28888.phg.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE PETITION BY PACIFICORP FOR AN ORDER DETER-MINING THAT PACIFICORP IS NOT REQUIRED TO PROVIDE WHEELING SERVICE TO SNAKE RIVER VALLEY ELECTRIC ASSOCIATION. )
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CASE NO. PAC-E-01-6

NOTICE OF
PREHEARING CONFERENCE

ORDER NO.  28888

This case was initiated when PacifiCorp filed a petition pursuant to Idaho Code § 61-332D seeking review of PacifiCorp’s refusal to provide electric wheeling service to Snake River Valley Electric Association (Snake River). Snake River filed a Motion to Dismiss PacifiCorp’s petition, and PacifiCorp subsequently filed a Motion for Summary Judgment on its petition. The Idaho Attorney General filed a Petition to Intervene, but “only in the limited context of opposing Snake River’s present motion [to dismiss].” Petition to Intervene, p. 2. The Commission issued Order No. 28807 granting the Attorney General’s Petition to Intervene for the limited purpose stated in his petition.
The Commission heard oral argument on both the Motion to Dismiss and the Motion for Summary Judgment on September 28, 2001. By this Order the Commission denies Snake River’s Motion to Dismiss and also denies PacifiCorp’s Motion for Summary Judgment. The Motion to Dismiss must be denied because there is no legal basis for the Commission to disregard its statutory duty to review PacifiCorp’s action “for consistency with the purposes and provisions of [the Electric Supplier Stabilization Act].” Idaho Code § 61-332D(2). The Motion for Summary Judgment is denied because the record does not demonstrate all material facts are undisputed. The Commission will convene a prehearing conference on November 20, 2001, to assist the parties in formulating the issues, obtain stipulations as to undisputed facts, schedule a hearing, and for any other purpose set forth in Commission Rule of Procedure 211, IDAPA 31.01.01.211.
HISTORY
A. The Antitrust Action
The genesis of this case predates by several years the petition PacifiCorp filed with the Commission. Snake River in 1997 initiated an action in U.S. District Court after PacifiCorp refused Snake River’s request to wheel power to its members through PacifiCorp’s electric transmission facilities. PacifiCorp refused based on Idaho Code § 61-332B, which then provided that “no electric supplier shall . . . supply or furnish electric service to any electric service entrance that is then or had at any time previously been connected for electric service to facilities of another electric supplier, without the written consent of such other electric supplier.” (Italics added.) The customers Snake River intended to serve all were existing customers of PacifiCorp. In the federal court action, Snake River alleged that PacifiCorp’s refusal to wheel power violated federal antitrust laws. The District Court ruled in favor of PacifiCorp, but the Ninth Circuit Court of Appeals reversed in Snake River Valley Elec. Ass’n v. PacifiCorp, 238 F.3d 1198 (9th Cir. 2001).
The District Court ruling was based on application of Idaho’s Electric Supplier Stabilization Act (ESSA) enacted in 1970, Idaho Code §§ 61-332–61-334B. The ESSA as first enacted restricted competition by requiring a competing provider to obtain permission from the customers’ current electric supplier before providing service to the customers. The customers’ existing provider could simply deny permission to the prospective competitor. PacifiCorp’s refusal to wheel power to Snake River’s prospective customers prevented those customers from leaving PacifiCorp, which action Snake River contended violated federal antitrust laws.
The District Court concluded that the “state action immunity doctrine” barred application of antitrust laws to PacifiCorp’s refusal to wheel electric service to Snake River. The state action immunity doctrine allows a competitive restraint authorized by state law to be immune from federal antitrust laws if the restraint is (1) clearly articulated and (2) actively supervised by the state. See California Retail Liquor Dealers Asso. v. MidCal Aluminum, Inc., 445 U.S. 97, 100 S.Ct. 397, 63 L.Ed.2d 233 (1980) (MidCal).
