20180926final_order_no_34156.pdf

Office of the Secretary
Service Date
September 26,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THE APPLICATION OF ROCKY )CASE NO.PAC-E-18-03
MOUNTAIN POWER FOR APPROVAL OF )THE ASSET PURCHASE AGREEMENT )WITH THE CITY OF IDAHO FALLS )ORDER NO.34156
(PIONEERDRIVE))
On May 3,2018,Rocky Mountain Power,a division of PacifiCorp ("Company")filed
an Application asking the Commission to approve the Company's Asset Purchase Agreementwith
the City of Idaho Falls,Idaho ("City").With the Agreement,the Company seeks to transfer certain
electric facilities to the City in order to supply electric service to locations at or near Pioneer Drive,
Idaho Falls,Bonneville County.The Company requested that its Application be processed under
Modified Procedure,Rule 201 et seq.See IDAPA 31.01.01.201 et seq.
The Commission issued an order setting an August 28,2018,deadline for interested
persons to file comments.Order No.34081.Commission Staff filed comments,recommending
the Commission approve the Application.In addition,a public hearing was held August 21,2018.
One member of the public testified at the hearing in support of the Application.See Telephonic
Hearing Transcript Vol.1 at 5.
Having reviewed the record,the Commission grants the Company's Application and
approves the Asset Purchase Agreement,as detailed below.
BACKGROUND AND APPLICATION
The Company and City are electric suppliers under the Electric Supplier Stabilization
Act (the "ESSA"),Idaho Code §§61-328 and 333.On October 9,2017,the Company and City
entered into an Allocation Agreement ("2017 Allocation Agreement")"to reduce duplication of
service and promote stability in their respective service areas."See Application at 2 and
Attachment A.The 2017 Allocation Agreement allowed one supplier to transfer a customer's
service to the other supplier as long as the acquiring supplier agreed to pay the transferor 167%of
the transferred customer's electric bills from the prior 12 months,and to buy the facilities the
transferor no longer needs to serve that customer.Application at 2-3.The Commission approved
the 2017 Allocation Agreement on December 5,2017.See Case No.PAC-E-I7-02;and Order No.
33943.
ORDER NO.34156 1
With its current Application,the Company asks the Commission to approve an Asset
Purchase Agreement which would allow the City to purchase certain electric facilities currently
owned and utilized by the Company to supply electric service to locations at or near Pioneer Drive,
Idaho Falls,Bonneville County.The City has agreed to pay the Company for the assets transferred,
as well as revenue reimbursement,and legal and transaction costs.Consistent with the 2017
Allocation Agreement,the City has agreed to pay the Company 167%of the total (see Exhibit A
to the Asset Sales Agreement)of the respective customer's electric bills from the prior twelve-
month period,as well as the purchase of poles,wires,cross arms,insulators,guys,and other
facilities no longer needed or required to service the transferred customer.The Company and City
have agreed to a total asset sales price of $77,892.
STAFF COMMENTS
Staff recommended the Commission approve the Application.Staff believes the
proposed transaction conforms to the ESSA,prior Commission orders (specifically Order No.
33493),and the Parties 2017 Allocation Agreement.Staff Comments at 2.Staff concluded that
funds from the sale sufficientlyoffset the undepreciated rate base of assets being transferred to the
City,that the value of the assets are removed from rate base and,therefore,the transaction will not
harm rate payers.Id.at 2-3.Staff also stated that the accounting treatment for the sales price is
consistent with the methodology the Commission approved in Order No.33493.Staff also noted
that because the developer of the new service area initiated the asset sale and transfer of service to
the City,pertinent customers are aware of the asset sale and transfer of service.Id.at 3.
DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter under Title 61 of the Idaho Code,
specifically Idaho Code §§61-328,61-502 and 61-503 (the Commission has power to investigate
a public utility's contracts).The Commission has reviewed and considered the Company's
Application,its Asset Purchase Agreement with the City,and Staff and customer comments.The
Commission also held a public hearing according to Idaho Code §61-328(l)and (2),where one
witness testified in favor of the Application.
Having reviewed the record,the Commission finds that the Asset Purchase Agreement
is consistent with the 2017 Allocation Agreement,which we found complies with the ESSA in
Case No.PAC-E-17-12;Order No.33943.The Commission further finds the sale of electrical
).34156 2
assets complies with Idaho Code §61-328,and is consistent with the public interest and will not
increase costs and rates of supplying service.The Commission is also satisfied the Company
appropriately determined the assets'total asset sales price and accounting treatment.
The Commission thus finds it reasonable to grant the Application and approve the Asset
Purchase Agreement.
ORDER
IT IS HEREBY ORDERED that the Company'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 September 2018.
PAUL K ELLAN R,PRESIDENT
KRI#TINERAPE MISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
I:\Legal\ELECTRIC\PAC-E-18-03\Orders\PACE1803final se docx
ORDER NO.34156 3