20170126Comments.pdf

DAPHNE HUANG
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 8370
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
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2Dl7 Jf!26 PM 1:52
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION TO )
APPROVE THE ASSET PURCHASE )
AGREEMENT BETWEEN ROCKY MOUNTAIN )
POWER AND THE CITY OF IDAHO FALLS. )
)
) __________________ )
CASE NO. PAC-E-16-16
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Daphne Huang, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued January 5, 2017, submits the following
comments.
BACKGROUND
On December 21 , 2016, PacifiCorp dba 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 . Rocky Mountain asks the Commission to process the Application by Modified Procedure.
STAFF COMMENTS 1 JANUARY 26, 2017
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. In this case, the Company
and the City are electric suppliers under the ESSA. Idaho Code § 61-332A (4) ('"Electric
supplier' means any public utility ... or municipality supplying or intending to supply electric
service to a consumer.").
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; see Order No. 29895 (approving 2005 Agreement). 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.
The Company and City have entered into an Asset Purchase Agreement for which they
jointly request Commission approval. Application at 1. Although the Company and the City
terminated the 2005 (Allocation) Agreement in 2015 , they "have agreed to utilize the terms of [the
2005 Agreement] to govern this asset [purchase]." Id. at 2.
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. at 3. Also, the Company and City have agreed to
STAFF COMMENTS 2 JANUARY 26, 2017
transfer service, and the City has agreed to pay 167% of the previous customer's electric bills for
the prior 12-month period, and to purchase "one transformer, three poles and approximately 1,850
feet of conductor from the Company." Id. Further, the City agrees to pay the Company for legal
and transaction costs. Id. The agreed purchase price is $4,850.67. Exhibit D.
STAFF ANALYSIS
The two major components involved in this asset purchase transaction are the lost revenues
and the values of the facilities utilized to serve the customer. The lost revenues are $103.67,
which would be equal to 167 percent of the total of the customer's electric bills from the prior
twelve months. The facilities utilized to serve the customer include one transformer, three poles,
and approximately 1,850 feet of conductor, and the values of these facilities are $4,747. The total
purchase price of the two components, therefore, is $4,850.67. Staff believes the price is just, fair,
and reasonable, and that the transaction is consistent with the purposes of the ESSA: promoting
harmony between power suppliers, discouraging pirating, eliminating potential duplicative
services, and stabilizing territory with proper Commission oversight.
RECOMMENDATIONS
Staff recommends that the Commission approve the Asset Purchase Agreement as
consistent with the ESSA.
0 /1b Respectfully submitted this ~ day of January 2017.
Technical Staff: Yao Yin
Kathy Stockton
Kevin Keyt
i:umisc:comments/pace l 6. l 6djhklsyykk comments
STAFF COMMENTS
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3 JANUARY 26, 2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 261h DAY OF JANUARY 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. PAC-E-16-16, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
TED WESTON
DANIELE SOLANDER
ROCKY MOUNTAIN POWER
1407 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84116
E-MAIL: [e-mail]
[e-mail]
JACKIE FLOWERS
IDAHO FALLS CITY POWER
140 S CAPITAL AVE
BOX 50220
IDAHO FALLS ID 83405
E-MAIL: [e-mail]
DAT A REQUEST RESPONSE CENTER
E-MAIL ONLY:
[e-mail]
~LlJ1w S CRE ARY
CERTIFICATE OF SERVICE