The Ninth Circuit Court found that the first prong of the MidCal test was satisfied even though the ESSA did not specifically authorize a utility’s refusal to wheel power. The Court noted that “to meet the ‘clearly articulated’ requirement it is not necessary for the state to expressly permit the displacement of competition. Instead, it is only required that ‘suppression of competition is the foreseeable result of what the statute authorizes’.” Snake River Valley Elec. Ass’n, 238 F.3d at 1192, quoting A-1 Ambulance Serv., Inc. v. County of Monterey, 90 F.3d 333, 336 (9th Cir. 1996). The Court concluded there could be no question that Idaho Code § 61-332B would result in a refusal by an electric supplier to wheel power to its former customers. The Court stated it is irrelevant that the ESSA did not expressly prohibit retail wheeling. Snake River Valley Elec. Ass’n, 238 F.3d at 1193.
The appellate court reversed the District Court, however, finding that the second prong of the MidCal test was not met, i.e., that the state did not “exercise ultimate control over the challenged anti-competitive conduct.” Snake River Valley Elec. Ass’n, 238 F.3d at 1193. The Court concluded that “PacifiCorp can, consistent with ESSA, avoid competition for its customers simply by declining to consent [to wheel electricity]—an act undertaken without review by any state agency.” Snake River Valley Elec. Ass’n, 238 F.3d at 1194. The Court found that such a decision is “wholly within the utility’s control and without state supervision the state has, in effect, given the utility partial control over the no-competition policy.” Id. The Court also stated “it should be clear that Idaho’s situation, . . . could be addressed by legislative action providing for supervision.” Snake River Valley Elec. Ass’n, 238 F.3d at 1195.
B. Legislative Response
In response to the Circuit Court’s decision, the Idaho Legislature amended the ESSA to address the deficiency identified by the Court. First, a section was added clearly stating that an electric supplier is not required to provide retail wheeling. Section 61-332D(1) now states that “an electric supplier shall not be required to provide wheeling service over a system if such service results in retail wheeling and/or a sham wholesale transaction.” Second, the legislature provided for oversight by the Commission when a regulated utility denies a request for wheeling service. Paragraph 2 of Section 61-332D requires the Commission to, “upon notice and opportunity for hearing, review the electric supplier’s action for consistency with the purposes and provisions of this act, and issue an order in accordance with its finding, ordering either that the wheeling service shall, or shall not, be required.”
C. The Removal Action
On April 13, 2001, PacifiCorp filed a Petition pursuant to Section 61-332D(2), asking the Commission to review PacifiCorp’s action in denying Snake River’s request for wheeling service, and an order determining that PacifiCorp is not required to provide the wheeling service. Rather than file an answer to PacifiCorp’s Petition, Snake River on May 7, 2001 filed a Notice of Removal of State (IPUC) Case No. PAC-E-01-6 in the United States District Court, District of Idaho, which removed the case to the federal court. PacifiCorp filed a Motion to Remand the case back to the Commission, and following oral arguments on June 27, 2001, the U.S. District Court granted the Motion to Remand. In its Memorandum Decision approving remand to the Commission, the District Court noted that “[t]he amendments to the ESSA are Idaho’s attempt to address issues concerning the regulation of utilities raised by the Ninth Circuit in this case.” Matter of the Petition of PacifiCorp, U.S. District Court, District of Idaho, Case No. Civ. No. 01-0197-E-BLW, Memorandum Decision entered June 29, 2001, p.2. The court concluded remand was appropriate because “[t]he new amendments to the ESSA have never been interpreted by any state court or agency, and given that the Act purports to govern the IPUC, that agency should have the first opportunity to interpret the Act.” Ibid., at p. 3.
