20240118Comments of the Commission Staff.pdf

ADAM TRIPLETT
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10221
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMP ANY'S APPLICATION FOR AN
ORDER APPROVING THE TRANSFER OF
CERTAIN ASSETS ASSOCIATED WITH
TRANSMISSION PLANT HELD FOR
FUTURE USE
)
) CASE NO. IPC-E-23-31
)
)
) COMMENTS OF THE
) COMMISSION STAFF __________________ )
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission, by and
through its Attorney of record, Adam Triplett, Deputy Attorney General, submits the following
comments.
BACKGROUND
On November 8, 2023, Idaho Power Company ("Company"), applied for an order
approving the transfer of an approximately 1.227-acre strip of former railroad line in Valley
County, Idaho, to a private party ("Application"). The Company asserts that the proposed
transfer complies with Idaho Code§ 61-328.
The Company represents that it obtained approximately 90 acres of abandoned railroad
line in Valley County, Idaho, from the Union Pacific Railroad in 1985.
STAFF COMMENTS 1 JANUARY 18, 2024
The Company represents that the proposed transfer at issue in this case would result in
the Company conveying the 1.227-acre strip of the former railroad line to adjacent private
landowners, with the Company retaining a powerline easement over the entire parcel.
The Company represents that the proposed sale price of $2,000 is the market value of the
property.
The Company represents that the proposed transaction satisfies Idaho Code§ 61-328
because it will relieve the Company of maintenance costs related to the parcel without
relinquishing the right to use it for a transmission corridor in the future while simultaneously
conveying the parcel to individuals who intend to farm or otherwise maintain it.
STAFF ANALYSIS
Staff reviewed the Company's Application, responses to production requests, and
additional supporting documents. Staff believes the Company's request is reasonable and that
the sale is in the interest of both the Company and its customers. Staff recommends the
Commission approve the proposed conveyance of land.
Idaho Code § 61-328
The Company must obtain approval from the Commission before it sells or transfers
ownership of any property that is located in Idaho and used in the generation, transmission, or
distribution of electricity in Idaho. Idaho Code § 61-328(1 ). The Company has previously
conveyed parcels ofland from the 1985 original purchase of 150.03 acres from Union Pacific
Railroad Company, leaving the Company with a remaining 59.40 acres. See Company Response
to Production Request No. 2.
For this certain parcel, the Company stated, "[t]here are no additional assets associated
with the transaction and there have been no improvements to the land since Idaho Power's initial
purchase. See Company Response to Production Request No. 2. In Response to Staff
Production Request No. 4, the Company explained how the sale and transfer of the 1.227 acre
parcel complies with Idaho Code § 61-328(3) stating:
a. This transaction is in the public interest as it relieves the Company
of ownership and maintenance responsibilities of the land while still
allowing for use of the land for its intended purpose, not impacting
STAFF COMMENTS 2 JANUARY 18, 2024
Idaho Power's ability to provide safe, efficient, and reliable service
to customers.
b. As evidenced by the proposed journal entries provided as
Attachment 2 to the Application, if no additional expenses are
recorded, the Company anticipates a gain associated with this
transaction. Therefore, the cost of and rates for supplying service
will not be increased by this transaction.
Staff believes that the sale of this parcel is in the public interest and will not impact
current customer rates as there is no Company infrastructure on the parcel at this time. The
Company does not anticipate any additional transfers or sales of parcels of land in the general
vicinity of the proposed transfer. See Company Response to Production Request No. 3. Staff
has reviewed the proposed transaction and believes that it complies with the Idaho Code § 61-
328(3).
Easement Rights
The Company originally purchased the land in 1985 in order to secure a transmission line
corridor. The Company has not yet used the land for a transmission line and the land is
classified as Plant Held for Future Use. The Company does not have any current plans to use the
land, but the Company is retaining easement rights for potential future use. See Response to
Production Request No. 7. This allows the Company to build necessary infrastructure on the
land in the future, if needed.
Based upon the Contract, the Company will not be taking on liabilities by the conveyance
of the land or potential use of the easement right in the future. If the Company were to build on
the land in the future, it would work closely with the landowners in order to try to avoid damages
or disputes. In the event of damage, the Company states that it will not have a financial
obligation to correct damages caused by building a transmission line within the easement rights.
Response to Production Request No. 12. Staff contends that the Company has executed a
Contract which does not jeopardize providing customers safe and reliable service and also
protects itself and customers from financial liability.
STAFF COMMENTS 3 JANUARY 18, 2024
Proposed Accounting
The Company provided its proposed accounting journal entries with its Application. See
Attachment No. 2. Staff reviewed the proposed accounting treatment and determined that all
proposed entries are proper and estimates are reasonable.
The historical price of the land is $1,320.04. Staff verified that this value was accurate
and was calculated based upon the original value of the land, $1,073.21 per acre multiplied by
the 1.23 acres being sold.
The Company is proposing to sell the land for $2,000. The Company states that the value
of agricultural land in Valley County is generally $3,500 to $7,500 per acre. However, because
the land is irregularly shaped and the Company must retain easement rights for potential future
use, the land's market value is greatly reduced. See Response to Production Request No. 10.
Staff agrees that the land is irregularly shaped based upon the Exhibit A-1 provided in the
Application. Staff also agrees that the retainment of easement rights reduces the value of the
land.
The Company determined the value of the easement to be half of the value of the
historical cost of the land, $660.02. See Response to Production Request No. 12. Staff agrees
that the value of the easement is reasonable.
The Company is anticipating incurring closing costs of$30 and selling costs of $1,000.
The closing cost is based upon the cost to record the deed with the state, which is $15 for the first
page and $3 for each additional page. See Response to Production Request No 9. The Company
states that the selling costs are based upon an hourly rate of $65 for internal real estate labor
costs multiplied by a projected 15 hours needed to coordinate and facilitate the transaction. This
results in $975, validating the estimate of $1,000 as reasonable.
Based upon the proposed journal entries, the Company estimates that the sale of land will
result in a gain on disposition of $309.98. Because the closing costs and selling costs are
estimates, this value could change. Staff does not believe that these estimates are materially
different than what the actuals will be. As a result, Staff believes that the Company will have a
gain on disposition as presented in Attachment 2.
STAFF COMMENTS 4 JANUARY 18, 2024
Customer Comments
As required by Idaho Code 61-328(2), the Commission held a telephonic public hearing
on January 5, 2025, in which no testimony was provided. As of January 17, 2024, no public
comments have been filed for this case.
STAFF RECOMMENDATION
Staff recommends the Commission issue an Order that authorizes the Company's
proposed sale of land as detailed in the Application.
Respectfully submitted this 18th day of January 2024.
Technical Staff: James Chandler
Kimberly Loskot
i:umisc/comments/ IPC-E-23-31 Comments
STAFF COMMENTS
A& 2M//4f;
Deputy Attorney General
5 JANUARY 18, 2024
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 18th DAY OF JANUARY 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF TO
IDAHO POWER COMPANY, IN CASE NO. IPC-E-23-31, BY E-MAILING A COPY
THEREOF, TO THE FOLLOWING:
LISA D NORDSTROM
IDAHO POWER COMP ANY
POBOX70
BOISE ID 83707-0070
E-MAIL: [e-mail]
[e-mail]
ROBERT & BARRI HAMEL
143 WILDE PL
McCALL ID 83638
MATT LARKIN
IDAHO POWER COMP ANY
POBOX70
BOISE ID 83707-0070
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE