20160324final_order_no_33487.pdf

Office of the Secretary
Service Date
March 24,2016
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PACIFICORP DBA )
ROCKY MOUNTAIN POWER’S )CASE NO.PAC-E-15-15
APPLICATION TO APPROVE ASSET )
PURCHASE AGREEMENT BETWEEN )
ROCKY MOUNTAIN POWER AND THE )ORDER NO.33487
CITY OF IDAHO FALLS.)
On December 8,2015,PacifiCorp dba Rocky Mountain Power filed an Application
requesting approval of an agreement to transfer to the City of Idaho Falls one customer,the
accompanying service territory and associated electric facilities.With the proposed agreement,
Rocky Mountain and Idaho Falls (“the Parties”)propose to transfer the Fielding cemetery,a city-
owned property,and the associated electric facilities from Rocky Mountain to the City.The
Application falls under the Electric Supplier Stabilization Act (ESSA),Idaho Code §6 1-332 et
seq.The Parties assert that the terms of the proposed Agreement conform with the terms of a
2005 Agreement between the Parties relating to ESSA transactions,which was previously
approved by the Commission.Both Rocky Mountain and Idaho Falls are “electric suppliers”
under the ESSA.Idaho Code §6l-332A (“Electric supplier means any public utility,
cooperative,or municipality supplying or intending to supply electric service to a consumer.”).
On January 8,2016,the Commission issued a Notice of Application and Notice of
Modified Procedure setting a January 29,2016,deadline for interested persons to file comments,
and an February 5,2016,reply deadline.See Order No.33446.The only public commenter
supported the Application.Commission Staff also recommended that the Commission approve
the proposed agreement.
As set out below,we find that the proposed Agreement is consistent with the
provisions of the ESSA,and we approve the proposed agreement to transfer the customer,
territory,and electric facilities.
BACKGROUND
A.The ESSA
Generally,the purposes of the ESSA are to:(1)promote harmony between electric
suppliers;(2)prohibit the “pirating”of consumers;(3)discourage duplication of electric
ORDER NO.33487
facilities;(4)actively supervise the conduct of electric suppliers;and (5)stabilize service
territories and consumers.Idaho Code §61-332.
The ESSA generally prohibits an electric supplier from serving another electric
supplier’s existing or former customers.Idaho Code §61-332B.As an exception to this general
rule,the ESSA allows electric suppliers to contract for the purpose of “allocating territories,
consumers,and future consumers ...and designating which territories and consumers are to be
served by which contracting electric supplier.”Idaho Code §61-333.Electric suppliers may
also contract for the sale or exchange of “equipment or facilities.”Id.Such contracts are,
however,subject to Commission review and approval.Id.Specifically,the Commission must
approve the contract if,after notice and opportunity for hearing,the Commission finds that the
allocation or transfer conforms to the purposes of the ESSA.See Idaho Code §6 1-333(1)and
61-334B(i).’
B.The Parties’2005 Agreement
Prior to this Application,in August 2005,the Parties entered into an agreement
entitled as “Idaho Falls Allocation Agreement”(“the 2005 Agreement”).The 2005 Agreement’s
stated purpose was “to reduce duplication of service and promote stability of their respective
service areas.”Application at 2,Exh.1.The Commission approved the 2005 Agreement
pursuant to the provisions of the ESSA.Order No.29895.It specifies,among other things,“that
the Company would not provide electric service to any new customers within the City’s
boundaries and the City would not provide electric service to any new customers outside of its
municipal boundaries.”Id.
The 2005 Agreement prescribes the procedure for the transfer of customer services
between the Parties.The customer being served must provide a written request to transfer
service,the existing electric suppliers must agree to the transfer,and the new electric supplier
must agree to pay for lost revenues (just compensation)and any facilities utilized by the other
party to serve that customer.2 Application,2005 Agreement at §5.The 2005 Agreement further
The ESSA further addresses:the allocation of territories,consumers and future consumers,and equipment and
facilities within the subject territories (Section 61-333);service areas subsequently annexed by a municipality
(Sections 6l-333A-333B);and prohibitions on a utility from serving customers within the boundaries of a
municipality where the municipality is an electric supplier (Section 6l-333C).
2 The 2005 Agreement provides that if the City elects to serve any customer within [an]annexed area [previously
served by Rocky Mountain],the City shall provide electric service to all customers within the annexed area,and
ORDER NO.33487 2
quantifies just compensation as 167%of the prior past 12 months of the customer’s billing.Id.
at7(a).