PACIFICORP’S PETITION
PacifiCorp affirmed in its petition that it is a “public utility in the state of Idaho and is subject to the jurisdiction of the Commission with regard to its public utility operations.” PacifiCorp Petition, pp. 1-2. PacifiCorp asserts that Snake River “is a non-profit corporation organized under the laws of the state of Idaho for the purpose of buying electric power for resale to its members.” PacifiCorp Petition, p. 2. In light of the amendments to the ESSA, PacifiCorp contends Snake River “seeks wheeling service from PacifiCorp which would be inconsistent with ESSA and which would constitute retail wheeling and/or a sham wholesale transaction.” To support its conclusion, PacifiCorp contends that Snake River “seeks wheeling from certain substations all the way to the existing points of delivery at which PacifiCorp presently delivers electric service to its customers who are members of [Snake River].” PacifiCorp Petition, p. 3.
PacifiCorp identifies the wheeling request by Snake River as specified in a letter dated December 18, 1995. The letter states that “delivery points for this [wheeling] request are the existing delivery points on Utah Power’s system to each of the members of [Snake River].” PacifiCorp Petition, Exhibit B. In addition, PacifiCorp’s petition includes interrogatory responses by Snake River in which Snake River stated “seeks transmission of electric energy purchased from Enron to PacifiCorp’s . . . substations (receipt points), from which PacifiCorp would wheel said electrical energy to individual members of [Snake River] at their points of consumption, (delivery points).” PacifiCorp Petition, p. 4. PacifiCorp states it has declined the request to transmit power over its facilities to Snake River members currently being served by PacifiCorp.
To demonstrate that the wheeling requested by Snake River constitutes retail wheeling or a sham wholesale transaction, PacifiCorp points to a provision of the Federal Power Act enacted in 1992. Section 212(h) of the Federal Power Act, codified at 16 U.S.C. § 824K(h) prohibits the Federal Energy Regulatory Commission (FERC) from ordering retail wheeling or sham wholesale transactions. The provision provides that FERC cannot issue an order for wheeling which shall “be conditioned upon or require the transmission of electric energy: (1) directly to an ultimate consumer or (2) to, or for the benefit of, an entity if such an electric energy would be sold by such entity directly to an ultimate consumer, unless: . . .” certain conditions apply, none of which are applicable here.
PacifiCorp also cites a FERC decision to support its assertion that Snake River’s transmission request amounts to retail wheeling or a sham wholesale transaction. According to PacifiCorp, FERC “has concluded that redundant meters do not constitute distribution facilities, and that wheeling to such a ‘system’ would constitute a sham wholesale transaction.” PacifiCorp Petition, p. 6 citing City of Palm Springs, 76 FERC ¶ 61, 127 (July 31, 1996). Finally, PacifiCorp contends that “wheeling to meters installed or acquired by [Snake River] for the purpose of ‘receiving’ and then ‘reselling’ power wheeled by PacifiCorp to those customer locations would constitute retail wheeling and/or a sham wholesale transaction under Idaho Code § 61-332D.” PacifiCorp Petition, p. 6.
Snake River filed a Motion to Dismiss PacifiCorp’s petition on July 9, 2001.
SNAKE RIVER’S MOTION TO DISMISS
As stated by its counsel during oral argument, Snake River filed its Motion to Dismiss on two separate grounds: “first, the question of the jurisdiction of the state Commission over wholesale transactions, and secondly, the issue that the actual matters that PacifiCorp is raising are res judicata based on the findings of fact made by the federal courts in the federal proceedings.” Tr. p. 7. Snake River argues PacifiCorp’s petition should be dismissed “because it raises federal issues as to the applicability of the federal antitrust laws to PacifiCorp, and seeks an improper end-run around long standing litigation between [Snake River] and PacifiCorp in the U.S. District Court for Idaho, and in the U.S. Court of Appeals for the Ninth Circuit on appeal therefrom, involving the application of the Federal Antitrust laws to PacifiCorp. . . .” Snake River also contends PacifiCorp’s petition “improperly requests the Commission to consider wholesale wheeling issues over which it lacks jurisdiction under the commerce clause of the U.S. Constitution and the Federal Power Act.” Snake River Motion and Brief, p. 2. Snake River characterizes PacifiCorp’s petition as a “transparent attempt to have the State Commission relitigate the federal case, which it has lost on the merits, based on the full record before the federal courts.” Snake River Motion and Brief, p. 10.
