Beneficiary" and "Local Improvement Districts" as used
in Section 10. The Districts argue that a local improvement district (LID) should not be
considered a "Third-Pary Beneficiar." They maintain that an LID is an entity of local
governent and, as such, should not be required to reimburse a utilty for r~location costs.
These legal arguments are discussed in greater detail below.
1. Exclusive Jurisdiction. The Districts maintain that the highway districts possess
exclusive jurisdiction over the public rights-of-way. Thus, Section 10 of Rule H is beyond the
jurisdictional authority of the Commission because it seeks to usurp the exclusive jurisdiction of
the State's public road agencies. ACHD Petition at 2. In a related argument, the Districts
maintain that Section lOis unconstitutional and an ilegal attempt to abrogate or amend the
common law rule that utilties placing their facilties along streets and highways gain no property
right and must move their facilities at ,their own expense upon demand.
Idaho Power acknowledges the common law rule that the utilty's use of the public
road right-of-way is subordinate to the paramount use of the public. Idaho Power does not
dispute or contest the public road agencies' authority to require relocation of utilty facilties.
Reply Brief on Reconsideration at 3-4. However, Idaho Power asserts that the public road
ORDER NO. 30955 8
agencies do not have the authority, once the utility complies with the relocation request, to
determine how the utilty will seek subsequent reimbursement from third paries benefiting from
the facilties' relocation. The Company maintains that the Commission alone is vested with the
authority to determine how utilty costs should be allocated. i
Commission Findings: At the outset, we note there is agreement between the
Districts and Idaho Power regarding some of the underlying legal issues. More specifically, the
Districts and Idaho Power agree that road agencies have exclusive jurisdiction to supervise
highways and public rights-of-way. ACHD Brief at 3; Joint Brief at 2; Idaho Power Reply Brief
on Reconsideration at 3-4. As the Idaho Cour of Appeals noted in Worley Highway District v.
Kootenai County, highway agencies have exclusive jurisdiction over all highways including the
power to construct, maintain, and repair public highways as well as to establish design standards
and use standards. 104 Idaho 833, 835,663 P.2d 1135, 1137 (Ct. App. 1983) citing Idaho Code
§ § 40-1310 and 40-1312. The paries also agree that Idaho Power has a permissive right only to
use the public rights-of-way for its facilties and that public road agencies have the exclusive
authority to determine when relocation of utilty facilties within the public right-of-way is
necessary so as not to incommode the public use. ACDH Brief at 5-6; Joint Brief at 2; Idaho
Power Reply Brief at 4; see also Idaho Code §§ 62-701 and 62-705. As our Supreme Cour
noted in State ex reI. Rich v. Idaho Power. Co., the common law rule in Idaho is that "streets and
highways belong to the public and are held by the governental bodies and political subdivisions
of the state in trust for use by the public, and that only a permissive right to use, and no
permanent property right can be gained by (utilties) using them." 81 Idaho 487, 498, 346 P.2d
596, 601 (1959); Idaho Constitution, Ar. XI, § 8 ("the police power of the state shall never be
abridged or so construed as to permit corporations to conduct their business in such a maner as
to infringe. . . the general well being of the state.").
ACHD argues that Section 10 should be removed in its entirety from Rule H. The
Districts maintain that as written, Section 10 intrudes upon the road agencies' exclusive
jurisdiction. ACHD argues that "Rule H, Section 10 will effectively dictate the policies and
procedures of highway districts and local road agencies regarding electric utility relocations. It
i "(TJhe Commission has the authority to determine the inclusion as an operating expense in a utilty's rate base
either in part or in whole 'costs' incurred by a utilty." Washington Water Power v. Kootenai Environmental
Allance, 99 Idaho 875, 880, 591 P.2d 122, 127 (l979)~
ORDER NO. 30955 9
wil impact the operation of highway districts and local road agencies in their negotiations and
relationships with third paries and developers concerning road improvement projects. . .." Tr.
at 17; ACHD Brief on Reconsideration at 7; Joint Brief at 3. ACHD also insists that Section 10
conflcts with the District's Resolution No. 3302 governing utilty relocations. Finally, the
Districts also maintain that the Commission has no authority over the relocation of utilty
facilities in the public rights-of-way because such relocations are "not a service, product or
commodity under Idaho Code §§ 61-502 and 61-503." ACDH Brief on Reconsideration at 10.
The Commission does not agree with these three arguments.
First, the Commission affirms that highway agencies have the authority to determine
when Idaho Power must relocate its distribution facilities and whether any other pary is
responsible for paying for the road improvement costs. However, once the highway agency
determines that a private pary (e.g., a developer) must shoulder all or a portion of the road
improvement costs, then it is the Commission that establishes the costs for utilty relocation
pursuant to Idaho Code §§ 61-502, 503, and 507. This is the purpose of Section 10. The
Commission's ability to set relocation costs arises only after the highway agency determines that
it or another pary is responsible for road improvement costs. Likewise, when a highway agency
asks Idaho Power to relocate facilties not in'the public right-of-way (e.g., facilties in an
easement), Rule H would apply. Idaho Power Reply Brief at 6; see also Resolution 330, §
1.A.(2) (if the utility has facilities on private property that must be relocated, "the actual cost of
such relocation shall be the responsibilty of the District").
Second, as amended below, Section lOis compatible with and not in opposition to
Resolution No. 330. As explained byIACHD, Resolution No. 330 addresses utilty relocations
and determines which pary bears the cost of relocations. For example, if ACHD requires the
relocation of utilty facilities to accommodate right-of-way improvement "sponsored or fuded
by Ada County Highway District," then such relocation costs "shall be the responsibilty of the
utilty." Resolution 330, Section l(A). This section follows the common law rule in Idaho that
utilties must relocate their facilties so that the highway agency may make improvements. Rich
v. Idaho Power, 81 Idaho at 501, 346 P.2d at 603.
2 Resolution 330 is a mechanism promulgated more than 20 years ago by ACHD for the allocation of costs of road
improvements. Idaho Power patterned its Rule H, Section 10 after the language in Resolution 330.