THE PROPOSED AGREEMENT
In its Application,Rocky Mountain explains that the Parties have agreed to the
transfer of the service area of one customer (Fielding cemetery)and certain assets (poles,wires,
cross arms,insulators,guys and other facilities)from the Company to the City.The Parties’
proposed Agreement is included in the Application as Exhibit 2.The Parties assert that the
proposed Agreement comports with the terms of the 2005 Agreement and by implication,the
provisions and purposes of the ESSA.3
The proposed Agreement states that,in exchange for the service area and certain
assets,Idaho Falls has agreed to pay Rocky Mountain 167%of the customer’s previous 12
months electric bills (for lost revenue),the cost of the transferred assets (adjusted for age and
serviceability)and associated legal and transaction costs.Id.The agreed-upon total purchase
price is $49,321.61.Exh.D.
COMMENTS
One brief public comment was filed in this case supporting the proposed transaction.
Commission Staff filed the only other comment in this case.Staff’s comments describe that it
reviewed the proposed transaction for compliance with the (now terminated)2005 Agreement,
and for conformance to the requirements of the ESSA.Staff reported that it reviewed the
Application and spoke with representatives from Rocky Mountain and the City of Idaho Falls.
Staff observed that the sole customer and entire territory at issue is the City itself.
Staff opined that the Agreement furthers the ESSA’s purpose by enabling Idaho Falls to serve its
own territory,avoids potential territorial disputes,and avoids needless duplication of facilities
and service,and potential stranded investment.Staff further observed that the Application
conforms to the 2005 Agreement that the Commission previously approved,including a
previously-approved compensation formula.Accordingly,Staff recommended the Commission:
(1)find that the Agreement conforms to the ESSA’s purposes;and (2)grant the Application and
approve the Agreement.
shall prior to [providing]such service,make payment to [Rocky Mountain]ofjust compensation in accordance with
Section 7 [of the 2005 Agreement].”Application,Exh.I at §6.
The Parties acknowledge that the 2005 Agreement was terminated by the City in 2015.See Staff Comment,n.2.
ORDER NO.33487 3
DISCUSSION AND FINDINGS
The Idaho Public Utilities Commission has jurisdiction in this matter to “review and
approve or reject contracts between ...municipalities and public utilities..”Idaho Code §
61-333(1).The Commission shall “approve such contracts only upon finding that the allocation
of territories or consumers is in conformance with the provisions and purposes of [the ESSAI.”
Id.As set out in Idaho Code §6 1-332(2),the purposes of the ESSA are to:(1)promote harmony
between electric suppliers;(2)prohibit the “pirating”of consumers;(3)discourage duplication of
electric facilities;(4)actively supervise the conduct of electric suppliers;and (5)stabilize service
territories and consumers.The ESSA further contains a requirement of “just compensation”in
such transactions.Idaho Code §61-333B.
The Commission has reviewed the record in this case,including the Application,the
proposed Agreement,and the defunct 2005 Agreement.The anti-pirating provision of the ESSA
(Idaho Code §61-332B)prohibits the City from supplying electricity to a customer previously
served by Rocky Mountain “except as provided in [the ESSA],”Id.However,Section 6 1-333
allows the Parties to exchange customers,territory,and equipment,subject to Commission
supervision and approval of such transactions.We find that the proposed Agreement conforms
to the terms of the 2005 Agreement,which the Commission has previously approved as meeting
the requirements of the ESSA.Order No.29895.Additionally,because the City of Idaho Falls
is the customer making the request in order to serve its own cemetery,the sale of assets is
consistent with the public interest.We further find that the agreed upon purchase price is just
and reasonable compensation and in compliance with Idaho Code §61 -333B.Thus,we find that
the proposed Agreement is in conformance with the provisions of the ESSA.Accordingly,we
approve the proposed Agreement.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power’s Application to approve
the proposed purchase Agreement to transfer from Rocky Mountain to the City of Idaho Falls,
one customer (Fielding cemetery),the accompanying service territory,and associated electric
facilities,in exchange for $49,321.61 is approved.
ORDER NO.33487 4
IT IS FURTHER ORDERED that the exchange shall be effective upon execution by
both parties.
THIS IS A FINAL ORDER.Any person interested in ibis 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 §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of March 2016.
PAUL KJ LANDt,PRESIDENT
KR INE RAPER,COMMISSIONER
CERIC ANDERSON,COMMISSIONER
ATTEST:
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Jin D.Jewell(/
COmmission Scretary
O:PAC-E-I 5-1 5bk2
ORDER NO.33487