Snake River also argues that PacifiCorp’s petition “involves a Federal issue subject to the jurisdiction of the District Court because PacifiCorp’s petition seeks to adjudicate a Federal issue relating to the applicability of the Federal Antitrust laws to PacifiCorp, an issue within the exclusive jurisdiction of the Federal Courts.” Snake River contends PacifiCorp seeks “a ruling that PacifiCorp is immune from the Federal Antitrust laws, an issue that Congress has legislated, and the U.S. Supreme Court has ruled is within the exclusive jurisdiction of the federal court to decide.” Snake River Motion and Brief, p. 13.
Finally, Snake River notes that PacifiCorp’s petition “relies solely on a new section 61-332D, Idaho Code, enacted effective February 28, 2001.” Snake River nonetheless argues that Idaho Code § 61-334, which was not amended by the legislature, “expressly excludes any Commission jurisdiction over sales [of electricity] for resale.” Snake River Motion and Brief, p. 13. Section 61-334 states that “Nothing contained in this act shall be construed to: . . . (3) Preclude any electric supplier from extending electric service to its own property or facilities or to another electric supplier for resale.” Snake River argues that Section 61-332D “cannot restrict wheeling service of power for resale because Section 61-334(3) precludes such construction.” Snake River Motion and Brief, p. 13.
In its response to Snake River’s Motion to Dismiss, PacifiCorp argues the issue decided by the Ninth Circuit Court is different from the issue presented by PacifiCorp’s petition, and that the law under which PacifiCorp’s petition was filed is different than as existed in the federal court litigation. The doctrine of issue preclusion or collateral estoppel, according to PacifiCorp, therefore does not apply to prevent the Commission from deciding the case.
PacifiCorp also disputes Snake River’s contention that federal antitrust laws are implicated by PacifiCorp’s petition, since “the Commission’s review of PacifiCorp’s petition involves only the application of state law.” PacifiCorp Answer to Motion to Dismiss, p. 8. PacifiCorp points out that Idaho Code § 61-332D “expressly gives the Commission the authority to review denials of service that may constitute retail wheeling and/or sham wholesale transactions.” PacifiCorp Answer to Motion to Dismiss, p. 9. Finally, PacifiCorp responds to Snake River’s argument that only FERC, not the state Commission, can review the nature of the wheeling service requested by Snake River. Noting that FERC cannot order transmission service that would result in retail wheeling or sham wholesale transactions, 16 U.S.C. § 824k(h), PacifiCorp contends “it is disingenuous for [Snake River] to argue that FERC has exclusive jurisdiction over the question of whether that wheeling should be required.” PacifiCorp Answer to Motion to Dismiss, p. 16.
The Office of the Idaho Attorney General also responded to Snake River’s Motion to Dismiss. The Attorney General noted that Idaho Code § 61-332D was enacted in response to the decision of the Ninth Circuit Court, where the court “concluded that the State of Idaho did not adequately supervise the allegedly anti-competitive conduct prescribed by ESSA’s provisions.” Attorney General’s Answer to Motion to Dismiss, p. 2. Quoting the court where it said “Idaho’s situation . . . could be addressed by legislative action providing for supervision,” the Attorney General contends the “Idaho Legislature promptly responded to the Ninth Circuit’s invitation, enacting HB 142,” amending the ESSA. Attorney General’s Answer to Motion to Dismiss, p. 2. According to the Attorney General, “[t]his Section establishes one new way in which the State of Idaho, through the Commission, intends to adequately supervise the policies underlying ESSA.” Attorney General’s Answer to Motion to Dismiss, p. 3. If Snake River were to prevail on its Motion to Dismiss, argues the Attorney General, the Commission would avoid its responsibility to apply Idaho Code § 61-332D and analyze and apply the provisions of the ESSA. “Such a result would be to stymie the State of Idaho’s interest in properly supervising the policies underlying ESSA. This consequence runs counter to the Legislature’s goals and intent in amending ESSA. . . .” Attorney General’s Answer to Motion to Dismiss, pp. 3-4.
