20120307final_order_no_32476.pdf

Office of the Secretary
Service Date
March 7,2012
BEFORE TIlE 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.32476
DISTRIBUTION LINE INSTALLATIONS.)
In October 2008,Idaho Power Company filed to revise Section 10 of its Rule H
tariff.Idaho Power proposed to add Sections 10 and 11 to clarify cost responsibilities incurred
when the Company relocates its facilities placed in public roadways.Section 11 of the tariff
mirrored statutory language requiring the Company “and other parties”to use their best efforts to
find ways to eliminate or minimize costs to relocate utility facilities in public roads.The Ada
County Highway District (ACHD)appealed to the Idaho Supreme Court following the
Commission’s approval of Sections 10 and 11 of the tariff.In a decision entered May 25,2011,
the Supreme Court concluded that the tariff does not infringe on ACHD’s exclusive jurisdiction
over public rights-of-way.Ada County Highway District v.Idaho Public Utilities Commission
and Idaho Power Company,151 Idaho 1,253 P.3d 675 (2011).The Supreme Court also
concluded,however,that provisions of Section 10 and Section 11 exceeded the authority of the
Commission.Accordingly,the Supreme Court set aside those sections of the tariff,returning the
case to the Commission.
Idaho Power filed a Motion to Accept its Conforming Rule H Section 10 tariff on
July 14,2011,and then began discussions with ACHD regarding the proposed language.The
Company made changes to the new Section 10 as a result of those discussions,but ultimately the
parties were not able to reach full agreement on language to present to the Commission.
Accordingly,Idaho Power filed its amended Motion on January 11,2012,asking the
Commission to accept its revised Section 10.ACHD filed a Memorandum in Opposition to the
Company’s Motion on January 26,2012,and Idaho Power filed an Answer to ACHD’s
Memorandum on February 10,2012.
The Supreme Court Decision
The Commission’s consideration of the Company’s revised tariff begins with a
review of the Supreme Court decision entered May 25,2011.ACHD argued on appeal that
ORDER NO.32476 1
Section 10 of the tariff usurps ACHD’s exclusive jurisdiction over public rights-of-way,and
presented specific arguments or examples to support its proposition.The Court addressed each
point raised by ACHD.and rejected each.The Court also concluded,however,that provisions of
Sections 10 and 11 exceeded the Commission’s authority.
A.The Tail/fdoes nor Infringe on ACHD ‘s Authority or Jurisdiction
The first ACI-ID argument the Court considered,that by adopting Section 10 “the
IPUC will effectively dictate the policies and procedures of Public Road Agencies regarding
electric utility relocations”,was summarily rejected.The Court stated simply that ACHD “does
not point to any provision in Section 10 by which IPUC attempts to do so.”ACHD v.IPUC,151
Idaho 1,253 P.3d 675,679 (2011).
The next ACHD argument was also rejected by the Court.ACHD asserted that
Section 10 impacted Public Road Agencies in their negotiations with third parties and developers
concerning road improvement projects.As described by the Court,“[tjhe contention is that one
of the bargaining chips ACHD has in negotiating with developers is the authority to rule upon
whether the developer will have to reimburse Company for any of the cost of relocating its
electrical distribution facilities.ACHD can get a developer to pay more money to it if the
developer does not have to reimburse Company.”ACHD v.IPUC.253 P.3d at 679.The Court
found no legal basis for the authority claimed by ACHD,stating;“That ACHD finds that
authority useful does not mean it is a power granted to it by the legislature.”Jd.
Next,the Supreme Court considered ACHD’s argument that Section 10 will
“regulate and control electric utility relocations by assigning financial liability for such
relocations.”ACHD v.IPUC,253 P.3d at 679.Section 10 might have required a third party to
pay Idaho Power the costs to move its facilities if such relocation was for the third party’s
benefit.The Court stated that “ACHD does not explain how requiring a third party to reimburse
Company for relocation costs enables IPUC to ‘regulate and control electric utility relocations.”
Id.ACHD argued that it has exclusive authority to assign cost responsibility for utility
relocations in roadways,and quoted portions of Idaho Code §40-1310.The Court concluded
that “none of powers granted to ACHD in the above-quoted statute [Idaho Code §40-131 Oj
provide that ACHD can determine whether a third party is required to reimburse a utility for all
or a portion of its cost of relocating the utility’s distribution facilities that are in a public right-of
way.”ACHD v.IPUC,253 P.3d at 680.
