20190711final_order_no_34376.pdf

Office of the Secretary
Service Date
July 11,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.PAC-E-19-06
FOR APPROVAL OF THE PROFESSIONAL )WAY-BROADWAY ASSET PURCHASE )AGREEMENT AND TRANSFER OF )ORDER NO.34376
SERVICE BETWEEN ROCKY MOUNTAIN )POWER AND THE CITY OF IDAHO FALLS )
On May 10,2019,PacifiCorp dba Rocky Mountain Power ("Company")applied to the
Commission for an order approving the Broadway and Professional Way Asset Purchase
Agreement ("Asset Purchase Agreement")between the Company and the City of Idaho Falls
("City").Under the Asset Purchase Agreement,the Company would transfer to the City certain
electric facilities used to supply six (6)electric service customers,along with the rights and
obligations to serve those customers.The Company submitted its Application under the Electric
Supplier Stabilization Act ("ESSA"),Idaho Code §61-332,et seq.,and the electric utilitytransfer
statute,Idaho Code §61-328.The latter statute states that the Commission "shall issue a public
notice and shall conduct a public hearing upon the application (emphasis added)."
The Commission issued a Notice of Application,Notice of Modified Procedure,and
Notice of Telephonic Hearing.Order No.34337.The Commission held a hearing on June 11,
2019.No one testified at that hearing.Commission Staff then filed comments recommending the
Commission approve the Application.The Company did not reply,and no other comments were
filed.
Having reviewed the record,we now approve the Application as discussed below.
BACKGROUND
Public utilities are statutorilyprohibited from transferring any property "used in the
generation,transmission,distribution,or supply of electric power"without first being authorized
to do so by the Commission.Idaho Code §61-328(1).Before the Commission can approve such
a transaction,it must first find:(a)the transaction is consistent with the public interest;(b)the cost
of and rates for supplying service will not be increased by reason of such transaction;and (c)that
the applicant for such acquisition or transfer has the bona fide intent and financial ability to operate
and maintain said property in the public service.Idaho Code §61-328(3).
The purpose of the ESSA is to:(1)promote harmony between electric suppliers;(2)
prohibit the "pirating"of customers;(3)discourage duplication of electric facilities;(4)actively
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supervise the conduct of electric suppliers;and (5)stabilize service territories and customers.
Idaho Code §61-332(2).The ESSA prohibits an electric supplier (e.g.utility,municipality,or
cooperative)from serving another electric supplier's current or former customers.Idaho Code §
61-332(B).However,an exception to the general rule exists within the ESSA framework allowing
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(1).Allocation agreements must be submitted
to the Commission for approval and will only be approved upon finding that it conforms to the
provisions and purposes of the ESSA.Id.
THE APPLICATION
The Company entered the Asset Purchase Agreement and asked the Commission to
approve it pursuant to the October 9,2017 Service Allocation Agreement between the Company
and the City.The Commission approved the Service Allocation Agreement in Order No.33943.
The Service Allocation Agreement is the framework for implementing the ESSA in transactions
between the Company and the City.Under the Service Allocation Agreement,the Company and
the City have agreed that compensation for transferring customers'service rights and
responsibilities is 167%of the transferring customers'most recent 12-months electric bills and the
cost of the assets used in service of those customers plus applicable legalltransactional costs,
separation costs,and tax gross-up.The Application and Asset Purchase Agreement list the total
value of the transaction at $31,751.
THE COMMENTS
Upon its investigation and review,Staff believes that the $31,751 purchase price
conforms to "the intent of the ESSA,the electric utility transfer statute,and is consistent with prior
Commission orders."Comments at 2.Staff verified that the methodology used to calculate the
value of this transaction is consistent with the method prescribed in the Service Allocation
Agreement.Id.at 3.Staff therefore recommends that the Commission approve the Company's
Application for approval of the Asset Purchase Agreement with the City.Id.at 4.
COMMISSION FINDINGS AND DISCUSSION
The Commission has jurisdiction over this matter under Idaho Code §§61-328,61-
333.The Commission has reviewed the record,including the Asset Purchase Agreement and
comments of Commission Staff.We find the Asset Purchase Agreement satisfies the ESSA,Idaho
Code §61-332 et seq.,the electric utility transfer statute,Idaho Code §61-328,the 2017 Service
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Allocation Agreement and this Commission's prior orders.Accordingly,we find it reasonable to
approve the Application and Asset Purchase Agreement.
ORDER
IT IS HEREBY ORDERED that the Company's Application is approved.The sale of
electric facilities and transfer of service territory as contemplatedin the Company's Asset Purchase
Agreement with the City is approved,effective as of today's date.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within 21-days of the service date of this Order with regard to any matter decided
in this Order.Within seven 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 July 2019.
PA KJEL ,PRESIDENT
KRÏSTINE RAP ,CØMMISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Haman
Commission Secretary
I.\Legal\ELECTRIC\PAC-E-19-06\orders\PACE1906final dh docx
ORDER NO.34376 3