20210817Petition to Intervene.pdf

Ronald L. Williams,ISB No. 3034
Williams Bradbury, P.C.
P.O. Box 388
Boise ID, 83701
Telephone : [phone]
ron@williamsbradbury. com
Attorneys for Blaine County
BEFORE TIIE IDAIIO PUBLIC UTILITIES COMMISSION
' | "'! O'r q' tQ..iiiir+'t-"
IN THE MATTER OF THE PETITION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A CUSTOMER
SURCHARGE AND MODIFIED LINE
ROUTE CONFIGURATION FOR
CONSTRUCTION OF A NEW 138 KV
TRANSMISSION LINE IN THE WOOD
RTVER VALLEY
Case No. IPC-E-21-25
PETITION OF BLAINE COUNTY
FOR LEAVE TO INTERVENE
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Pursuant to Rules 7l through 73 of the Idaho Public Utilities Commission's Rules
of Practice and Procedure, IDAPA 31.01.01 .71 et. seq.,the Blaine County Board of County
Commissioners ("Blaine County" or "Board") petitions the Idaho Public Utilities
Commission ("Commission" or o'Idaho PUC") for leave to intervene. In support of this
Petition, Blaine County states as follows:
l. The name and address of Intervenor is:
Blaine County Board of County Commissioners
206 South l't Ave
Hailey, ID 83333
2. Blaine County will be represented in this proceeding by Williams Bradbury,
P.C. All documents relating to these proceedings should be served on the following
persons at the addresses listed:
Ronald L. Williams
Williams Bradbury, P.C.
P.O. Box 388, Boise ID, 83701
Telephone: [phone]
Email: ron@wi lliamsbradbury.com
BLAINE COUNTY PETITION TO INTERVENE, PAgC I
Timothy K. Graves
Chief Deputy Prosecuting Attorney
219 First Avenue South, Suite 201
Hailey ID, 83333
Email: [e-mail]
IELECTRONIC COPIES ONLY TO:l
Bradley Mullins
MW Analytics, Energy & Utilities
Email : brmullins@mwanalytics. com
3. Blaine County is a body politic and corporate, as established in Idaho Code
$ 31-109, with all pow€rs conferred on it pursuant to Title 31, Idaho Code, as well as all
powers conferred under Idaho's Local Land Use Planning Act, Title 67,Clraip1.s,r 65.
4. The petition by Idaho Power Company ("IPC" or the "Company") for
approval of a surcharge on IPC customers living within Blaine County, and of a modified
line route between the towns of Hailey and Ketchum, significantly affects the citizens of
Blaine County and their local govemmental representative, the Board of County
Commissioners. The Board has a direct and substantial interest in this proceeding that will
not be adequately represented by any other party. The Board intends to participate in all
aspects of this proceeding and will not unreasonably broaden the issues, burden the record,
or delay this proceeding. Without the opportunity to intervene herein, the Board would be
without a manner or means of participating in the lawful determination of issues which will
affect the revised line route and design, and the rates for electic service from the Company
to Blaine County homeowners and businesses.
5. The Board respectfully submits this filing as an intervention in support of
the Company's petition to levy a surcharge upon IPC customers within Blaine County for
the purpose of collecting the funds necessary to reimburse IPC for fully undergrounding
its electrical distribution lines between the cities of Hailey and Ketchum and partially
undergrounding its redundant transmission line along the same proposed route. The
following paragraphs further explain Blaine County's role in this line route permitting
process as well as the Board's position of support for the Company's petition.
6. For many years, the Company and local leaders have discussed IPC's
perceived need for a redundant transmission line to provide electric service to northern
Blaine County, including the cities of Sun Valley and Ketchum. These discussions resulted
in a citizen's advisory committee (CAC) that evaluated potential siting for the transmission
BLAINE COUNTY PETITION TO INTERVENE,Page 2
line, which resulted in IPC filing a conditional use permit (CUP) application with the
County to construct an overhead transmission line runningbetween the cities of Hailey and
Ketchum in20l6.
