20090506final_order_no_30753.pdf

Office of the Secretary
Service Date
May 6, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
MARIAN MATHEWSON
vs.
CASE NO. P AC-08-COMPLAINANT
ROCKY MOUNTAIN POWER
ORDER NO. 30753
RESPONDENT.
On November 13 , 2008 , the Commission issued a summons to Rocky Mountain
Power (Rocky Mountain, Company) in response to a formal complaint filed by Marian
Mathewson against the Company for its policies regarding monthly facilities charges for remote
customers. On December 3 , 2008, Rocky Mountain filed its answer. The Company requested
dismissal of the complaint for failure to state a claim.
Commission Staff filed comments on January 23, 2009, confirming that the
Company s estimate for Ms. Mathewson was consistent with its approved tariffs. As a result
Staff recommended that the Commission dismiss Ms. Mathewson s complaint. A workshop was
convened on February 25, 2009, in order to gain insight into the Company s reasoning for a
monthly facilities charge. For reasons set out in greater detail below, the Commission grants
Rocky Mountain s Motion to Dismiss.
MS. MATHEWSON'S COMPLAINT
Ms. Mathewson s home is approximately eight-tenths of a mile from Rocky
Mountain s nearest distribution line. After contacting the Company to inquire about the cost of
obtaining electric service, Ms. Mathewson was provided with an estimate of $19 867 for the
Company to install a buried line extension approximately one mile in length. Ms. Mathewson
was also informed that, in addition to her monthly electric usage, she would be assessed a
monthly facilities charge" of approximately $180.
1 In order to account for revenue, 20% of the remote customer s monthly usage charge is credited against the
monthly facilities charge. As a result, Ms. Mathewson s monthly facilities charge would have amounted to
something slightly less than $180.
ORDER NO. 30753
Ms. Mathewson does not object to paying the costs associated with constructing
facilities to serve her remote location nor does she object to paying for her monthly energy
consumption. She does, however, take exception to the imposition of a monthly facilities charge
billed on top of her monthly energy usage. She points out that other public utilities do not assess
a similar charge. Ms. Mathewson contends that the monthly facilities charge is unfair and
punitive to remote customers.
ROCKY MOUNTAIN POWER'S RESPONSE
Rocky Mountain filed an answer to Ms. Mathewson s formal complaint on December
, 2008. The Company explained that the costs and charges quoted to Ms. Mathewson are
consistent with its approved tariffs regarding billing for customers more than one-half mile from
the Company s existing distribution facilities. The Company clarified that the monthly facilities
charge "is an annualized charge on the life costs of an extension that covers taxes and
replacement as well as maintenance." Answer, p. 2.
In case the revenue didn t cover the ongoing costs associated with that line
we would have this facilities charge that would pick up the deficit, so the
whole point was to make it revenue neutral so that there would be neither an
upward pressure on the rates, but at the same time be an allowance for the
revenue that the customer brought on, so that was the intent behind the design.
Workshop Tr. p. 3. The Company further explained that, should an additional customer be
placed on Ms. Mathewson s line, the monthly facilities charge would be removed.2 Workshop
Tr. p. 18. Because its quotes to Ms. Mathewson were consistent with approved tariffs, Rocky
Mountain requested that the complaint be dismissed.
There are currently three Rocky Mountain residential customers in Idaho who pay a
monthly facilities charge. Rocky Mountain expressed that it is willing and able to provide Ms.
Mathewson with a line extension for electric service consistent with its approved tariffs upon her
request.
DISCUSSION AND FINDINGS
Pursuant to Idaho Code ~~ 61-501 and 61-612 the Commission has jurisdiction to
resolve the complaint brought against Rocky Mountain by Ms. Mathewson. The Commission
finds that a hearing is not required to consider the issues presented in Ms. Mathewson
2 The removal of a monthly facilities charge is a policy that the Company espouses, but it is not written into the
language of the tariff.