ORDER NO.32476 2
The Court also rejected ACHD’s argument that the cost assignment authority it
claimed is implied in the statutes describing ACHD’s jurisdiction.Noting that a utility must
move its facilities at the request of a road agency,and that ACHD does not bear any of that cost,
the Court concluded that there is no need for ACHD to have authority to determine whether a
third party will reimburse the utility:“Whether some third party reimburses the Company after
the relocation has been completed is not an issue of concern to ACHD.”ACHD v.IPUC,253
P,3dat 681.
Finally,the Court considered ACHD’s argument that Section 10 would create
inefficiencies by involving the Commission in scheduling and potential disputes that arise in
road improvement projects.However,“[m]issing from ACHD’s argument is any reference to a
provision in Section 10 that purports to prevent ACHD from resolving such disputes involving
Company,or that purports to have IPUC resolve those disputes,or that purports to regulate
electric utility relocations on public rights-of-way.”ACHD v.IPUC,253 P.3d at 681.The Court
thus rejected all ACHD arguments that Section 10 interfered with its authority,concluding
“ACHD has not pointed to any provision in Section 10 that infringes upon ACHD’s power or
jurisdiction.”Id.
B.Provisions ofSections 10 and 11 Exceeded the Commission ‘s Authority
The Court next considered whether adoption of Section 10 exceeded the
Commission’s authority.The Court first rejected ACHD’s argument that relocation of utility
facilities is not a “service”as described in the Commission’s jurisdictional statutes.The Court
concluded that the Commission’s construction of the word service,to include relocation services,
is reasonable,quoting from Idaho Code §61-507:“the Commission shall prescribe rules and
regulations for the performance of any service or the furnishing of any commodity of the
character furnished or supplied by any public utility.”ACHD v.JPUC,253 P.3d at 682.The
Court held that the performance of any service reasonably includes removing and re-installing
distribution facilities located in public roadways.Id.
After holding that the relocation of distribution facilities is the performance of a
service under Section 6 1-507,and thus within the Commission’s ratemaking authority,the Court
nonetheless concluded that Section 10 exceeded the Commission’s authority.The Court
affirmed that the Commission “certainly has the authority to determine the costs that Company
can charge a private person who requests services from company.”ACHD v.IPUC,253 P.3d at
ORDER NO.32476
682.Section 10,however,goes further than that because “IPUC could require a third party to
pay for services that the third party did not request from company if IPUC determined that a
relocation required by a public road agency benefited the third party.”ACHD v.IFUC,253 P.3d
at 682-83 (italics added).Because no statute grants the Commission that authority,the Court
concluded that the adoption of Section 10 exceeded the Commission’s authority.
Finally,the Court also concluded that Section 11 of the tariff exceeded the authority
of the Commission.Section 11 mirrored Idaho Code §40-2 10,a provision enacted in 2009
intended to create a proactive,cooperative process for road agencies and utilities to plan projects
so as “to effectively minimize costs,limit the disruption of utility services,and limit or reduce
the need for present or future relocation services of such utility facilities.”Idaho Code §40-
210(1).Paragraph 2 of the statute includes an admonition that,“in proceeding with and
completing a project,the parties shall use their best efforts to find ways to (a)eliminate the cost
to the utility of relocation of the utility facilities,or (b)if elimination of such costs is not feasible,
minimize the relocation costs to the maximum extent reasonably possible.”Idaho Code §40-
210(2)(italics added).The Court found unauthorized a nearly identical sentence in Section 11
that stated “the Company and other parties in the planning process will use their best efforts to
find ways to eliminate the cost of relocating utility facilities,or if elimination is not feasible,to
minimize the relocation costs to the maximum extent reasonably possible.”ACHD v.IPUC,253
P.3d at 683.Noting that “other parties”could include ACHD and other entities not regulated by
the Commission,the Court stated that “[ajithough the legislature has the authority to order public
highway agencies to use their best efforts to minimize the cost of relocating utility facilities,
IPUC does not have that authority.”Id.The Court accordingly set aside Section 11.
Idaho Power’s Revised Tarffand Motion
Idaho Power filed its amended Motion on January 11,2012,asking Commission
approval of its revisions to Rule H to conform with the Supreme Court’s decision.The revised
Section 10 contains three paragraphs.New Section 11 is one short paragraph stating that the
tariff does not cancel existing agreements and that all applications for relocation services will be
governed under the rule or schedule in effect at the time the application was received by Idaho
Power.The proposed Section 11 is not in dispute.
Idaho Power in its Motion represents that it made changes to Paragraph 1 of Section
10 as a result of discussions with ACHD,and that ACHD agreed to the proposed modifications.