COMMISSION DECISION ON MOTION TO DISMISS
There can be little doubt regarding the authority of the Commission to hear a petition filed pursuant to Section 61-332D. That section requires an electric supplier that denies a wheeling request to file a petition with the Commission, and also requires the Commission to “review the electric supplier’s actions for consistency with the purposes and provisions of this act.” A grant of authority to the Commission by the legislature could hardly be more direct.
Snake River’s first ground for dismissal purportedly raises “the question of the jurisdiction of the state commission over wholesale transactions.” Tr. p. 7. Although the Federal Power Act enacted in 1992 authorizes FERC to regulate the terms for access to wholesale transmission services, the Act did not affect “any authority of any State or local government under State law concerning the transmission of electric energy directly to an ultimate consumer.” 16 U.S.C. § 821k(h). While FERC’s authority lies in the wholesale arena, the individual states, and in Idaho through this Commission, retain authority to regulate retail power transactions.
Snake River by its Motion to Dismiss asks the Commission to accept Snake River’s characterization of the nature of the requested wheeling service. Essentially Snake River contends, because its own articles of incorporation state it was organized “for the purpose of buying electric power for resale to its members,” its request for transmission service from PacifiCorp must be a wholesale rather than a retail transaction, and thus outside the Commission’s jurisdiction. If that argument were valid, the grant of authority to the Commission in Section 61-332D would be meaningless. Any electric company could prevent the Commission’s review of a wheeling request merely by asserting it amounts to a wholesale transaction. We believe the legislature was clear in directing the Commission to review the wheeling request presented by a petition filed under Section 61-332D and make its own determination regarding the nature of the requested transaction.
Snake River also claims the determination of the retail or wholesale nature of a wheeling transaction lies exclusively with FERC. Snake River argues that FERC reached that conclusion in City of Palm Springs, 76 FERC ¶ 61, 127. Snake River quotes the Palm Springs decision where FERC said “Congress undoubtedly intended this Commission [FERC] to look into the substance of each transaction, not just the form, to detect subterfuges.” 76 FERC ¶ 61, 127 at pp. 13-14. From that, Snake River contends a review of the nature of a transaction, whether it is retail or wholesale, is not for the states because “the FERC ruled it was a question that FERC itself had sole jurisdiction to decide.” Tr. pp. 38-39. The Palm Springs decision contains no such ruling.
In the Palm Springs case, the municipal electric system asked Southern California Edison Company (Edison) to provide transmission service for new customers Palm Springs desired to serve. Like here, the prospective Palm Springs customers were existing customers of a regulated utility. Palm Springs desired to “expand its system by installing only the meters and related equipment necessary to measure and deliver its electric power and energy, and compete with Edison for retail electric customers inside Palm Springs city limits.” In its decision denying the requested transmission service, FERC cited Section 212(h) of the Federal Power Act, establishing that FERC
is prohibited from requiring retail wheeling; that is, the transmission of electric energy directly to an ultimate consumer. The Commission is also prohibited from requiring what can be called sham wholesale wheeling; that is, transmission of electric energy to an entity for resale to an ultimate consumer in instances in which the substance of the transaction amounts to retail wheeling because wholesale sales to the entity is in fact a subterfuge intended to circumvent the ban on retail wheeling.
City of Palm Springs, 76 FERC ¶ 61, 127 at p. 14.
When asked to review proposed transmission requests, FERC stated it “must ensure that, in a particular fact pattern in an individual case, it does not allow or approve transactions that clearly are nothing more than an indirect sale to an ultimate consumer formulated for the purposes of circumventing the statutory prohibition.” FERC accordingly said it “should be sensitive to proposed transactions which in form meet the technical requirements of a sale for resale but which are, in economic substance, a retail sale to an end-user.” It is in this context that FERC stated “Congress undoubtedly intended [FERC] to look at the substance of each transaction, not just the form, to detect subterfuges.” Thus FERC was making clear its own responsibility to analyze proposed transactions brought to it to detect subterfuge. That is not the same as concluding as a matter of law that FERC exclusively has jurisdiction to analyze the character of proposed transmission transactions in each state.
