20191004Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BAR NO. 9917
RECEIVED
?fii* OCT -h fiH 9: 58
Street Address for Express Mail:
472 W , WASHINGTON
BOISE, IDAHO 83702-59I8
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER'S
APPLICATION FOR AUTHORITY TO
TRANSFER TITLE OF GOLDEN HILLS
MOBILE HOME PARK METER PEDESTALS
CASE NO. IPC.E.I9-26
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
In l976ldaho Power ("Company") installed meter pedestals at Golden Hills Mobile
Home Park ("Golden Hills") where it has since maintained them. Since March 3 I , 1981 , new
mobile homes have been served by pedestals owned and maintained by customers as per ldaho
Power's Rule H, Section (2Xg) under General provisions, which states, "owners of mobile home
courts will install, own, operate, and maintain all termination poles, pedestals, meter loops, and
conductors from point of delivery" (emphasis added).
On August 1,2019, the Company filed an Application with the Commission seeking
approval of two (2) Transfer of Title Agreements ("Agreements") allowing the transfer of 170
STAFF COMMENTS OCTOBER 4,2019
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meter pedestals within Golden Hills located in Pocatello, from the Company to the owners of
Golden Hills, J.L.P. Trust and JCS Properties (collectively the "Trust").
In its Application, the Company asked the Commission to approve the Agreements it
entered into with the Trust. The first agreement, dated November 6,2018, encompasses 22
meter pedestals. The second agreement, dated July 16, 2019, encompasses 148 meter pedestals
Copies of the Agreements are attached to the Application.
The Company indicated the lots at Golden Hills are individually metered and the
Company has a direct billing relationship with one (1) or more tenants at each lot.
Although no money will be exchanged under the Agreements, the Company will update
the meter pedestals before transferring them to the Trust. The Trust will have an opportunity to
inspect all meter pedestals before transfer, but the Company will not warrant upgrades to the
pedestals.
STAFF REVIEW
Commission Order No. 34439 designated the Company's Application be processed using
Idaho Code $ 6l-328(3) as the proper statutory authority. In Case No. IPC-E- 16-07 , similar to
this case, the Commission found it appropriate to use Section 61-328(3) "as guidance when
evaluating a utility's proposal to transfer certain assets that historically have been devoted to
serving only a single customer." See Order No. 33514. Based on this, Staff reviewed the
Company's request to transfer these pedestals using Section 6l-328(3) as a guide for this
transaction. Section 61-328(3) sets forth the following requirements:
a. The transaction is consistent with the public interest;
b. The cost of and rates for supplying service will not be increased by reason of the
transaction; and
c. The applicant acquiring the property has the bona fide intent and financial ability
to own and maintain the property in public service.
Consistent with the Public Interest
The Golden Hills meter pedestals were initially placed into service in 1976 and as a result
are owned and maintained by the Company. By transferring ownership of the pedestals to
Golden Hills, consistent with pedestal-ownership for mobile home parks that established service
STAFF COMMENTS OCTOBER 4,20192
after 1981, and by ensuring that the pedestals are in safe operating condition prior to transfer,
Staff believes that the Company's proposal is consistent with the public interest.
Transferring ownership of the pedestals proposed in the Application allows the Company
to treat these mobile home park owners the same as other similarly situated property owners who
established service after 198 I . Upon approval of this transfer, the Golden Hills meter pedestals
will become the property of the Trust.
The Company has proposed to upgrade the Golden Hills meter pedestals, including
inspection by the local electrical inspector, prior to transfer to assure compliance with current
applicable electrical codes. Staff believes these upgrades will ensure more reliable and
continued safe service to these customers.
No Increase to Cost or Rates
The Company is not directly paying money to, or receiving money from, the Trust as part
of the proposed transfer. However, the Company is spending approximately $1,300 to upgrade
each meter pedestal and will physically transfer a meter pedestal housing and a 200 amp main
breaker valued at $467 .82 each to the Trust. Response to Production Request No. 6. In total, the
cost to upgrade the 170 meter pedestals is approximately $221,000 and the actual meter pedestals
that are transferred are valued at approximately $79,529.
The Company did not perform a cost/benefit analysis to support its claim that the
proposed transfer will not increase customer rates. The Company claims that the benefit of
eliminating the long-term maintenance and repair expense of owning the meter pedestals is
greater than the costs of upgrading them. Application at 5. The Company based its justification
on information from Case No. IPC-E-93-19, which stated as of 1993, it had difficulty finding
replacement parts for older meter pedestals and labor and vehicle expenses amounted to $41,000
annually. Although the Company did not provide updated annual maintenance expenses, the
Company expects expenses to be higher now than in 1993. Response to Production Request
No.5.
Staff believes that ongoing maintenance expenses will be eliminated for the 170 pedestals
at Golden Hills once the transaction is complete. The Company will incur expense related to the
transaction for updating the meter pedestals from 100 amp to 200 amp, but by removing these
pedestals from the Company's plant in service, the Company will no longer receive return on, or
STAFF COMMENTS OCTOBER 4,2019aJ
of, its investment. Furthermore, by not owning the pedestals the Company will no longer bear
any future liability associated with the pedestals. Staff believes that the upfront costs will be less
than the long-term savings from the transfer of all 170 meter pedestals.
Staff reviewed the Company's proposed accounting entries related to the transfer and
confirmed that rate base will not increase as a result of the proposed transaction.
Intent and Financial Ability to Maintain Property
Idaho Code $ 6l-328(3Xc), requires that "the [party] acquiring the property has the bona
fide intent and financial ability to own and maintain the property in public service." This
requirement does not fully apply in this case because the property is not, and would not be,
maintained in public service once transferred to the Trust. Nevertheless, the Trust has significant
financial interest in maintaining and operating the property in a manner that preserves the value
of the lots for lease within the Golden Hills Mobile Home Park. Application at 5.
STAFF RECOMMENDATION
Staff believes the Agreements between Idaho Power and the Trust conformto ldaho
Code $ 6l-328(3).
Staff thus recommends:
o The Commission continue to use Section 61-328 as a basis for transferring meter
pedestal in the future;
o The Commission approve the transfer of the 170 meter pedestals as proposed by
the Company within the two Agreements with the Trust; and
o The Company in any future meter pedestal transfer filings provide a current
cost/benefit analysis to support the transfer.
4STAFF COMMENTS ocToBER 4.20t9
Llb
Respectfully submitted this day of October 2019.
Hardie
Deputy Attorney General
Technical Staff: Brad lverson-Long
Rick Keller
Kevin Keyt
r : umisc/comments/ipce I 9.26dhblrkkk comments
5STAFF COMMENTS OCTOBER 4,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 4th DAY OF OCTOBER 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN CASE
NO. IPC-E-19-26, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE rD 83707-0070
E-mail : [e-mail]
[e-mail]
SECRETARY
CERTIFTCATE OF SERVICE