ORDER NO.32476 4
Similarly regarding Paragraph 2,Idaho Power represents that ACHD recommended and Idaho
Power agreed to make changes ‘10 more clearly reflect the public road agency’s role in
determining that facilities located in public rights-of-way must be relocated or removed when
they incommode the public use.”Idaho Power Amended Motion,p.2.The first two paragraphs
of revised Section 10 are as follows:
The Company often locates its distribution facilities 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).When the Company is
notified of a road improvement project pursuant to Idaho Code §40-2 10,the
Company will meet with the Public Road Agency as provided in Idaho Code §
40-210.
If a Public Road Agency determines that the Company’s facilities incommode
the public use of any road,highway,or street,the Public Road Agency can
require the company to relocate or remove the facilities.If a Public Road
Agency determines that the Company’s facilities must be relocated or
removed because they incommode the public use of the road,highway,or
street,the Company will relocate its distribution facilities from or within the
public road rights-of-way and the Company will bear the costs of such
relocation.
Idaho Power’s Amended Motion further represents that ACHD and the Company
agreed to clarifications to the first sentence of the third paragraph of Section 10.That paragraph
concerns the Company’s efforts to recover relocation or removal costs when a third party
requests relocation services.Idaho Power stated that the only disagreement from ACHD is in the
last sentence proposed by Idaho Power.Idaho Power Amended Motion,p.2.The third
paragraph of revised Section 10 states:
If the Company determines that if one or more Private Beneficiaries has,
directly or indirectly through a Public Road Agency,requested that the
Company’s facilities be relocated or removed for the benefit of the Private
Beneficiaries,the Company will use reasonable efforts to recover that portion
of the total Relocation or removal costs attributable to the request from the
Private Beneficiaries.If the Private Beneficiaries dispute the Company’s
calculation of the Private Beneficiaries’cost responsibility,either the
Company or the affected Private Beneficiaries may initiate a proceeding to
have the Commission establish the reasonableness of the Company’s
calculation of the Relocation or removal cost responsibility as between the
Company and the Private Beneficiaries.
ORDER NO.32476 5
idaho Power contends the last sentence of the paragraph is appropriate and necessary.The
Supreme Court acknowledged that the Commission has authority to determine the costs that
Idaho Power can charge a private person who requests service from the Company,but the Court
does not address the respective rights and responsibilities of the Commission,the private party,
and the Company when the private party requests a relocation of utility facilities located in a
public road right-of-way.”Idaho Power Amended Motion,pp.2-3.Idaho Power contends the
last sentence makes clear that private parties requesting utility relocation services are responsible
to pay relocation costs associated with their projects.In addition,the Company asserts that the
proposed language notifies parties that the Commission in its ratemaking capacity may determine
the reasonableness of the Company’s charges for providing relocation services if there is concern
that the Company incorrectly calculated its costs.Idaho Power Amended Motion,p.3.
A CHD ‘s Memorandum
ACHD filed a Memorandum in Opposition to Idaho Power’s Amended Motion on
January 26,2012.ACHD sets out five conclusions it believes the Supreme Court reached in its
decision,and asserts that the tariff as revised “contains language that directly contradicts the
Idaho Supreme Court’s Opinion.”ACHD Memorandum,p.3.ACHD presents three main
arguments for the Commission’s rejection of idaho Power’s revisions to Section 10.We will
address ACHD’s objections in our review of the revised terms of the tariff.
Contrary to Idaho Power’s representations.ACHD claims it reached no agreement
regarding any of the language in the revised sections.
Commission Decision
When an Order of the Commission is set aside in whole or in part by the Supreme
Court,the Commission thereafter “may alter or amend the order appealed from to meet the
objections of the court.”Idaho Code §61-629.The specific objections of the Court were
twofold:Section 10 impermissibly authorized the Commission to require a third party to pay for
relocation services not requested by the party,and Section 11 too broadly directed parties not
regulated by the Commission to comply with the statutory obligation to plan road projects so as
to minimize the relocation of utility facilities.Revisions to the tariff that address these specific
Supreme Court objections can be approved by the Commission.
ORDER NO.32476 6
A.The Revised First Paragraph
ACHD objects to the second sentence in the first paragraph of the revised Section 10.
The sentence reads:“When the Company is notified of a road improvement project pursuant to
Idaho Code §40-210,the Company will meet with the Public Road Agency as provided in Idaho
Code §40-210.”A similar provision in Section 11 of the objectionable tariff was set aside only
because it included a reference to “other parties”that will comply with Idaho Code §40-210,
The revised sentence removes the reference to “other parties”,and now confirms only Idaho
Power’s legal obligation to meet with road agencies when notified of a project by the agency.