In fact, the principal issue in Palm Springs is identical to the one presented by PacifiCorp’s petition in this case: is the requested transmission service retail wheeling and thus one not permitted by law? Like FERC, this Commission is directed by applicable law to review the nature of the proposed service to make a determination. Idaho Code § 61-332D(2). The Commission’s role cannot be defeated by a mere allegation that the service is a wholesale service and thus is outside the jurisdiction of the Commission. Instead, the Commission will look at the substance of each transaction, and will not accept without question one party’s characterization of it, to determine whether it is consistent with the purposes and provisions of the ESSA.
The second ground for Snake River’s Motion is related to the first. Snake River asserts “that the actual matters that PacifiCorp is raising . . . here are res judicata based on the findings of fact made by the federal court in the federal proceedings earlier.” Tr. p. 7. Snake River claims PacifiCorp admitted, and the federal courts found, that Snake River is a wholesale supplier of electricity and therefore its request for wheeling service must be for wholesale service, and thus beyond the jurisdiction of the Commission. Snake River again reaches a faulty conclusion.
The admission made by PacifiCorp, and the similar statements in the federal court decisions, are nothing more than recognition of language in Snake River’s articles of incorporation stating its business purpose. It is common for litigants and courts to use such statements as a way to identify parties. Recognizing that Snake River was organized for the purpose of reselling power to its members is not tantamount to ruling that the particular transmission service requested involves a legitimate wholesale service. Snake River’s contention that the courts so ruled is without merit.
Snake River also contends in its Motion that the Commission must dismiss the case because it implicates federal antitrust issues. Snake River does not explain why the Commission should disregard its responsibility under Section 61-332D to “review [PacifiCorp’s] action for consistency with the purposes and provisions of this act.” PacifiCorp’s petition asks the Commission only to conduct the review expressly authorized by Section 61-322D, and that can be accomplished without discussing federal antitrust issues. Should Snake River have claims under federal antitrust laws, it can pursue those in federal court regardless of the Commission’s decision in this case. The Commission need not and will not attempt to decide questions of federal antitrust law.
Nor is Snake River’s argument regarding a conflict between Section 61-332D and Section 61-334 persuasive. Section 61-332D provides that “an electric supplier shall not be required to provide wheeling service” if it would result in retail wheeling, and Section 61-334 states that the ESSA shall not be construed to “preclude any electric supplier from extending electric service to its own property or facilities or to another electric supplier for resale.” By these provisions an electric supplier can legally refuse to wheel power that amounts to retail wheeling, and is not precluded from transmitting power for resale that does not constitute retail wheeling. The discrepancy between the two sections argued by Snake River simply does not exist.
After reviewing all of Snake River’s arguments for dismissal, the Commission has determined there is no legal basis for granting the Motion to Dismiss.

PACIFICORP’S MOTION FOR SUMMARY JUDGMENT
The issues framed by the initial pleadings (PacifiCorp’s Petition and Snake River’s Answer and Motion to Dismiss) and the parties’ arguments appear again in PacifiCorp’s Motion for Summary Judgment and Snake River’s answer. By its motion, PacifiCorp asks “for summary judgment in favor of PacifiCorp and an order declaring that PacifiCorp’s actions in respect to a request by Snake River . . . for certain wheeling service is consistent with the purposes and provisions of ESSA and that PacifiCorp shall not be required to provide a wheeling service that [Snake River] seeks.” PacifiCorp Motion, p. 1. PacifiCorp contends it is undisputed that wheeling power “to meters installed or acquired by Snake River for the purpose of ‘receiving’ and then ‘reselling’ power wheeled by PacifiCorp to those customer locations would constitute retail wheeling and/or a sham wholesale transaction.” PacifiCorp contends it is entitled to judgment as a matter of law pursuant to Idaho Code § 61-332D.
