20051006Comments.pdf

DONOY AN E. WALKER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5921
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, ID 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF IDAHO FALLS POWER
AND P ACIFICORP FOR APPROVAL OF AN
ELECTRIC CONSUMER ALLOCATION
AGREEMENT.COMMENTS OF THE
COMMISSION STAFF
CASE NO. PAC-O5-
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
record, Donovan E. Walker, Deputy Attorney General, in response to Order No. 29869, the
Notice of Amended Application and Second Notice of Modified Procedure issued on September
2005 , respectfully submits the following comments.
BACKGROUND
On June 20, 2005 , Idaho Falls Power and PacifiCorp dba Utah Power & Light Company
(PacifiCorp) filed a Joint Application seeking the Commission s approval of an electric
consumer allocation agreement between the parties (Agreement) dated May 27, 2005. The
Agreement was submitted for the Commission s review pursuant to the provisions of the Electric
Supplier Stabilization Act (ESSA). Idaho Code ~ 61-332 et seq. During its review Staff
determined that the Agreement could lead to duplication of facilities which is contrary to the
STAFF COMMENTS OCTOBER 6, 2005
purposes of the ESSA. Staff discussed its concerns with Idaho Falls Power and PacifiCorp and
both parties agreed to further discuss changes to the Agreement to alleviate Staff s concerns.
On July 29 , 2005 Staff filed a motion to extend the comment period for an additional 14
days to facilitate these additional discussions. The Commission granted Staff s motion at its
August 1 , 2005 decision meeting. Staff hoped that the discussions would lead to an amended or
new agreement. At the end of the extended comment period, no additional filing had been made
by Idaho Falls Power or PacifiCorp. Therefore, on August 19, 2005 , Staff filed comments with
the Commission that did not support approval of the Agreement as originally submitted.
On September 6, 2005, Idaho Falls Power and PacifiCorp filed an Amended Joint
Application seeking the Commission s approval of a revised electric consumer allocation
agreement between the parties (Revised Agreement) dated August 26 2005. The Amended Joint
Application incorporates all of the representations and assertions made in the original Joint
Application filed on June 20, 2005, and noticed for public comment on July 15 2005. See Order
No. 29822.
On September 15, 2005 , the Commission issued Order No. 29869 Notice of Amended
Application and Second Notice of Modified Procedure, which commenced an additional 21 day
comment period. These comments are filed in response to that Notice.
THE REVISED AGREEMENT
Idaho Falls Power is the electric department of the City of Idaho Falls (City), a
municipal corporation duly organized under the laws of the State of Idaho. Idaho Falls Power
serves over 22 000 electric consumers, primarily within the municipal boundaries of the City.
However, Idaho Falls Power also provides electric service to some consumers outside the
municipal boundaries of the City. PacifiCorp is a public utility providing electric service to over
000 consumers in eastern Idaho, including the area immediately surrounding Idaho Falls.
However, PacifiCorp provides electric service to some consumers within the municipal
boundaries of the City.
To divide and identify servIce responsibility, Idaho Falls Power and PacifiCorp
propose to define their service areas and provide for circumstances under which an existing
customer may seek to change suppliers. Under the Revised Agreement, Idaho Falls Power will
continue to serve existing customers outside the City and PacifiCorp will continue to serve
existing customers within the City. However, PacifiCorp will not provide electric serVice to a
STAFF COMMENTS OCTOBER 6 , 2005
new service entrance within the municipal boundaries of the City, and the Idaho Falls Power will
not provide electric service to a new service entrance outside the City s municipal boundaries.
The Revised Agreement also addresses potential requests from existing customers
desiring to change electric service providers. Specifically, in the event that a PacifiCorp
customer living within the City s boundaries desires Idaho Falls Power service, Idaho Falls
Power may provide electric service to such a customer provided that the customer makes a
written request to the City for electric service, and the City pays PacifiCorp just compensation as
determined under the Revised Agreement. Similarly, an Idaho Falls Power customer living
outside the City limits may change to PacifiCorp service by making application to PacifiCorp
and upon PacifiCorp paying the City just compensation. Pursuant to the Agreement, in order to
provide just compensation, the acquiring utility shall: (1) pay the other utility an amount equal
to 167% of the exchanging customer s total electric bills from the previous 12 months; and (2)
purchase all poles, wires, cross arms, insulators, guys, and other facilities no longer needed by
the other utility. See Idaho Code ~ 61-333B. If this standard for just compensation cannot be
reasonably applied, the parties agree to negotiate in good faith to determine other just
compensation.