ACHD nonetheless objects to the revised language,apparently based merely on the reference to
Section 40-210 in the sentence.ACHD states the Court “held that the Commission does not
have authority under Idaho Code §40-210 and the second sentence of the proposed first
paragraph of section 10 expressly contradicts the Idaho Supreme Court’s opinion.”ACT-ID
Memorandum,p.11.
The second sentence in the first paragraph appropriately addresses the objection of
the Supreme Court by removing the reference to “other parties.”Accordingly,the Commission
approves the first paragraph in the revised Section 10.
B.The Revised Second Paragraph
ACHD also objects to the second paragraph of the revised tariff.That paragraph is
the following:
If a Public Road Agency determines that the Company’s facilities incommode
the public use of any road,highway,or street,the Public Road Agency can
require the company to relocate or remove the facilities.If a Public Road
Agency determines that the Company’s facilities must be relocated or
removed because they incommode the public use of the road,highway,or
street,the Company will relocate its distribution facilities from or within the
public road rights-of-way and the Company will bear the costs of such
relocation.
ACHD contends the paragraph “attempts to establish limits as to when a Public Road Agency
‘can require’Idaho Power to relocate or remove its facilities from the public rights-of-way and
when Idaho Power will bear the cost of such relocation.”ACHD Memorandum,p.12.ACHD
asserts the paragraph “expressly contradicts the Idaho Supreme Court’s opinion and does not
‘meet the objections of the court.”Id.
ORDER NO.32476 7
ACHD’s objection to the second paragraph cannot result from the Court’s decision,
or from reasoned logic.First,the paragraph is virtually identical to language in the appealed
tariff,and the Court did not set aside the provision.The revised paragraph does not address an
objection raised by the Court because no objection was stated.Second,the paragraph is no more
than a statement of the well-established common law rule requiring utilities to move facilities
that incommode the public’s use of roadways.The first sentence is almost a quote of the
Supreme Court’s statement of the rule:“If ACHD determines that Company’s facilities
incommode the public use of any road,highway,or street,ACHD can require Company to
relocate the facilities.”ACHD v.IPUC,253 P.3d at 678.ACHD does not state a valid objection
to the second paragraph,and the Commission thus approves it.
C.The Revised Third Paragraph
ACHD objects to the third paragraph in the revised tariff,which is the following:
If the Company determines that if one or more Private Beneficiaries has,
directly or indirectly through a Public Road Agency,requested that the
Company’s facilities be relocated or removed for the benefit of the Private
Beneficiaries,the Company will use reasonable efforts to recover that portion
of the total Relocation or removal costs attributable to the request from the
Private Beneficiaries.If the Private Beneficiaries dispute the Company’s
calculation of the Private Beneficiaries’cost responsibility,either the
Company or the affected Private Beneficiaries may initiate a proceeding to
have the Commission establish the reasonableness of the Company’s
calculation of the Relocation or removal cost responsibility as between the
Company and the Private Beneficiaries.
ACHD incorrectly states that the Supreme Court’s decision includes a holding that “the
Commission does not have ‘authority to determine whether the relocation,in whole or in part,is
for the benefit of a third party.”ACHD Memorandum,p.12,quoting from ACHD v.IPUC,253
P.3d at 682-83.The phrase ACHD quotes from the Court decision is not part of a holding,it is
part of the Court’s description of the application of the old tariff,as follows:
IPUC certainly has the authority to determine the costs that Company can
charge a private person who requests services from Company.However,
Section 10 goes further than that.Under Section 10,when a Public Road
Agency requires that Idaho Power relocate its distribution facilities,IPUC has
the authority to determine whether the relocation,in whole or in part,is for
the benefit of a third party.If it determines that it is,then Section 10 would
allocate all or a portion of the costs of relocation to that third party.Thus,
IPUC could require a third party to pay for services that the third party did not
ORDER NO.32476 8
request from Company if IPUC determined that a relocation required by a
Public Road Agency benefited the third party.
ACHD v.JPUC,253 P.3d at 682-83 (italics added to phrase quoted by ACHD).It is clear in this
context that the Court’s objection was to the possibility the Commission “could require a third
party to pay for services that the third party did not request.”It is a misstatement to say “the
express holding of the Idaho Supreme Court was that the Commission does not have ‘the
authority to determine whether the relocation,in whole or in part,is for the benefit of a third
party.ACHD Memorandum,p.7.
