20170207final_order_no_33714.pdf

Office of the Secretary
Service Date
February 7, 2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
TO APPROVE THE ASSET PURCHASE ) CASE NO. PAC-E-16-16
AGREEMENT BETWEEN ROCKY )
MOUNTAIN POWER AND THE CITY OF ) ORDER NO. 33714
_I_D_A_H_O_F_A_L_L_S __________ )
On December 21, 2016, Rocky Mountain Power ("Company") filed an Application
requesting authority to sell/transfer certain electric facilities to the city of Idaho Falls, Idaho
("City"), to supply electric service to 6786 South 5th West, in the City's boundaries. The
Application falls under the Electric Supplier Stabilization Act (ESSA), Idaho Code §§ 61-332 et
seq. The Commission issued a Notice of Application and Notice of Modified Procedure. Order
No. 33684. Staff timely filed comments. Rocky Mountain did not file a reply. We now approve
the Application.
BACKGROUND
In August 2005, the Company and the City entered into an allocation agreement
("2005 Agreement") "to reduce duplication of service and promote stability of their respective
service areas." Application at 2; Exhibit 1. Although the Company and the City terminated the
2005 Agreement in 2015, they "have agreed to utilize the terms of [the 2005 Agreement] to
govern this asset exchange." Application at 2. Among other terms, the 2005 Agreement allowed
for the transfer of a customer's electric service from the Company to the City upon the
customer's written request for such transfer, and upon the City's agreement to pay the Company
"just compensation for lost revenues and [for] the facilities utilized to serve that customer." Id.
at 3. Under the 2005 Agreement, "just compensation for lost revenues" meant "an amount equal
to 167 percent of the total of the respective customer's electric bills from the prior twelve month
period." Id. In the event of such transfer, the 2005 Agreement provided that the City "would
purchase the poles, wires, cross arms, insulators, guys and other facilities no longer needed or
required by [the Company] to service that customer." Id.
APPLICATION
The Company and City have entered into an Asset Purchase Agreement that comports
with their 2005 Agreement. Id. Consistent with terms of the 2005 Agreement, the owner and
developer of the property at 6786 South 5th West in Idaho Falls (i.e., the customer) made a
written request to transfer electric service from the Company to the City. Id. In the Asset
ORDER NO. 33714 1
Purchase Agreement, the Company and City agreed to transfer service, and the City agreed to
pay 167 percent of the previous customer's electric bills for the prior twelve month period, and
to purchase "one transformer, three poles and approximately 1,850 feet of conductor from the
Company." Id. Further, the City agreed to pay the Company for legal and transaction costs. Id.
The agreed purchase price is $4,850.67. Exhibit D. In the Application, the Company and City
jointly requested the Commission's approval of their service area exemption and Asset Purchase
Agreement. Application at 3.
STAFF COMMENTS
Upon its review, Staff believes that the $4,850.67 purchase price is "just, fair, and
reasonable, and that the transaction is consistent with the purposes of the ESSA." Comments at
3. Staff therefore recommended that the Commission approve the Rocky Mountain's Asset
Purchase Agreement with Idaho Falls.
COMMISSION FINDINGS
Under the ESSA, the Company and the City are electric suppliers, and the
Commission has jurisdiction to determine whether the requested service area exemption and
Asset Purchase Agreement are appropriate. Idaho Code §§ 61-332A(4) ('"Electric supplier'
means any public utility ... or municipality supplying or intending to supply electric service to a
consumer."); 61-334B (re: Commission supervision and authority).
The ESSA was passed to: (1) discourage duplication of facilities; (2) prohibit
"pirating" of consumers; (3) stabilize electric suppliers' service territories and consumers; and
(4) promote harmony between electric suppliers. Idaho Code § 61-332(2). As such, the ESSA
prohibits an electric supplier from furnishing electric service to a consumer that is or has been
"lawfully connected for electric service to facilities of another electric supplier except as
provided in this act." Idaho Code§ 61-332B. However, the ESSA provides an exemption to this
prohibition: that electric suppliers may contract to allocate "territories, consumers, and future
consumers . . . and designat[ e] which territories and consumers are to be served by which
contracting electric supplier." Idaho Code § 61-333(1). These service allocation contracts, also
called service area exemption agreements, must be approved by the Commission "upon finding
that the allocation is in conformance with the purposes of the ESSA." Id.; Order No. 32646.
We previously approved Rocky Mountain's service allocation agreement (2005
Agreement) with Idaho Falls. Order No. 29895. Given the record before us, we now find that
ORDER NO. 33714 2
the service area exemption for the property located at 6786 South 5th West in Idaho Falls is
consistent with the 2005 Agreement, and with the purposes of the ESSA. We thus approve the
transfer of electric service for that location from Rocky Mountain to Idaho Falls. We further find
that the proposed Asset Purchase Agreement conforms to the 2005 Agreement and the ESSA,
and that the purchase price of $4,850.67 is just, fair, and reasonable. We thus approve the Asset
Purchase Agreement between Rocky Mountain and Idaho Falls.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain's Application is approved as set
forth above.
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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of February 2017.
ATTEST:
Diane M. Hanian
Commission Secretary
O:P AC-E-l 6-l 6 _ djh2
ORDER NO. 33714
ERIC ANDERSON, COMMISSIONER
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