ORDER NO. 30955 10
As amended, Section 1O(a) of Rule H incorporates this concept. Sections 2 and 3 of
Resolution 330 address instances where utilty relocations are either parially-fuded or fully-
fuded by "another individual, firm or entity." In other words, after ACHD has determined that
a private purose (as opposed to a public purose) is the impetus for a specific relocation,
Resolution 330 and Rule H provide that such private party should also be responsible for
defraying the cost of relocating utilties within the public right-of-way for that project. For
example, Section 3(A)(2) of Resolution 330 provides that when utilty "relocations are required
as a result of improvements being made by a developer within the public rights-of-way which
were not scheduled to have otherwise been made by (ACHD) within three years of the date said
improvements are actually commenced, then the responsibilty for the costs of utility . . .
relocations shall be that of the developer." (Emphases added.) This provision of Resolution 330
requires the developer to pay Idaho Power for the relocation of utilty facilties located within the
public right-of-way. Thus, Rule H, Section 10 mirrors or complements Resolution 330. Clearly
Resolution 330 contemplates circumstances where third paries will pay Idaho Power for the cost
of relocating the Company's distribution facilties located in the public right-of-way.
The language of Section lOin no way usurs the authority of ACHD or any other
highway district or political subdivision because it does not attempt to give Idaho Power or this
Commission any authority that a highway district would otherwise hold. It is because the
allocations of Resolution 330 have worked so effectively in the past 20 years that Idaho Power
proposed it as a model for the allocation of relocation costs within its Rule H, Section 10. Tr. at
27.
Third, we reject ACHD's argument that the relocation of Idaho Power's facilties
from the public right-of-way is not a "service or product" provided by the utilty. As indicated
above, the Districts recognize that there are instances where relocation costs are assigned to
another individual, firm or entity such as a developer. In such cases, Section 10 provides the
basis for Idaho Power to recover its relocation costs from the developer. The relocation of
Company facilties is a "practice" or "service" subject to our jurisdiction. Idaho Code §§ 61-502
and 61-503 authorize the Commission to establish the just and reasonable rate or charge "for any
service or products or . . . the rules, regulations, practices, or contract . . . affecting such rates."
In addition, Idaho Code § 61-507 provides that the Commission "shall prescribe rules and
regulations for the performance of any service." (Emphases added.) Indeed, Rule H "applies to
ORDER NO. 30955 11
requests for electric service under (various schedules) that require the installation, alteration,
relocation, removal, or attachment of Company owned distribution facilties." See Rule H at 1.
As the Supreme Cour observed in Washington Water Power v. Kootenai
Environmental Allance, the Commissi()n,has authority over services or practices "which do or
may affect the rates charged or the services sought or rendered which are within the
Commission's ratemaking functions." 99 Idaho at 881, 591 P.2d at 128. Where the Districts
require that a third pary pay for the road improvement costs of Idaho Power's facilties within a
public right-of-way or where the road agency requires Idaho Power to move its facilty located in
its easements, Section 10 and the other sections of Rule H fall within the Commission's
ratemaking functions. Id Even in those cases where a developer would pay only a portion of
relocation costs, the calculation of such costs is set out in Rule H.
Fourh, during oral argument ACHD noted the Legislature's recent enactment of
Idaho Code § 40-210 supports the argument that the Districts have exclusive jurisdiction over
public rights-of-way. Tr. at 8-9. While we do not dispute that the Districts have exclusive
jurisdiction, we find enactment of Section 40-210 is the Legislature's attempt to condition the
common law rule that utilities must relocate their facilities in the public right-of-way at their own
expense. Mountain States Tel. & Tel. Co.v. Boise Redevelopment Agency, 101 Idaho 30, 34, 607
P.2d 1084, 1088. Enactment of Section 40-210 earlier this year represents the Legislatue's
intent to contain or limit the cost of relocating utilty facilities where possible. In pertinent par,
Section 40-210 provides that
it is the intent of the legislature that the public highway agencies and utilties
engage in proactive, cooperative coordination of highway projects through a
process that will attempt to effectively minimize costs, limit the disruption of
utilty services, and limit or reduce the need for present or future relocation of
such utilty facilties.
. . . the public highway agency shall, upon giving written notice of not less
than thirty (30) days to the affected utility, meet with the utilty for the
purose of allowing the utilty to review plans, understand the goals,
objectives and fuding sources for the proposed project, provide and discuss
recommendations to the public highway agency that would reasonably
eliminate or minimize utilty relocation costs, limit the disruption of utility
service, eliminate or reduce the need for present or futue utility facilty
relocation, and provide reasonable schedules to enable coordination of the
highway project construction and such utilty facilty relocátion as may be
necessary. While recognizing the essential goals and objectives of the public
ORDER NO. 30955 12
highway agency in proceeding with and completing a project, the paries shall
use their best efforts to find ways to (a) eliminate the cost to the utilty of
relocation of the utility facilties, or (b) if the elimination of such cost is not
feasible, minimize the relocation cost to the maximum extent reasonably
possible.
Idaho Code § 40-210(1-2), 2009 Sess. Laws, ch. 142, § 1 (emphasis added). Here it is clear that
the Legislature intends for public road agencies and utilties to eliminate or minimize relocation
costs "to the maximum extent reasonably possible." Thus, we find that the enactment of this
statute reflects the Legislature's clear intent that public highway agencies and utilties have an
affrmative duty to eliminate the costs óf utility relocations, or if elimination of such costs are not
feasible, minimize the relocation costs "to the maximum extent reasonably possible."
Given the enactment of Idaho Code § 40-210, we find it appropriate to amend Rule
H by adding another section. New Section 11 (set out in the Appendix to this Order), requires
that Idaho Power participate in project design or development meetings once it has received
written notice from the public road agency. By paricipating in the project design or
development meetings, we believe that Idaho Power wil be in a better position to eliminate or
minimize relocation costs to the maximum extent reasonably possible.
Finally, it is a standard practice for a utility to charge for relocating its facilities.
