20180525Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:SEAN COSTELLO
DEPUTY ATTORNEY GENERAL
DATE: MAY 23,2018
SUBJECT:ROCKY MOUNTAIN POWER'S APPLICATION FOR APPROVAL OF
THE ASSET PURCHASE AGREEMENT WITH THE CITY OF IDAHO
FALLS (PIONEER DRIVE); CASE NO. PAC-E-18-03.
On May 3, 2018, Rocky Mountain Power, a division of PacifiCorp ("Compafly"),
filed an Application requesting authority to sell and transfer certain electric facilities to the City
of Idaho Falls, Idaho ("City";, to supply electric service to locations at or near Pioneer Drive,
Idaho Falls, Bonneville County. Application at l. The Application falls under the Electric
Supplier Stabilization Act (ESSA). See ldaho Code $ 61-333 and Idaho Code $ 6l-328 et seq.
Rocky Mountain asks the Commission to process the Application by Modified Procedure. Id. at
4.
THE ESSA
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 $ 6l-332(2). As such, the ESSA
prohibits an electric supplier from furnishing electric service to a consumer that is or has been
"lar.r,fully connected for electric service to facilities of another electric supplier except as
provided in this act." Idaho Code $ 6l-332B.
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 $
6l-333(l). 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
DECISION MEMORANDUM I
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 $ 6l-3321r(4)t.
BACKGROUND
On October 9,2017, the Company and City entered into an Allocation Agreement
("2017 Agreement") "to reduce duplication of service and promote stability in their respective
service areas." Application at2 and Attachment A. The 2017 Agreement was approved by the
Commission on December 5, 2017. See Case No. PAC-E-I7-02; Order No. 33943.
The 2017 Agreement provides that "[t]he Company and the City have agreed to
transfer service and the City has agreed to pay 167 percent of the customers' previous twelve
months electric bills in addition to purchasing the facilities described in Exhibit A to the Asset
Purchase Agreement." Application at 3.
APPLICATION
The Company and the City now jointly petition the Commission for approval of the
Asset Purchase Agreement, included as Attachment A to its Application, and service area
exemption (transfer of electric service) wherein the City agrees to serve the load of the customers
described in Exhibit B to the Asset Purchase Agreement, and pay the Company for the
transferred assets, reimburse revenue, and as well as legal and transactional costs. 1d.
STAFF RECOMMENDATION
Staff recommends that the Application be processed by Modified Procedure with a
comment deadline of August 28,2018, and a Company reply comment deadline of September
I l, 201 8.
COMMISSION DECISION
Does the Commission wish to issue Notice of the Application and Notice of
Modified Procedure with a comment deadline of August 28,2018, and Company reply comment
deadline of September I l, 2018?
Sean Costello
Deputy Attorney General
PACEI803-scl
I "'Electric supplier' means any public utility . . . or municipality supplying or intending to supply electric service to
a consumer." Idaho Code $ 6l -332A(4).
2DECISION MEMORANDUM