PacifiCorp asserts there is no factual dispute regarding the nature of the wheeling service requested by Snake River. Included as attachments to PacifiCorp’s Motion are representations by Snake River regarding the receipt and delivery points for the power PacifiCorp was asked to wheel. According to the provided attachments, Snake River represented the “outside source of power would be delivered at so-called receipt points where Utah Power and PacifiCorp are interconnected with other outside systems.” Delivery points of the wheeled power for customers would be “the existing delivery points on [PacifiCorp’s] system to each of the members of [Snake River].” If those facts are undisputed, and if such an arrangement constitutes retail wheeling or a sham wholesale transaction, PacifiCorp would be entitled to judgment as a matter of law under Section 61-332D.
In its response to Pacificorp’s Motion, however, Snake River contends the material facts regarding the wheeling service it requests are in dispute. In an affidavit filed with its response, the president of Snake River avers that he “wrote to PacifiCorp requesting that it provide transmission service for our supply of wholesale power for [Snake River] from Idaho Power which would deliver that power at receipt points on Pacificorp’s transmission system to be wheeled to [Snake River] at facilities it would own at the delivery points and there resell it over the facilities owned by its members or to be constructed by [Snake River] to its members.” The affidavit also states that Snake River has “consistently sought to obtain wheeling by [PacifiCorp] to delivery points where [Snake River] would be able to acquire the power and [Snake River] would, thereafter own and construct any necessary distribution facilities that PacifiCorp might refuse to sell.” Finally, the president of Snake River states that the wheeling service it requests “is indistinguishable from PacifiCorp’s furnishing such wholesale wheeling for resale service to a number of other cooperatives and municipal systems in its service territory.”
Snake River also again contends the Commission has no jurisdiction to hear PacifiCorp’s Motion because the proposed power sale is a wholesale transaction over which the FERC, not the Commission, has jurisdiction. Snake River repeats its claim that PacifiCorp previously admitted Snake River was seeking a wholesale power purchase arrangement with PacifiCorp.
Finally, Snake River also argues that granting PacifiCorp’s Motion for Summary Judgment would violate the due process clause of the Fourteenth Amendment of the U.S. Constitution by denying Snake River “notice and opportunity for a hearing.” Snake River’s Opposition to PacifiCorp’s Motion for Summary Judgment, p. 5.
COMMISSION DECISION ON MOTION FOR SUMMARY JUDGMENT
The standard for a summary judgment is contained in Idaho Rule of Civil Procedure 56(c), which provides that summary judgment should be granted if “the pleadings, depositions, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Upon review of a motion for summary judgment, “[a]ll disputed facts are to be construed liberally in favor of the non-moving party, and all reasonable inferences that can be drawn from the record are to be drawn in favor of the non-moving party.” Frazier v. J.R. Simplot Company, ___ Idaho ___, 29 P.3d 936, 938 (2001).
The responsibility of the Commission on a petition filed under Section 61-332D is to “review the electric supplier’s action for consistency with the purposes and provisions of this act, and issue an order in accordance with its findings, ordering either that the wheeling service shall, or shall not, be required.” In this case the Commission is asked to review PacifiCorp’s refusal to wheel power to Snake River and assess whether such refusal is consistent with the purposes and provisions of the ESSA. The Act states that an electric supplier shall not be required to wheel service that results in retail wheeling or a sham wholesale transaction. Thus if wheeling power by PacifiCorp to Snake River’s members would amount to such a transaction, PacifiCorp, according to Section 61-332D, “shall not be required to provide” it.
Although the ESSA does not define “retail wheeling” or “sham wholesale transaction,” the parties and the Commission accept the definition provided by the Federal Power Act and FERC. Retail wheeling is “the transmission of electric energy directly to an ultimate consumer,” and a sham wholesale transaction is the “transmission of electric energy to an entity for resale to an ultimate consumer in instances in which the substance of the transaction amounts to retail wheeling because wholesale sales to the entity is in fact a subterfuge intended to circumvent the ban on retail wheeling.” 16 U.S.C. § 824k(h); City of Palm Springs, 76 FERC ¶ 61, 127 at p. 14.