This practice is consistent with the fudamental ratemaking principle of "cost causation" - that,
to the extent practicable, utilty costs should be paid by those entities that cause the utility to
incur the costs. If this principle were not followed, additional costs incured at the request of
both public and private entities would be shifted to all other ratepayers. This would not result in
a 'just and reasonable" rate as required by statute. Idaho Code § 61-502, 61-503, 61-507. In
summar, we find Section 10 as amended in the Appendix to be fair, just and reasonable.
2. Local Improvement District (LID) and Definition of "Third-Pary Beneficiar."
The next issue has two interrelated pars. First, the Districts object to including LIDs in the
definition of "third-pary beneficiar" in Section 1 and Section 10 of Rule H. Nampa and the
Canyon County Districts argue that the definition of "third-pary beneficiar" is too broad and
that LIDs should not be subject to the payment of utilty relocation costs as a third-party
beneficiary under Section 1O(c). Joint Brief at 5-6. ACHD argues that including LIDs "in the
definition of third pary beneficiar . . . is a clear violation of Article 8 § 4 of the Idao
Constitution because it establishes a requirement upon such entities of local governent to pay
ORDER NO. 30955 13
for utilty relocations." ACHD Brief on Reconsideration at 17. Second, because an LID is an
"entity of local governent," LIDs (like road agencies) should not be charged for the relocation
of utilty facilities when LID's request that such facilities be relocated for a public purose.
Idaho Power urges the Commission to include LIDs in the definition of "third-pary
beneficiary" and allow Idaho Power to collect relocation costs from LIDs. Brief on
Reconsideration at 9-10. Idaho Power argues that:
First, a LID is not a public road agency that is charged with operating and
maintaining public roads. An LID is simply a vehicle by which taxation can
occur but not be included in the general budget of a public road agency. The
only function the LID performs is to collect money. Where the local
improvement district is paying for the road improvements in question, the
local improvement district should also pay for the costs of relocating the
power lines as required for the improvements. The local improvement district
typically derives fuding from adjacent private businesses and landowners
and those paries, who are directly benefitting from the power line relocation,
should bear the costs of the relocation rather than the utilty's customers as a
whole. Idaho Power does not believe it is uneasonable to expect a LID to
include an amount to cover the cost of utilty facility relocation in the amount
of money it wil fund.
Idaho Power Brief on Reconsideration at 9-10; see also Tr. 28-30. Based on problems the
Company has experienced with collecting relocation costs for LIDs in the past, the Company
maintains that it would be very easy for LIDs to include the cost of utilty relocations in their
initial fuding. Id. at 10.
Commission Findings: The Commission first takes up the issue of whether LIDs
should be held responsible for utilty relocation costs. Pursuant to the Local Improvement
District Code (Idaho Code § § 50-1701 et seq.), Idaho cities, counties and highway districts are
vested with the power to create LIDs. Idaho Code §§ 50-1702(a) and 50-1703(a). An LID may
be formed to make one or more of the following public improvements: To layout or widen any
street, sidewalk, alley or off-street parking~ to pave or resurface curbs, gutters, sidewalks; to
construct, repair or maintain sidewalks, crosswalks, sanitar sewers and storm sewers; to
construct or repair street lighting; to plant or install landscaping; to acquire and construct parks
or other recreational facilties and "to do all such other work and to incur any such costs and
expenses as may be necessar or appropriate to complete any such improvements. . . ." Idaho
Code § 50-1703(a)(13), (1-12).
ORDER NO. 30955 14
Idaho Power urges us to include LIDs within the definition of third-pary beneficiar
so that Idaho Power can seek reimbursement for its relocation costs when an LID needs to have
utilty facilities relocated to accommodate the LID improvements. Tr. at 28-29. Because LIDs
,
are merely a funding mechanism, the' Company insists that an LID should pay for the relocation
of utility facilities in the public rights-of-way. Id. at 28-30. Idaho Power also argues that an LID
is not a public road agency. "It is not charged with operating and maintaining public roads and it
does not control the public rights-of-way." Id at 28.
Although the Commission believes that it is reasonable to expect that an LID would
include the cost of necessary utilty facility relocations as par of the total funding amount of the
district improvement, and that an LID may reimburse the utility for the cost of relocating its
facilities within the public right-of-way (Idaho Code § 50-1703(12 and 13), we are not persuaded
that the Commission can compel such reimbursement. As indicated above, cities, counties and
highway districts (the same entities that control public rights-of-way) may create a local
improvement district to make the public improvements authorized by law. Idaho Code §§ 50-
1702(a), (c); 50-1707.
In Vilage of Lapwai v. Allgier,: 78 Idaho 124, 130, 299 P.2d 475, 479 (1956), our
Supreme Cour held that the "power of the state and its political subdivisions to require removal
of a nuisance or obstruction, which in any way interferes with the public use of streets and
highways cannot be questioned." (Emphasis added). Lapwai passed an ordinance requiring that
a private water company remove its facilty from the streets and alleys of Lapwai so the vilage
could construct and install its own water system. The Cour noted that the city exercised the
police power conferred by the state and was performing a governental fuction. Id. at 128,299
P.2d at 477-78.3 In Lapwai, the relocation was not for the purpose of making a roadway
improvement but was the exercise of the police power for another governental purose - the
installation of a municipal water system.
In a more recent case, our Supreme Cour reaffirmed that the common law rule, i.e.,
utilities must relocate their facilties in the public right-of-way at their own expense, is not
absolute but is subject to legislative or constitutional conditions. In Mountain States Tel. & Tel.
3 The Court did note that the buried water pipes did not interfere with the use of the streets and alleys.
Consequently, the Court modified the city's order to remove the pipes by allowing the water company to decide
whether to remove them or not at its option. Id at 130,299 P.2d at 479.
