20100106Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
Rcr:i; l\).'''~.. L. '-1 i_ j ;,
20m JAN -6 AM 9= 40
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AUTHORITY) CASE NO. IPC-E-09-31
TO SELL TO RAFT RIVER RURAL ELECTRIC)
COOPERATIVE, INC. CERTAIN ELECTRIC )
DISTRIBUTION FACILITIES CURRNTLY ) COMMENTS OF THE
OWNED BY IDAHO POWER. ) COMMISSION STAFF
)
)
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure in Order No. 30963 issued on December 16,
2009, submits the following comments.
BACKGROUND
On November 10,2009, Idaho Power Company ("Idaho Power" or "Company") fied
an Application with the Commission for authority, pursuant to Idaho Code § 61-328 and RP 52,
to sell to Raft River Electric Cooperative, Inc. ("Raft River") certain electric distribution
facilities and appurtenant rights-of-way owned by Idaho Power in southern Twin Falls County,
Idaho. On December 21,2009, the Company fied an Amended Application with the
STAFF COMMENTS 1 JANUARY 6, 2010
Commission adjusting the sales price to Raft River; no other portions of the Application were
changed.
Raft River is a non-profit cooperative electrical corporation, incorporated under the
laws of the State of Idaho, providing retail electric service to its members in the States of Idaho,
Utah, and Nevada. Raft River is headquarered in Malta, Cassia County, Idaho. Raft River is
not subject to regulation by the Commission.
Idaho Power has agreed to sell to Raft River the portion of the Border 011 Feeder
Line ("Feeder Line") located in the State ofIdaho. The Feeder Line is used solely to serve Raft
River and is classified as a dedicated distribution primar facility.
The wholesale transportation of energy across the Feeder Line to Raft River's
facilities is subject to FERC jurisdiction. The charges assigned to Raft River in the FERC
jurisdiction significantly exceeds the costs associated with this dedicated feeder. To help restore
a reasonable cost causation balance for Raft River, Idaho Power has agreed to sell the remaining
1.5 miles of the Feeder Line.
Idaho Power's method of valuation for the Feeder Line, including appurtenant right-
of-way permits, wil be the net book cost as valued on Idaho Power's books and records
immediately prior to the closing date adjusted. Idaho Power estimates that the sale price wil be
approximately $44,000.
Idaho Power does not use the Feeder Line to serve any of its retail customers.
ST AFF ANALYSIS
On November 14,2000, Idaho Power Company and Raft River Rural Electric
Cooperative filed a Joint Application requesting Commission approval of the sale to Raft River
of certain Idaho Power electrical distribution facilties in southern Owyhee County, Idaho (Case
No. IPC-E-00-17). In that Application, Idaho Power "determined it would be desirable to sell
and transfer its Nevada retail distribution operations to (Raft River)." Under an Asset Purchase
Agreement executed by the parties, Idaho Power proposed to sell the distribution facilties,
pertinent rights-of-way and personal property used to serve approximately 1,250 Idaho Power
customers in Nevada and approximately 90 customers in Idaho. Idaho Power's distribution line
that served its nortern Nevada customers was also the only distribution line serving the small
number of customers in Idaho. On February 1,2001, the Commission issued Order No. 28631
STAFF COMMENTS 2 JANUARY 6, 2010
approving the Application. At the time, Idaho Power sold all the facilities serving the Raft River
terrtory except the Border 011 Feeder Line which is the subject of this case.
The Idaho portion of the Feeder Line that is the subject of this case consists of
approximately 30 poles and 1.45 miles of distribution line. This Feeder Line rus parallel to
US Highway 93 from Border Substation to the Idaho-Nevada border just north of Jackpot,
Nevada. In addition to the line immediately adjacent to US Highway 93, a small line section
extending from the Border Substation to the Feeder Line is included in the sale. In this small
line section, Idaho Power wil sell the conductor to Raft River but retain ownership of
approximately four poles. A pole attachment agreement between Idaho Power and Raft River
has not been made but the Company stated it plans to negotiate this agreement in the near future.
The Border 011 Feeder Line that the Company wants to sell to Raft River has an
estimated book value of $43,277. Staff reviewed the valuation information provided by the
Company and found the valuation to be reasonable. Staff wil review and verify the final book
value/sales price once the transaction is complete and closing documents are available.
Pursuant to Idaho Code § 61-328, the Idaho Public Utilties Commission is charged with
the responsibilty to review the sale of electric public utility property to ensure that (1) the
transaction is consistent with the public interest, (2) the cost of electricity and service rates wil
not be increased because of the transaction, and (3) the buyer of the electric utilty's property has
both the intent and the financial ability to operate the property in the public service. Staff has
reviewed the information provided in this Application and with Staffs audit and investigation
has found nothing inconsistent with the findings in Order No. 28631 (IPC-E-00-17). The
testimony and exhibits presented in Case No. IPC-E-00-17 supported the findings necessary for
the Commission to approve the original sale of associated property. The current proposed sale of
the Border 011 Feeder Line is also in the public interest as it better assigns the responsibilty to
maintain the line to Raft River and its customers served by the line. Idaho Power does not have
retail customers served by this line. The sale wil reduce future costs to Raft River customers.
The dollar amount is immaterial to Idaho Power's operations and wil have very little impact on
Idaho Power customers. As in Case No. IPC-E-00-17, Order No. 28631 Raft River continues to
have the both the intent and the financial ability to operate the property in the public service.
Therefore, Staff believes it is reasonable for Idaho Power to sell to Raft River this portion of the
Border 011 Feeder Line located in the State ofIdaho.
STAFF COMMENTS 3 JANUARY 6,2010
STAFF RECOMMENDATION
Upon review of the Company's Application, the related Case No. IPC-E-00-17, Order
No. 28631, and Staff s investigation, Staff recommends that the Commission approve Idaho
Power Company's Application to sell the Border 011 Feeder Line to Raft River.
Staff also recommends that Idaho Power fie the following documents with the
Commission: (1) the anticipated related accounting entries no later than seven days prior to the
closing date of the transaction, (2) the actual closing documents and related accounting entries no
later than seven days after the closing date, and (3) the pole attachment agreement for Raft
River's use ofIdaho Power's poles no later than seven days after the closing date.
Respectfully submitted this ØJ day of Januar 2010...-
"
Neil Price
Deputy Attorney General
Technical Staff: Cecily Vaughn
TJ Golo
i:umisc/comments/ipce09.31npcvtj comments.doc
STAFF COMMENTS 4 JANUARY 6, 2010
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 6TH DAY OF JANUARY 2010,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-09-31, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
BARTON L KLINE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: bklinet$idahopower.com
JOHNRGALE
VP REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rgalet$idahopower.com
Jo~-SECRETARY
CERTIFICATE OF SERVICE