Section 10 would have authorized the Commission in some circumstances to require
a third party to pay for services that the third party did not request from Idaho Power.A holding
that the Commission is not authorized to direct a third party to pay for services it did not request
from Idaho Power is noticeably different than saying the Court expressly held the Commission is
not authorized to determine whether facility relocation benefited a third party.In response to the
Court’s concern that the earlier tariff allowed a cost determination against a party for services not
requested,the tariff as revised applies only where a third party requests relocation services.The
revised sentence thus addresses the Court’s objection,and can be approved.
Finally,ACHD objects to the second sentence in the third paragraph.ACHD states
the provision contradicts a Supreme Court conclusion,and Commission admission,that “the
Commission does not have authority to adjudicate disputes between Idaho Power and Private
Beneficiaries.”ACHD Memorandum,p.13.ACHD argued on appeal that Section 10 purported
to give the Commission authority to resolve disputes between road agencies and unregulated
entities involved in a project.In response to ACHD’s argument,the Commission pointed out
that no part of the Rule H tariff contained a dispute resolution provision.In its Memorandum,
ACHD now correctly points out that ‘Section 10 has never contained a dispute resolution
provision,”and that on appeal “the Commission explained that ‘[tjhere is no dispute resolution
term in any part of the line extension tariff,and no discussion by the IPUC of a dispute
resolution provision in either [Final]Order No.30853 or [Final Order on Reconsideration]Order
No.30955.”ACHD Memorandum,p.8.It twists this context for ACHD to assert the
Commission made a “clear statement on appeal that the Commission does not have authority to
resolve disputes between Idaho Power and Private Beneficiaries.’Id.
ORDER NO.32476 9
Later in its Memorandum,ACHD parenthetically quotes the following dicta in the
Court’s decision:“During oral argument.IPUC admitted that it could not adjudicate the dispute
between the third party and Company.It also admitted that if Company wanted to recoer
relocation costs from a third party,it would have to sue in court and Section 10 would not
apply.”ACHD v.IPUC,253 P.3d at 683.The old tariff required a third party to pay the same
percentage of Idaho Power’s relocation costs as ACEID had determined the third party would pay
for the entire road project.In this context,the Commission agreed it could not adjudicate a
dispute between Idaho Power.ACID and the third party over ACHD’s determination of cost
responsibility.Nor can the Commission award money damages.Idaho Power would ha’e to
pursue that remedy in court.
Nowhere does the Court’s decision say the Commission cannot adjudicate a dispute
between Idaho Power and a third party involving services requested by the party under a proper
idaho Power tariff.In fact,the Court specifically affirmed that “IPUC certainly has the authority
to determine the costs that Company can charge a private person who requests services from
Company.”ACED v.JPUC,253 P.3d at 682.Similarly,the Commission has authority to
resol4e a dispute between Idaho Power and the person requesting service over the determination
of those costs.Idaho Code §61-612 authorizes the Commission to hear complaints regarding
iiny act or thing done or omitted to be done by any public utility including any rule,regulation
or charge heretofore established or fixed by or for any public utility,in violation,or claimed to
be in violation of any provision of law or of any order or rule of the commission.”
Idaho Power’s tariff revisions properly address the objections of the Supreme Court.
1 he first sentence of paragraph three,however,can be improved by removing two phrases.The
first phrase of the sentence (“If the Company determines that”)is superfluous.The focus
properly is on a request made by the third party,made either directly or indirectly through a road
agency.Likewise,the phrase “for the benefit of the Private Beneficiaries,”is not necessary.
Presumably if a private party makes a request for relocation service,it is for the requester’s
benefit.Without the two phrases,the sentence would read:“If one or more Private Beneficianes
has,directly or indirectly through a Public Road Agency,requested that the Company’s facilities
be relocated or removed,the Company will use reasonable efforts to recover that portion of the
total Relocation or removal costs attributable to the request from the Private Beneficiaries.”
ORDER NO.32476 10
The Commission approves the revised Sections 10 and 11 of Idaho Power’s Rule H
tariff,including the change to the first sentence of paragraph three discussed above.The
Company is directed to file the appropriate tariff sheets consistent with this decision.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company file revised tariff sheets for
Sections 10 and 11,Rule H,as set forth in this decision.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of March 2012.
PAUL KJELIJANDER,PRESIDENT
MACK A.REDFORD,COMMISSIONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
ii7tt
Jeñ D.Jewell (j
Cohimission Secretary
bls/O:IPC-E-08-22wsRemand
ORDER NO.32476 11