7 . In its first CUP application, the transmission line was proposed to be located
adjacent to residential areas, along and across Highway 75 within the Scenic Highway
Overlay District, through the area of McHanville which includes the St. Luke's Regional
Medical Center, and along the Wood River Trails bike path in several areas before going
underground as it moves north at the intersection of Highway 75 and Elkhorn Road. The
CUP application proposed to replace existing distribution poles and lines along the route
with new, larger, poles that would carry both transmission and distribution lines, as well as
existing communications line on these new poles. The Company's CUP application would
have increased the height of existing pole structures between Hailey and Ketchum
anywhere from four to fifteen feet per pole. Additional pole structures were also necessary
in some areas, and the combination transmission-distribution line would cross Highway 75
in one location.
8. The Blaine County Planning andZoningCommission(P&Z Commission)
held four public hearings and one public workshop to consider IPC's CUP application on
October 13,2016, October 29,2016 (workshop), November 10, 2016, December 1,2016,
and January 5,2017. At the hearings, theP&Z Commission received testimony from
proponents of the project, neighbors concerned with their property values, other citizens
regarding the need for a redundant transmission line, as well as complaints about the
proposed line's aesthetic impact and health hazards. Following deliberations, a majority
of the P&Z Commission voted to deny the CUP application after making negative findings
on several standards of evaluation set forth in Blaine County Code Section 9-25-3.
Specifically, the Commission determined that the proposed transmission line was not in
accordance with the Comprehensive Plan, was not harmonious with the character of the
area, was hazardous and disturbing to neighboring uses, would create excessive
requirements at public cost, and would damage nafural and scenic areas of major
importance.
9. The Company appealed the P&Z Commission's decision to the Board and
the Board, ina2 to 1 decision, affirmed theP&Z Commission's denial of IPC's CUP on
September 12, 2017. In its Decision on Appeal, the Board agreed with the P&Z
BLAINE COIINTY PETITION TO INTERVENE, Page 3
Commission's decision and determined that the proposed transmission line did not satisfu
conditional use permit criteria relating to compliance with the Comprehensive Plan,
compatibility with the existing or intended character of the area, disturbance with
neighboring uses, excessive public costs, and damage to areas of scenic importance. More
generally, the Board determined that the aesthetic impacts of a new transmission line
running through the Highway 75 corridor, which is an area of profound scenic value in
Blaine County, far outweighed the improved service that would come with a redundant
line.
10. As the zoning proceedings were pending before Blaine County, IPC
concurrently sought a Certificate of Public Convenience and Necessity (CPCN) from the
Idaho PUC, seeking a determination that the proposed transmission line was necessary in
the location and design as proposed by the Company. Because there were active zoning
applications pending before it, Blaine County did not participate in the Idaho PUC
proceedings on the proposed CPCN, as doing so would lead to the considerationof ex parte
information as well as potential claims of bias among the County decision-makers. These
parallel tracks of Idaho PUC and County proceedings made it impossible for Blaine County
to appear before or consult with the Idaho PUC, as required by Idaho Code Section 67-
6528, in its consideration of the CPCN.
11. The Idaho PUC approved the Company's CPCN application in Order No.
33872 on September 15, 2017, three days after the Board's decision to affirm theP&Z
Commission's denial ofthe overhead transmission line. The Idaho PUC decision explained
that "we approve [Idaho Power's] requested route of overhead transmission from the Wood
River substation to the transition point near Elkhorn Road, then underground transmission
to the Ketchum substation." Noteworthy in the Idaho PUC's Order of CPCN approval was
the Commission's encouragement that "all interested parties [] continue to work together
on these issues, as there may still be opportunities to find areas of common interest and
common ground, notwithstanding the outcome of this proceeding." IPUC Order No.
33872,p. 13.
12. Following the Board's appeal decision denying the CUP and this
Commission's issuance of the CPCN, several mediation sessions were held involving
representatives of the Company, the P&Z Commission, and the Board, where several
possible solutions were discussed, including undergrounding all lines or a portion thereof,
BLAINE COUNTY PETITION TO INTERVENE,Page 4
undergrounding just the transmission line, and various design changes to alleviate visual
and aesthetic impacts. Following these mediation sessions, IPC filed a new CUP
application for a redundant transmission line on November 20,2017, which was similar to
the original application but relied heavily upon the CPCN authorized by Order NO. 33872.