ORDER NO. 30955 15
Co. v. Boise Redevelopment Agency, 101 Idaho 30, 607 P.2d 1084 (1980), the Cour was
confronted with the question of whether the Legislatue had modified the common rule by
providing that the redevelopment agency must pay for the costs of relocating utilty facilities in
the public right-of-way. The Cour concluded that although the urban renewal statute "permitted
payment of such costs, they do not appear to be mandatory. In the absence of clear legislative
direction we decline to abolish the common law rule and establish a rule requiring relocation
costs to be paid to permissive users such as the utilties." Id at 35-36, 607 P.2d at 1088-89.
Idaho Power has not provided us with any au thority that the Legislature has modified the
common law that would require LIDs formed by cities, counties or highway districts to
reimburse utilties for relocating facilties in public rights-of-way.
Our decision regarding LIDs and urban renewal districts is fuher supported by an
opinion issued last week by the Cour in Urban Renewal Agency of the City of Rexburg v. Hart,
No. 77 (Nov. 25,2009). In Rexburg, the Court affirmed an earlier ruling that an urban renewal
agency is not the "alter ego" of the local municipality that created the renewal agency even if the
city council appoints "itself to be the board of commissioners" of the urban renewal agency. . .
." Id., slip op. at 5 aff 'g Boise Redevelopment Agency v. Yick Kong, 94 Idaho 876, 499 P.2d
575 (1972). The Cour furher observed in Rexburg that a renewal agency is "entirely separate
and distinct from the municipality" and the renewal agency acts "as an ar of state governent .
. . to achieve, perform and accomplish the public puroses prescribed and provided" in the Urban
Renewal Law. Id., slip op. at 5 (italicize original and underline added). Thus, the renewal
agency exercises the state's police power to achieve the public improvements authorized by
statute.
Although we believe it is reasonable for an LID to include the necessar costs of
relocating utility facilties, we decline to include in Section lOa provision requiring LIDs to pay
for the relocation of such facilties. The Commission has no power to legislate a change in this
area and require LIDs to pay utilty relocation costs in the public rights-of-way. We further
observe that Rule H has not specifically addressed this issue in the past. We order the Company
to modify Section 10 to remove any requirement that LIDs be required to pay relocation costs for
utilty facilities located in the public rights-of-way as set out in the Appendix. While it appears
that LIDs (and urban renewal districts) may and reasonably should pay for utilty relocation costs
that are part ofthe project, we canot compel the payment of such costs.
ORDER NO. 30955 16
Our LID decision also necessitates changes to the definition of "Third-Pary
Beneficiar" in Section 1 as set out in the Appendix to this Order. Idaho Power shall delete the
term "Local Improvement Districts" from the term "Third-Par Beneficiar." In addition, we
direct the Company to change the term of "Third-Par Beneficiary" to "Private Beneficiar" to
conform with our decision above.4
3. Private Occupancy. ACHD next takes issue with Section 10(d). This subsection
states:
d. Private Right of Occupancy - Notwithstading other provisions of this
Section 10, where the Company has a private right of occupancy for its power
line facilities within the public road right-of-way, such as an easement or
other private right, the cost of Relocation is borne by the Public Road Agency.
ACHD argues that this provision imposes a duty upon road agencies to pay for utilty relocation
costs within the public right-of-way. ACHD also argues that this provision violates various
provisions of the Idaho Constitution "because it establishes a requirement upon (governental
road agencies) to pay for utilty relocations."s ACHD Brief on Reconsideration at 11, 17.
Nampa and the Canyon County Districts also argue that this section infinges on public road
agencies' abilty to negotiate utilty relocation costs on a case-by-case basis with utilties and
developers. Joint Brief at 3.
On reconsideration, Idaho Power witness David Lowr explained that a "prior right
of occupancy" may arise when a public road agency expands the public right-of-way to include
or encompass an area where Idaho Power has facilities under a prior private easement. Lowr
Direct at 5.
Commission Findings: At the outset, we note that the text of this subsection is
somewhat confusing because it indicates that the Company has a private right of occupancy
within a public right-of-way. However, the Company explained in its Brief on Reconsideration
that this "prior right of occupancy" may arse when a road agency "expands its public right-of-
4 Although ACHD takes issue with the definitions of "Public Road Agency" and "Local Improvement District" in
Section 1 of Rule H it fails to provide any specific argument on the alleged error committed by the Commission in
adopting these definitions. Neverteless, the Commission believes that amending the definition of Public Road
Agency and Local Improvement District wil clarify the scope of Rule H and in paricular the operation of Section
10. Our changes to these two definitions are reflected in the Appendix to this Order.
5 Article VII, § 2 and Article VII, § 17 for the Idaho Transportation Department and Article VII, § 4 for local road
agencies.
ORDER NO. 30955 17
way to include land where utilty facilties are located on a private easement." Idaho Power
Reply Brief on Reconsideration at 15. In previous instances, to accommodate ACHD, Idaho
Power and ACHD have entered into ~tten agreements that provide that a subsequent relocation
of distribution facilities within certin designated areas where a private right of occupancy
existed wil be borne by the road agency. This allows the utility to look to the road agency for
futue relocation costs as an alternative to compensation for expanding across the utilty's private
easement. As Idaho Power explained, expanding the public right-of-way to encompass the
Company's private easement without compensation "would constitute an unlawfl taing under
both Article 1 § 14 of the Idaho Constitution and the Fifth Amendment of the United States
Constitution. "
This understanding also comports with ACHD's Resolution 330 Section L.A.(2).
This provision of Resolution 330 provides that
If a utilty . . . has facilties located on private property, with a right of
occupancy other than its right to locate in a public right-of-way, and the
District requires that any facilty so located be relocated, the actual costs for
such relocation shall be the responsibility of the District. Such costs shall be
exclusive of profit allowances. .
(Emphasis added.) In order to assist with the clarification of Section 10, we add two definitions
to Section 1 of Rule H. The first added definition is "Easement" (which means the Company's
legal right to use the real property of another for the purose of installng or locating electric
facilties). Second, we add a definition for "Prior Right of Occupancy." Adding these
definitions and amending Subsection d. of Section 10 will improve clarity a nd allow road
agencies the flexibilty of negotiating relocation costs on a case-by-case basis. It also reflects the
current practice ofthe Company and road agencies such as ACHD.