ST AFF REVIEW
The ESSA allows electric suppliers to contract with one another for the purpose of
allocating territories, consumers, and future consumers; however, all such contracts must be filed
with the Commission for approval. Idaho Code ~ 61-333. The Commission shall approve such
contracts only upon finding that the allocation or transfer is consistent with the purposes of the
ESSA. The purposes of the ESSA are: (1) promote harmony among and between electric
suppliers; (2) prohibit the "pirating" of consumers; (3) discourage the duplication of electric
facilities; (4) actively supervise the conduct of electric suppliers; and (5) stabilize the territories
and consumers served with electricity by such electric suppliers. Idaho Code ~ 61-332(2)
The ESSA also provides for the extension of a municipality s electric services to
annexed areas that are served by a public utility. Idaho Code ~ 61-333B. The municipality may
extend such service upon payment of just compensation to the public utility. Id. Idaho Code
61-333B states
, "
In the event the annexing municipality has been furnishing electric service to its
residents at the time of such annexation ... nothing in this chapter shall prevent such
municipality from extending its service to the annexed or incorporated area, upon the payment of
STAFF COMMENTS OCTOBER 6, 2005
just compensation. .. to such public utility. . ." Just compensation is to be paid for "any property,
real or personal, including damages to the remainder of the system, if any, of such
...
public
utility, used in distribution, transmission or supply of electrical energy to such area prior to
annexation.Id.
At Staff s request, Section 6 of the original Agreement was changed. The original
Agreement required PacifiCorp customers annexed into the city to petition the city if they
wanted to receive service from Idaho Falls Power. Staff was concerned that this process
increased the probability of duplicate electric distribution facilities. Some customers may have
petitioned the City for the change in service while others may not have. Section 6 in the Revised
Agreement requires Idaho Falls Power to hook up all customers in an annexed area if it hooks up
any PacifiCorp customer in the annexed area. Staff believes that this requirement reduces the
likelihood of duplicate distribution facilities.
Staff believes that the Revised Agreement promotes harmony between the City
and PacifiCorp and prohibits the "pirating" of consumers. Staff also believes that the
Commission s review of this contract demonstrates active supervision. The Revised Agreement
also minimizes the duplication of facilities while allowing the City of Idaho Falls to grow and
provide electric service to city residents. The Revised Agreement also defines service territories
and stabilizes them to the extent possible around a growing city that may under ~ 61-333B of the
ESSA, extend electric service to its residents upon payment of just compensation to the serving
public utility. Staff believes that the Amended agreement conforms to ~ 61-333B.
Staff has reviewed the just compensation provisions of the Revised Agreement and
believes them to be adequate to cover any PacifiCorp stranded investment or other damages or
costs that may foreseeably be associated with the loss of PacifiCorp customers to Idaho Falls
Power.
Pursuant to the ESSA, the Commission has authority to approve or reject a contract
between a municipality and a public utility. Idaho Code ~ 61-333. However, the Commission
has jurisdiction only over the public utility in such a proceeding. Id.
STAFF RECOMMENDATION
Staff believes that the Revised Agreement is consistent with the purposes of the ESSA.
The agreement incorporates the compromises that are necessary and foreseen by the ESSA at the
boundary between a public utility and a growing city supplying electric service to its residents.
STAFF COMMENTS OCTOBER 6, 2005
The agreement promotes order, fairness and harmony in the growth area near the boundaries of
the City and conforms to Idaho Code ~ 61-333B. Staff recommends that the Commission
approve the Revised Agreement.
Respectfully submitted this btIA..day of October 2005.
van E. Walker
Deputy Attorney General
Technical Staff: Keith Hessing
i :umisc/comments/paceO5. 7 dwkh
ST AFF COMMENTS OCTOBER 6, 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 6TH DAY OF OCTOBER 2005
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-05-, BY MAILING A COpy THEREOF POSTAGE PREPAID
TO THE FOLLOWING:
PETER J. RICHARDSON
RICHARDSON & O'LEARY PLLC
515 N 27TH ST
BOISE ID 83702
LISA NORDSTROM
OFFICE OF THE GENERAL COUNSEL
ACIFICORP
825 NE MUL TNOMAH SUITE 1800
PORTLAND OR 97232
DATA REQUEST RESPONSE CENTER
ACIFICORP
825 NE MUL TNOMAH SUITE 800
PORTLAND OR 97232
MAILED TO datarequest~pacificorp.com
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SECRETARY
CERTIFICATE OF SERVICE