ORDER NO. 30753
complaint. Therefore, the Commission issues its decision based on the written record submitted
including the materials submitted prior to this matter becoming a formal complaint. See IDAP A
31.01.01.201.
The facts are not disputed. Ms. Mathewson requested an estimate from Rocky
Mountain regarding the cost of a line extension to provide electricity to her home. Because Ms.
Mathewson is more than one-half mile from the nearest distribution line, the Company informed
her that, in addition to the costs associated with installing the line extension, her monthly electric
bill would include a facilities charge. The imposition of a monthly facilities charge for
customers who are more than one-half mile from the nearest distribution line is consistent with
the Company s Commission-approved tariffs.
Ms. Mathewson asserts that the Company s monthly facilities charge is unfair and
punitive. While the Commission understands Ms. Mathewson s frustration, after reviewing the
tariff language and the Company s rationale we cannot find that Rocky Mountain s monthly
facilities charge is patently unreasonable.
The facilities charge is meant to cover ongoing costs and future replacement of the
line extension. Contrary to what Ms. Mathewson believes, the charge is meant to be revenue
neutral i. e.the Company does not make additional revenue by assessing a monthly facilities
charge. It is true that other Idaho utilities do not charge a similar fee to their remote residential
customers. Instead, for other utilities the added costs associated with a remote customer are
borne by the entire body of ratepayers. Rocky Mountain s decision to utilize a monthly facilities
charge for a remotely located customer as opposed to imposing that cost on the company
ratepayers as a whole is reasonable and consistent with its approved tariffs. Idaho Code ~ 61-
502.
While we find that the imposition of a monthly facilities charge is reasonable, a
question regarding the Company s one-half mile distinction was raised during the February
workshop. A customer receiving service beyond 100 feet up to one-half mile must pay for
installation of the line extension, but pays no monthly facilities charge. A customer receiving
service in excess of one-half mile must pay for the installation of the line extension and a
monthly facilities charge that is calculated, in part, based on the entire length of the line
extension - not merely the length in excess of one-half mile. The question arises, then, whether
it is more equitable to include in the facilities charge calculation only the length of the line
ORDER NO. 30753
extension in excess of one-half mile. The Commission answers this question in the affirmative.
Therefore, the Commission directs the Company to modify its tariff(s) to be consistent with a
facilities charge calculation that incorporates only the line extension length that exceeds one-half
mile.
Also, during the course of these proceedings it came to the Commission s attention
that the Company s policy of removing a monthly facilities charge is not written into its tariff.
We find the Company s policy of removing a monthly facilities charge once another customer
builds on the distribution line to be reasonable. Therefore, we direct Rocky Mountain to include
such language in the appropriate tariff.
The Company actions were consistent with its Commission-approved tariff.
Moreover, Ms. Mathewson s original quote has long since expired. An updated quote, should
Ms. Mathewson still desire a line extension, would reflect a reduced monthly facilities charge
based on the Commission s directive for the Company to modify its method of calculation.
Therefore, the Commission grants Rocky Mountain s Motion to Dismiss.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power s Motion to Dismiss
granted.
denied.
Consequently, Marian Mathewson s complaint against Rocky Mountain Power is
IT IS FURTHER ORDERED that Rocky Mountain Power modify its tariff(s) to be
consistent with a facilities charge calculation that incorporates only the line extension length that
exceeds one-half mile as more fully explained above.
IT IS FURTHER ORDERED that Rocky Mountain Power include language in its
tariff consistent with its policy of removing a facilities charge when an additional customer takes
service from the previously remote customer s distribution line.
IT IS FURTHER ORDERED that Rocky Mountain Power file a conforming tariff
incorporating these changes no later than thirty (30) days from the service date of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30753
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this fI.
day of May 2009.
D. KIfMPTON, P DENT
il~
MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, 0
ATTEST:
~~.
J a D. Jewell
C mmission Secretary
O:PAC-08-09 ks
ORDER NO. 30753