4. Advance Payment of Relocation Costs. The Districts take exception to language
in Section 10 that requires Idaho Power to be paid in advance by third paries for Idaho Power's
relocation work in public rights-of-way. More specifically, the disputed language provides: "All
payments from Third-Party Beneficiary to the Company under this Section (10) shall be paid in
advance of the Company's relocation work, based on the Company's Work Order Cost."
(Emphasis added.) The Districts assert that this provision is an attempt "to regulate how quickly
a public utility is required to" relocate its distribution facilties. ACHD Reconsideration Brief at
ORDER NO. 30955 18
12; see also Tr. at 57. ACHD insists that requiring all relocations in the public right-of-way to
be paid in advance wil unduly interfere with the project's timetable. Tr. at 57.
For its par, Idaho Power expresses serious concerns about receiving reimbursement
for its relocation costs on a project that it did not initiate. Tr. at 32. The Company asserts that it
loses its leverage to recover relocation costs from third paries after the Company has already
relocated its facilties. Id. Under Rule H, the Company is generally paid in advance of staing
construction, unless mutually agreed otherwise. Rule H, § 2(1).
Commission Findings: We agree with the Districts that requiring advance payments
may hinder the timely completion of improvements and relocations within the public rights-of-
way. While we appreciate the fact that advance payments eliminate or reduce the risk of non-
payment to Idaho Power for recovering relocation costs, we find that the Company has other
alternatives. First, pursuant to Idaho Code § 40-210, Idaho Power is permitted to paricipate in
the project development meeting of the highway agency. Instead of simply responding to the
highway agency's direction to relocate its facilties, Section 40-210 provides utilties with an
opportunity to participate in the planing process for the purpose of eliminating or minimizing
their relocation costs.
Second, Idaho Power has other recourses to recover its relocation costs. For
example, it may terminate service to a developer if the developer refuses to pay. Utilty
Customer Rule 302 provides that a utilty may terminate service to a small commercial customer
for failure to pay past due amounts. The Company also has other collection and legal remedies
at its disposaL. Consequently, we order the Company to amend this provision of Section 10 to
read "All payments from Private Beneficiares to the Company under this section shall be based
upon the Company's work order costs." This change is shown in the Appendix.
5. Section 10 "Savings Clause." At oral argument, ACHD also took issue with the
"Savings Clause" contained in Section 10. This par of Section 10 states that:
This Section (10) shall not apply to utility relocations within public road
rights-of-way of Public Road Agencies which have adopted legally binding
guidelines for the allocation of utility relocation costs between the utility and
Third-Pary Beneficiares that are substantially similar to the rules set out in
Section 10 of Rule H.
ACHD argued that this is another instace where Section 10 intrudes on the road agencies to
adopt "legally binding guidelines that (are) substatially similar to (Section 10) or else they're
ORDER NO. 30955 19
null and void." Tr. at 58. In other words, "this provision of Rule H, Section 10 states that if our
legally binding guidelines are not similar then they're invalid." Tr. at 61.
Idaho Power noted that Section 10 was modeled on ACHD's Resolution No. 330
which was adopted by the District in 1986. Tr. at 27. The Company noted that Resolution 330
has worked well for more than 20 years and that is one reason why Idaho Power modeled
Section 10 on Resolution 330. The Company maintained that if a road agency had adopted
utilty relocation guidelines that were "substantially similar, (then) Section 10 wouldn't take
precedent over" the adopted guidelines. Tr. at 34.
Commission Findings: We find that the "Savings Clause" of Section 10 does not
operate to invalidate or void a road agency's legally enacted guidelines for the allocation of
utilty relocation costs. By its terms quoted above, Section lOis not applicable if a road agency
has adopted similar policies addressing the allocation of utilty relocation costs.
D. BCA's Issues
The Building Contractors Association (BCA) first argues that Rule H as recently
approved by the Commission is inconsistent with the methodology established in the l~t Rule H
case revision completed in 1997. Order No. 26780 (Case No. IPC-E-95-18). BCA asserts the
former line extension charges were calculated on a level of investment equal to that made to
serve existing customers in the same class. Second, BCA argues that the Company's proposed
allowances treat new and existing customers differently by allocating the additional cost of
facilities to new customers. Finally, BCA alleges that inflation, not growth, is the actual source
of increased costs to extend new distribution plant.
Idaho Power explains that the Line Installation and Service Attachment Allowances
section of Rule H was modified and updated to reflect current costs associated with providing
and installng "standard terminal facilities" for single-phase and three. phase service and line
installations. The fixed allowance is based upon the cost of the most commonly installed
facilities and attempts to mitigate intra-class and cross-class subsidies by requiring customers
with greater facilties requirements to pay a larger portion of the cost to serve them. Idaho Power
contends that there are two principal drivers that effect growth in rates over time - inflation and
growth-related costs. The Company maintains that the growth in rates over the past five years
has outpaced pure inflation, demonstrating that growth is not paying for itself. Post-hearing brief
at 2. If the "cost-causers" do not pay, then electric rates for other utilty customers will be
ORDER NO. 30955 20
higher. This result would not reflect a just and reasonable rate as required by Idaho Code § 61-
503.
Commission Findings: The Contractors first assert that our recently approved
changes to Rule H are inconsistent with the methodology that the Commission adopted in the
1995 Rule H case. BCA implied that the Commission canot change its methodology from the
1995 case. We reject this argument. As oUf Supreme Cour noted, "Because regulatory bodies
perform legislative as well as judicial fuctions in their proceedings, they are not so rigorously
bound by the doctrine of stare decisis that they must decide all future cases in the same way as
they have decided similar cases in the past." Rosebud Enterprises v. Idaho PUC, 128 Idaho 609,
618,917 P.2d 766, 775 (1996) citing Intermountain Gas Co. v. Idaho PUC, 97 Idaho 113, 119,
540 P.2d 775, 781 (1975). "So long as the Commission enters sufficient findings to show that its
action is not arbitrary and capricious, the Commission can alter its decisions." Washington
Water Power v. Idaho PUC, 101 Idaho 567, 579, 617 P.2d 1242, 1254 (1980).