T\eP&Z Commission held four public hearings on November 13, 2018, November 15,
2018, November 27 , 2018, and December 6,2018 and two mediation workshops on June
1,2018 and September 6, 2018. At the hearings, theP&Z Commission considered the
proposal against its standards of evaluation, while also taking into accountthe Idaho PUC's
approval of the CPCN, and funding considerations in the event undergrounding of the line
was pursued.
13. TheP&Z Commission conditionally approved the Company's application
on January 15, 2019, finding that the proposal conditionally met the standards of
evaluation. In laying out conditions of approval, the P&Z Commission adopted a
'opriorities" approach, which prioritized certain conditions that, in the eyes of the P&Z
Commission, would satisff the various standards of evaluation. The first priority "is to
underground the lines, both transmission and distribution, from the Wood River Substation
to the Elkhorn light where it would link with the underground infrastructure headed North
through Ketchum." If funding was not available to accomplish this condition, then further
priorities such as more limited undergrounding, siting adjustments, pole design, and other
mitigation were spelled out that would help alleviate the visual impact of the transmission
line.
14. Several neighboring property owners appealed the P&Z Commission's
decision to the Board, which heard the appeal on May 6,2019. At the close of the Board's
appeal hearing, the Board voted to conditionally approve the CUP application, with the
primary condition that the redundant transmission line be undergrounded. In making this
determination, the Board explained as follows,
[t]he only condition of approval that would allow it to make positive
findings at this time is to underground the entire line from the Wood River
Substation to the haffic light at the intersection of Elkhorn Road and
Highway 75. Undergrounding the redundant transmission line allows for
positive findings on compliance with the Comprehensive Plan, impacts on
neighboring uses, potential hazards and disturbances, and permanent
damage to areas of vital scenic importance. While imposing such a
condition will require difficult discussions on the funding alternatives, the
BLAINE COLINTY PETITION TO INTERVENE, Page 5
Board believes that these funding discussions should be fully exhausted
before any consideration of an overhead transmission line in this area.
Depending upon the results of these funding processes, further
consideration and deliberation may be necessary to "continue to work
together on these issues, as there may still be opportunities to find areas of
corrmon interest and common.ground." BCC Decision on Appeal dated
June 4, 2019, at p.6.
15. Following the Board's appeal decision, the County pursued various funding
alternatives. As its first step the County considered holding elections for a temporary levy
override, a permanent levy override, or an election to incur indebtedness at a much-reduced
interest. Surveying demonstrated a majority of Blaine County voters did not support either
an override or indebtedness election. The temporary (two year) levy override was unlikely
to pass, despite requiring a simple majority, because the County would need to raise $40
million [IPC's construction estimate] over the two-year period. Permanent levy and
indebtedness elections, both of which require a 2/3 supermajority, were also highly
unlikely to pass county-wide.
16. As a second alternative, Blaine County also considered establishment of a
local improvernent district (LID) for undergrounding in accordance with Idaho Code Title
50, Chapter 25,bttt exemptions for city parcels and County parcels greater than five acres
in size made creation of a LID impractical and unfair as many of those benefitting from the
undergtounding would not contribute to the undergrounding cost. On this issue, the County
sought legislative amendments to close these loopholes, but County led legislative efforts
to make the LID process more fair and equitable failed.
17. Failure of the above-described alternatives led the Board to conclude that it
was unlikely that the entire redundant transmission line could be undergrounded at a
reasonable cost to Blaine County residents and taxpayers. Therefore, in mid-2020 the
County and IPC engaged in a series of additional discussions and negotiations to explore
other possible options, "opportunities" and o'areas of common interest and common
ground"l that would maximize the undergrounding of power lines, minimizirrg aesthetic
impacts of those lines, and provide an alternative funding solution. It was over the course
of those meetings that IPC and Blaine County pivoted to a possible solution that involved:
(i) undergrounding all the distribution lines between Hailey and Ketchum, (ii)
I Id., Order No .338'12
BLAINE COUNTY PETITION TO INTERVENE, PAge 6
undergrounding a portion of the new transmission line, and (iii) imposing a 3%o electric
rate surcharge throughout Blaine County to collect the difference between the overhead
and underground construction costs.