Construing all disputed facts in the record liberally in favor of Snake River, and drawing all reasonable inferences therefrom in favor of Snake River, the Commission must deny the Motion for Summary Judgment. According to the affidavit provided by Snake River’s president, Snake River seeks transmission of power to “facilities it would own at the delivery points and there resell it over the facilities owned by its members or to be constructed by [Snake River] to its members.” Snake River’s president also states in his sworn affidavit that its wheeling request “is indistinguishable from PacifiCorp’s furnishing such wholesale wheeling for resale service to a number of other cooperatives and municipal systems in its service territory.” Thus the factual record regarding the distribution facilities owned by Snake River, interpreted in favor of Snake River, is disputed. Because ownership by Snake River of distribution facilities involves a material fact for resolution by the Commission, and the record as currently constituted does not permit an undisputed finding that Snake River owns no facilities, Snake River is entitled to a hearing on PacifiCorp’s petition. If Snake River owns distribution facilities with a point of delivery to which PacifiCorp can wheel power, then the wheeling service it requests may not constitute retail wheeling.
To guide the parties’ preparation for hearing and to avoid delay, the Commission provides its understanding of the issues presented by ESSA and PacifiCorp’s petition. First, to avoid the ban on retail wheeling, Snake River must own distribution facilities to which PacifiCorp can deliver power and over which Snake River can distribute power to the ultimate consumer. The Commission agrees with FERC’s conclusion in City of Palm Springs that “[t]he interposition of unnecessary, duplicate meters does not . . . constitute ownership or control of transmission or distribution facilities that would be utilized to deliver electric energy to the electric consumer . . .” to avoid the ban on retail wheeling. City of Palm Springs, FERC ¶ 61, 127 at p. 14.
Second, customer payments made pursuant to line extension tariffs for distribution facilities do not transfer ownership of any company facilities to the customer. Third, a regulated utility is not required to sell its facilities to a proposed competitor electric provider or anyone else. Finally, the parties should be prepared to address the effect of Idaho Code § 61-332B on Snake River’s plan to serve customers currently served by PacifiCorp. Section 61-332B provides that “[n]o electric supplier shall supply or furnish electric service to any electric entrance that is then or had at any time previously been lawfully connected for electric service to facilities of another electric supplier except as provided in this act.”
The Commission will convene a prehearing conference for the purposes set forth in Commission Rule of Procedure 211, IDAPA 31.01.01.211. In particular the Commission is interested in formulating or simplifying the issues, obtaining stipulations as to undisputed facts to avoid unnecessary proof, and scheduling discovery and a hearing. The prehearing conference will be conducted by teleconference for the convenience of the parties, and will convene Tuesday, November 20, 2001 at 1:30 p.m.
O R D E R
IT IS HEREBY ORDERED that Snake River’s Motion to Dismiss and PacifiCorp’s Motion for Summary Judgment are denied.
NOTICE OF PREHEARING CONFERENCE
The Commission will convene a prehearing conference on TUESDAY, NOVEMBER 20, 2001 AT 1:30 P.M. IN THE COMMISSION HEARING ROOM, BOISE, IDAHO for the purposes set forth in Commission Rule of Procedure 211, IDAPA 31.01.01.211.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in this matter will be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act (ADA). In order to participate in or to understand testimony and argument at a public hearing, persons needing help of a sign language interpreter or other assistance may ask the Commission to provide a sign language interpreter or other assistance as required under the ADA. The request for assistance must be received at least five (5) working days before the hearing by contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (TELEPHONE)
[phone] (FAX)

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of October 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

Vld/O:PACE016_ws4
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 28888 1

Office of the Secretary
Service Date
October 30, 2001