In the present Rule H proceeding, the Commission is addressing a fundamental
principle of utilty regulation: To the extent practicable, utilty costs should be paid by those that
cause the utilty to incur the costs. If the "cost-causers" do not pay, the electric rates for other
customers will be higher. Different circumstances exist now than did in 1995.
Line extension charges offset the cost of physically connecting the new customer to
Idaho Power's system. We affrm ourS Order No. 30853 and find that the amount of $1,780 is
based on the curent installation cost of standard terminal facilties for single-phase service to
new residential customers. Order No. 30853 at 10; Tr. at 140-41, 267. Stadard terminal
facilties include a single-phase transformer and the cost of the wiring between the Company's
existing distribution facilities and the new customer's terminal facilties (the transformer), and
any secondary wiring between the transformer and junction boxes. Tr. at 267. Depending upon
the geographic configuration of customer locations, transformers can serve multiple customers.
Tr. at 237. Because the allowance is calculated on a per transformer basis and not a per customer
basis, the allowance inside and outside subdivisions provides the same Company investment.
Permitting a per customer allowance rather than a per transformer allowance could lead to an
allowance inside subdivisions that is greater than the cost of the terminal facilties required to
provide service. Order No. 30853 at 12; Tr. at 276-77.
ORDER NO. 30955 21
At the reconsideration hearing, BCA's witness Dr. Richard Slaughter argued that the
line extension allowance or lot refund should be equal to $1,232 per lot (single residential
customer). Tr. at 234. As Company witness Greg Said explained,
Dr. Slaughter's recommended mechanism treats developers of residential
subdivisions more favorably than individual customers seeking connections
outside of subdivisions. (His perlot mechanism) tends to provide allowances
in subdivisions that exceed the cost of standard terminal facilties with the
excess allowances offsetting the cost of primar conductor and secondar
conductor. Such treatment is inconsistent with the treatment of residential
customers outside of subdivisions who do not receive an allowance greater
than the cost of stadard terminal facilties.
Tr. at 270. Mr. Said also explained that Dr. Slaughter's $1,232 cost per lot refud proposal
inappropriately includes costs from substations, meters and service conductors which are not par
of line extension costs. Tr. at 277, 274-76. On reconsideration, we reaffrm our previous
decision that allowances should be based upon the cost of stadard terminal facilities and not on
a per lot basis. Allowances of $1,780 for single-phase service and $3,803 for three-phase service
ensure that customers are treated and charged equitably based on standard overhead service
costs, thereby mitigating intra-class and cross-class subsidies. Consequently, the Commission
finds that Idaho Power's proposed fixed allowance of$1,780 for single-phase service and $3,803
for three-phase service represents a fair, just and reasonable allocation of line extension costs.
Finally, the Contractors argue that the Rule H revision makes a new customer pay
greater upfront line extension charges to defray "some of the costs that would otherwise be
charged to existing ratepayers for new generation and transmission," thus rung afoul of Idaho
State Homebuilders v. Washington Water Power, 107 Idaho 415, 690 P.2d 350 (1984). We
reject this contention. In Homebuilders, our Supreme Court determined that the Commission
could not impose a charge on only new customers to recover the costs of additional generating
resources that served all or "existing" customers. Here, the Commission is addressing
distribution costs not resource costs. We are setting line extension charges based on the costs of
standard terminal facilties that wil be used to serve only the customer who is charged.
More importantly, the Supreme Cour noted that there is no discrimination between
"new" customers and "old" customers when the Commission sets new line extension charges.
Homebuilders, 107 Idaho at 421, 690 P.2d at 356. More specifically, the Cour noted that no
discrimination is present "when a non-recuring charge (e.g., a line extension charge) is imposed
ORDER NO. 30955 22
upon a new customer because the service they require demands an extension of existing
distribution or communication lines and a charge is imposed to offset the utility's capital
investment (in serving new customers)." Id
Idaho Power's line extension charges are imposed only on those customers who will
be served by the new facilities. The new facilities will provide service only to those customers
who pay for them. The line extension allowances and charges are based upon the cost of
terminal facilties. Once new customers pay the nonrecurng charge/lne extension costs, they
become existing customers and pay pursuant to the same rate schedule as all other existing
customers in their class. As such, there is no distinction between new and existing customers in
regard to nonrecurring rates and no rate discrimination. Idaho Code § 61-315.
INTERVENOR FUNDING
A. The Application for Funding
On November 9, 2009, Building Contractors fied an Application for Intervenor
Funding in this case pursuant to Idaho Code § 61-617 A and the Commission's Rules of
Procedure, IDAPA 31.01.01.161-165. In its Petition, BCA claimed the following fees and costs:
Legal Fees Hours TotalMichael Creamer, Parner 152.0 $38,000.00Elizabeth Donick, Associate 5.5 $ 852.50Justin Fredin, Associate 3.0 $ 585.00Tami Krger, Paralegal ~ $ 580.00Total Legal Fees: 166.3 $40,017.50
Costs: Copies $ 1,021.09
Total Work and Costs:$41,038.59
Consultant: Richard Slaughter 113.12 $19.926.66
$60,965.25Total Fees and Expenses:
BCA maintains that it was actively involved in evaluating Idaho Power's proposed
changes to its Rule H line extension tariff and the economic impacts these changes would have
on BCA members and the general public. The Contractors contend that the factual and policy
issues raised by this case were complex and important. BCA alleges that it consistently sought
findings and conclusions throughout the proceedings that new customers were entitled to a level
ORDER NO. 30955 23
of per-customer Company investment in distribution facilties on par with existing customers.
Petition for Intervenor Funding at 2.