18. Even though Blaine County and IPC were now back at the table looking for
solutions, the Board still felt strongly that the Company's proposals were less than
innovative, were aggressive in benefiting IPC shareholders, and were punitive to County
residents. Specifically, the Board challenged IPC's cost assumptions in an effort to reduce
the overall cost of the undergrounding project, estimated by IPC to be a whopping $40
million. Second, the County objected to IPC's 9.59% carrying charge2 applicable to the
overhead-underground cost differential. Regarding the construction costs as originally
estimated, Blaine County and Idaho Power were able to resolve this issue by further
refining and limiting the cost exposure to County ratepayers with a better understanding of
how costs would be trued-up to actual construction costs, and that the estimate of the
hypothetical overhead only line construction costs would also be trued-up.3
19. Little headway was made however regarding IPC's insistence that it recover
a 9.59%o carrying charge for costs related to the overhead-underground cost differential.
Blaine County proposed that because of the unique environmental, aesthetic and wildfire
mitigation measures, that the Company should agree to an alternative financing
arangement that would have cut the f,rnancing charge by over two-thirds. Specifically,
Blaine County asked that Idaho Power debt finance l00o/o of the cost differential with
bonds issued by the Idaho Energy Resources Authority (IERA), similar to two recent
financings the IERA just completed for the Bonneville Power Administration (BPA) and
the City of Idaho Falls (IF Power). Because the IF Power financing was a sale of tax-
exempt bonds, the more appropriate comparison is the BPA bond sale, of $300+ million in
bonds, at a bond yield rate (i.e., carrying charge) of 2.861o/o.a The IF Power bond rate for
the long-term portion of the bonds in that transaction was 1 .74yo.s Under the BPA
transaction, the IERA issued the bonds to finance certain transmission assets of BPA
throughout the Northwest, but then leases those facilities back to BPA, who then operates
2 The Company's pre-tax authorized rate of retum.
3 See p. 20 - 23 of IPC Petition to Approve Surcharge.
a https://iera.info/downloadiBPA-IERA-202 l -'l ransmission-Bonds-OS.pdf
5 https://iera.info/dorvnload/IERA-Ida.-Falls-202 I -Tax-Exempt-Bonds-OS.odf
BLAINE COUNTY PETITION TO INTERVENE, PAgE 7
and maintains them.6 Bonneville has no problem doing lease financing of transmission
facilities that are otherwise integral to its entire transmission system; yet Idaho Power
found the financing alrangement objectionable. Had Idaho Power agreed to this alternative
financing mechanism to reasonably accommodate the citizens of Blaine County, who have
also agreed to be the be the sole payors for this improvementT, it would have allowed for
the undergrounding of approximately $17.6 million of electrical facilities, instead ofjust
$9.8 million. Alternatively, it would have resulted in a surcharge rate of l.7yo, rather than
3%. Clearly, IPC shareholders were the winners on this carrying charge issue, to the
detriment of Blaine County residents who are payrng for it.
20. During the fall of 2020, Blaine County held stakeholder meetings to solicit
public input on the proposed solution. In addition, the County conducted non-scientific
based polling on the question whether County residents would support an electric rate
surcharge to pay for the revised underground/overhead electric line plan. Polling indicated
general public support for the plan, a similar result to the stakeholder meetings.
21. The Company submitted a modified CUP application on December 23,
2020, which was considered by the Board in two meetings in January and February of
2021, culminating in the Board's signed Findings of Fact, Conclusions of Law, and
Decision (Decision) on March 15,2021. In its Decision, the Board explained the rationale
for approving the modified application as follows,
The Board's preferred option is to underground the entire transmission line
to best meet both the objections of the Comprehensive Plan and ... P.U.C.
Order 33872. The undergrounding of the entire l38kv Transmission Line
proved to be cost prohibitive and would therefore cause a significant burden
to county residents. However, the Board finds that the modified conditions
of approval bring it into compliance with the conditional use permit
standards of evaluation and in accordance with the comprehensive plan. The
modified conditions meet the comprehensive plan Aesthetic Values within
the Scenic Corridor by keeping the height of the new poles similar to the
height of the distribution poles along this route today while reducing the
number of powerlines from at least 6 to 3. tn addition, new poles would not
be erected where they do not exist today along Hospital Drive and the bike
path north to Elkhom Rd. While cost was prohibitive for the all-
6 The IF Power transaction was similar in concqrt, except that rather than a lease-back of the facilities from
the IERA to IF Power, the transaction was structured as "Transmission Services Agreement" to comply
with some unique provisions of Idaho municipal law.7'q. Who is responsible for the additional costs of the Owl Rock Road route? A. The additional
incremental cost[s] of the Owl Rock Road Route [] are to be funded by Blaine County customers."
Adelman, DI, p. 20.
BLAINE COUNTY PETITION TO INTERVENE, Page 8
underground condition, the partial undergrounding condition is in
accordance with the desired outcome of reducing the impact on scenic
values and cost to county residents. Based on the conditions attached to this
decision and positive conclusions on the other criteria, the Board finds that
this application complies with the general goals and objectives of the
Comprehensive Plan. The partial undergrounding condition balances the
feasibility of fully undergrounding against the reduction of visual impact as
stated in the comprehensive plan. BCC Findings of Fact, Conclusions of
Law, and Decision (Decision) dated March i,5,2021, at p. 8.
22. This finding, as well as several others made by the Board in its Decision,
reflect the Board's view that (l) full undergrounding remains the best altemative; (2) the
cost and limited funding alternatives available to the Board made full undergrounding
unworkable; (3) the modified proposal reduced the overall visual impact of the project by
incorporating partial undergrounding, undergrounding distribution lines, and reducing pole
numbers; and ( ) the modified proposal balanced funding feasibility and reducing visual
impacts. More broadly, it reflects the Board's general opposition to the transmission line
as well as its grudging acceptance of the modified proposal, including the surcharge, as the
best alternative moving forward. In short, the surcharge, partial undergrounding of the
transmission line, and full undergrounding of existing distribution lines is far preferable
than an overhead transmission line running through the middle of the Wood River Valley's
scenic corridor.
23. For years, Blaine County has engaged with IPC on the need for a redundant
transmission line serving the northern part of Blaine County, while wrestling with visual
impacts that will diminish many of our community's most cherished scenic views.
Consideration of the need for the redundant line was made irrelevant by the Idaho PUC's
2017 issuance of the CPCN, but Blaine County still sees promise in using alternative
energy sources for resilience and redundancy. Through the County's land use process,
detailed above, the County and IPC have worked together "to find areas of common interest
and common ground" in the siting and design of the redundant line as well as existing
distribution lines. Blaine County has pursued legislative amendments, participated in
mediation, run numerous data projections, hired consultants to comb through IPC's cost
projections, hired outside counsel to assist it with funding alternatives, financing options,
and the PUC proceedings, and participated in numerous meetings and discussions in an
attempt to secure the best possible result for the citizens of Blaine County.
BLAINE COTINTY PETITION TO INTERVENE, Page 9
24. While it is not ideal, the surcharge and partial undergrounding solution
being put forward by IPC represents the most realistic and least intrusive option under the
circumstances. It is for this reason that Blaine County supports IPC's request to implement
a surcharge to cover the costs of partially undergrounding the proposed transmission and
existing distribution lines.
WHEREFORE, Blaine County respectfully requests that the Commission
grant its petition to intervene with full party status in this proceeding and to appear and
participate in all matters as may be necessary and appropriate; and to present evidence, call
and examine witnesses, cross-examine witnesses, present argument, and fully participate
in the proceedings.
Dated this 1Zm day of Auzusl2021.
Respectfully submitted,
tst Pxll l. W:ll:ou
Ronald L. Williams
Williams Bradbury, P.C.
Attorneys for Blaine County
BLAINE COUNTY PETITION TO INTERVENE, Page 10