BCA states that it retained Dr. Richard Slaughter as a consultant and expert witness
based on his familiarty with Idaho Power's rate structue and, specifically, its line extension
tariff. BCA maintains that Dr. Slaughter's testimony provided a historical and factual foundation
regarding Idaho Power's existing Rule H tariff, its embedded distribution costs, and the sources
of increasing costs of service to the Company. Dr. Slaughter argued that it was inflation, not
customer growth, causing upward pressure on rates. Id at 3.
BCA argues that the Commission's Order No. 30883 granting, in par, its request for
reconsideration implicitly, if not explicitly, recognizes that BCA identified important issues that
warranted further consideration. Consequently, BCA maintains that they materially contributed
to the proceedings. Id. at 4.
BCA next alleges that the costs and expenses incured from paricipation in this case
were all reasonable and necessary. It also côntends that, as a non-profit association that relies on
volunta membership and voluntary contributions, the costs and expenses have been a
significant financial burden. BCA claims that volunta contributions have dropped significantly
due to the struggling economy and the depressed local real estate sector. As a result, BCA states
that it has imposed significant budget cuts and mandatory days off for its staff. Id. at 5.
BCA maintains that its expenses were incured to advance policies that benefit not
only BCA members, but also the public at large. BCA points out that its position differed from
that of any other pary, including Staff. BCA asserts that it materially contributed to the decision
in this case "and to the public debate about issues of population growth and energy costs and the
appropriate allocation of those costs as between new customers and the Company's existing
ratepayers." Id. at 6.
Idaho Power did not fie a response to BCA' s request for intervenor fuding.
B. Standards for Intervenor Funding
Idaho Code § 61-617A and Rules 161-165 of the Commission's Rules of Procedure
provide the legal standards for awarding intervenor funding. Section 61-617 A( 1) declares that it
is "policy of this state to encourage paricipation at all stages of all proceedings before the
commission so that all affected customers receive full and fair representation in those
proceedings." Accordingly, the Commission may order any regulated utilty with intrastate
ORDER NO. 30955 24
anual revenues exceeding $3,500,000 to pay all or a portion of one or more paries' legal fees,
witness fees, and reproduction costs not to exceed a combined amount of $40,000. Idaho Code §
61-617A(2). The Commission's determination of whether to award intervenor fees and costs in
a paricular proceeding shall be based on the following standards:
1. Did the intervenor materially contribute to the decision rendered by the
Commission;
2. Whether the alleged costs of intervention are reasonable in amount and
would be a significant financial hardship for the intervenor to incur;
3. Did the recommendation(s) made by the intervenor differ materially from
the testimony and exhibits of the Commission Staff; and
4. Did the testimony and paricipation of the intervenor address issues of
concern to the general body of users or consumers.
Idaho Code § 61-617A(2)(a-d).
Rule 162 of the Commission's Rules of Procedure provides the procedural
requirements with which an application for intervenor fuding must comply. The application
must contain: (1) an itemized list of expenses broken down into categories; (2) a statement of
the intervenor's proposed finding or recommendation; (3) a statement showing that the costs the
intervenor wishes to recover are reasonable; (4) a statement explaining why the costs constitute a
significant financial hardship for the intervenor; (5) a statement showing how the intervenor's
proposed finding or recommendation differed materially from the testimony and exhibits of the
Commission Staff; (6) a statement showing how the intervenor's recommendation or position
addressed issues of concern to the general body of utilty users or customers; and (7) a statement
showing the class of customer on whose behalf the intervenor appeared. IDAPA 31.01.01.162.
Commission Findings: At the outset, BCA's request for intervenor fuding regarding
its actions for the entirety of these proceedings must be addressed. In Order No. 30896 the
Commission denied a request made by BCA for intervenor fuding based on its failure to
comply with procedural requirements. BCA filed its request nearly two months after the 14-day
deadline established by Commission rules. Therefore, $28,386.35 of the $60,965.25 presently
requested by BCA has already been denied by this Commission.
BCA's request for expenses incured during the reconsideration phase of this case in
the amount of $32,578.90 was timely fied. Next, Idaho Code § 61-617 A(2) and Rule 165 of the
ORDER NO. 30955 25
Commission's Rules require that the Commission find that: (a) BCA's involvement in this case
must have materially contributed to the Commission's final decision; (b) the costs of intervention
awarded are reasonable in amount; (c) the costs of intervention are a significant hardship for
BCA6; (d) the recommendations of BCA differed materially from the testimony and exhibits of
Commission Staff, and; (e) BCA addressed issues of concern to the general body of ratepayers.
1. Material Contribution. The Commission finds that BCA's arguments did not
materially contribute to our final decision in this case. BCA, in large par, recycled its arguments
and reasoning from Idaho Power's 1995 Rule H filing. Indeed, clarification was repeatedly
necessary during the technical hearing as to which case BCA was referencing - 1995 or the
present Application. Tr. at 176, 258-59, 296. The argument BCA presented regarding new and
existing customers was similar to the argument it presented in the 1995 prior case. As in the
1995 Rule H case, the Commission was not persuaded by BCA's arguments. Accordingly, the
Commission cannot find that BCA's actions materially contributed to our final decision in this
case.
2. General Body of Users and Reasonable Costs. Because much ofBCA's advocacy
addressed the line extension policies of the 1995 Rule H case, we find much of the
reconsideration legal fees and expert fees to be uneasonable. BCA was permitted to present
evidence on the "limited issue of the amount of the appropriate allowance." Order No. 30883 at
4. "BCA may address what allowance amount is reasonable based on the cost of new
distribution facilities." Id Here BCA spent considerable resources addressing issues other than
the appropriate allowance amount. Idaho Code § 61-617 A(2)(b). Moreover, BCA advocacy
does not address issues of concern to "the general body of users or consumers." Id. at (2)( d).
We conclude that the request for intervenor funding of BCA fails to meet the
requirements of Idaho Code § 61-617A and Commission Rule 165. Therefore, BCA's request
for intervenor fuding in this case is denied in its entirety.
ULTIMATE FINDINGS OF FACT
Idaho Power is a public utilty pursuant to Idaho Code §§ 61-119 and 61-129. The
Commission has jurisdiction over this matter pursuant to Title 61 of the Idaho Code. The
6 We find that the costs represent a hardship for BeA and that BCA's positions materially differed from the Staffs
positions.
ORDER NO. 30955 26
Commission amends Idaho Power's Rule H taiff as explained above and as set out in the
Appendix.
ORDER
IT IS HEREBY ORDERED that the Petitions for Reconsideration field by ACHD,
the City of Nampa, and the Association of Canyon Highway Districts is parially granted and
parially denied. As set out above, the Commission's prior Order No. 30853 is amended and
clarified pursuant to Idaho Code § 61-124.
IT IS FURTHER ORDERED that the Building Contractors Association's request to
amend Rule H and Order No. 30853 is denied.
IT is FURTHER ORDERED that the Building Contractors Association's Petition for
Intervenor Funding is denied.
IT is FURTHER ORDERED that Idaho Power shall fie new Rule H tariff sheets
consistent with this Order. The changes set out in this Order and the rest of Rule H shall become
effective for services rendered on or after December 1,2009.
IT is FURTHER ORDERED that Idaho Power shall submit to the Commission, no
later than Januar 1 of each year, updated allowance amounts for single- and three-phase service
to reflect curent costs for "standard" terminal facilties.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any pary aggrieved by
this Order or other final or interlocutory Orders previously issued in this Case No. IPC-E-08-22
may appeal to the Supreme Cour of Idaho pursuant to the Public Utilities Law and the Idaho
Appellate Rules. See Idaho Code § 61-627.
ORDER NO. 30955 27
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30 +.
day of November 2009.
ATTEST:
O:IPC-E-08-22 _ ks _ dh _Reconsideration
ORDER NO. 30955
W~bJíMPON, P ~IDENT ~
~/~L
MARSHA H. SMITH, COMMISSIONER
28
Section 1 Additions and Amendments:
Easement is the Company's legal right to use the real propert of another for the
purpose of installing or locating electric facilities.
Prior Right of Occupancy is a designated area within the public road right-of-way
where the Company and the Public Road Agency have agreed that the costs of the
Relocation of facilities in the designated area wil be borne by the Public Road
Agency. For example, a Prior Right of Occupancy may be created when the Public
Road Agency expands the public road right-of-way to encompass a Company
Easement without compensating the Company for acquiring the Easement but the
parties agree in writing that the subsequent Relocation of distribution facilties
within the designated area wil be borne by the Public Road Agency.
Local Improvement District (LID) is any entity created by an authorized governing body
under the statutory procedures set forth in Idaho Code, Title 50, Chapter 17 or Idaho Code §
40-1322. For the purpose of Rule H, the term LID also includes Urban Redevelopment
projects set forth in Idaho Code, Title 50, Chapter 20.
Public Road Agency is any state or local agency which constructs, operates,
maintains or administers public road rights-of-way in Idaho, including where
appropriate the Idaho Transportation Departent, any city or county street departent,
or a highway district.
Private Beneficiary is any individual, firm or entity that provides funding for road
improvements performed by a Public Road Agency or compensates the Company for
the Relocation of distribution facilities as set forth in Section 10. A Private Beneficiar
may include, but is not limited to, real estate developers, adjacent landowners, or
existing customers of the Company.
APPENDIX
ORDER NO. 30955
10. Relocation Costs in Public Road Rights~of~Way
The Company often locates its distribution facilties within state and local public road
rights-of-way under authority of Idaho Code § 62-705 (for locations outside Idaho city
limits) and the Company's city franchise agreements (for locations within Idaho city
limits). At the request of a Public Road Agency, the Company wil relocate its distribution
facilities from or within the public road rights-of-way. The Relocation may be for the
benefit of the general public, or in some cases, be a benefit to one or more Private
Beneficiaries. Nothing in this Section bars a Local Improvement District (LID) from
voluntarily paying the Company for Relocations.
The Company's cost of Relocations from or within the public road rights-of-way shall
be allocated as follows:
a. Road Improvements Funded by the Public Road Agency - When the
Relocation of distribution facilties is requested by the Public Road Agency
to make roadway improvements or other public improvements, the Company
wil bear the cost of the Relocation.
b. Road Improvements Partially Funded by the Public Road Agency -
When the Public Road Agency requires the Relocation of distribution
facilties for the benefit of itself (or an LID) and a Private Beneficiary, the
Company wil bear the Relocation costs equal to the percentage of the
Relocation costs allocated to the Public Road Agency or LID. The
Private Beneficiary wil pay the Company for the Relocation costs equal to the
percentage of the road improvement costs allocated to the Private Beneficiary.
c. Road Improvements not Funded by the Public Road Agency - When the
Relocation of distribution facilties in the public road rights-of-way is solely
for a Private Beneficiary, the Private Beneficiary wil pay the Company for
the cost of the Relocation.
2 APPENDIX
ORDER NO. 30955
d. Prior Right of Occupancy - When the Company and the Public Road
Agency have entered into an agreement regarding a Private Right of
Occupancy, the costs of Relocation in such designated area wil be borne
by the Public Road Agency, or as directed in the agreement.
All payments from Private Beneficiaries to the Company under this Section shall be
based on the Company's Work Order Cost.
This Section shall not apply to Relocations within public road rights-of-way of Public Road
Agencies which have adopted legally binding guidelines for the allocation of utilty
relocation costs between the Company and other paries that are substantially similar to
the rules set out in Section 10 of Rule H.
11. Eliminating or Minimizing Relocation Costs in Public Road Rights-of-
Way
Pursuant to Idaho Code § 40-210, the Company wil participate in project design or
development meetings upon receiving written notice from the Public Road Agency
that a public road project may require the relocation of distribution facilities. The
Company and other paries in the planning process wil use their best efforts to find
ways to eliminate the cost of relocating utilty facilties, or if elimination is not
feasible, to minimize the relocation costs to the maximum extent reasonably possible.
This provision shall not limit the authority of the Public Road Agency over the public
road right-of-way.
3 APPENDIX
ORDER NO. 30955