20191016Comments.pdf

MATT HUNTER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10655
RECEIVED
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Street Address for Express Mail:
I l33l W. Chinden Blvd., Ste. 201-A
BOISE, IDAHO 83714
Attorney for the Commission Staff
BEFORE THB IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
FOR APPROVAL OF THE ASSET SALE
BETWEEN ROCKY MOUNTAIN POWER
AND IDAHO POWER
CASE NO. PAC-E-19.11
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Matt Hunter, Deputy Attorney General, submits the following comments.
BACKGROUND
On August 21,2019, PacifiCorp, doing business as Rocky Mountain Power, filed an
Application requesting approval of an asset sale between PacifiCorp and Idaho Power Company
(Idaho Power).
Rocky Mountain Power submitted its Application for approval under the electric utility
asset transfer statute, Idaho Code $ 6l-328. Rocky Mountain Power requested that its
Appiication be processed under Modified Procedure, Rule 201 et seq. See IDAPA 31.01.01.201
through.204.
With its Application, Rocky Mountain Power asked the Commission to approve its asset
sale ("Agreement") to Idaho Power. Under a joint purchase and sale agreement entered into by
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ISTAFF COMMENTS ocToBER 16,2019
the parties and approved by the Commission in 2)l4,Idaho Power owns a 3.6% undivided
ownership interest in a contiguous 29-mile section of the American Falls to Wheelon 138 kV
line. See Order No. 33313. Under the Agreement, Idaho Power will purchase from the
PacifiCorp a3.6Yo undivided ownership interest in one additional mile, beginning29line miles
from the American Falls substation (Latitude 42.467942,Longitude -112.573621) and ending
near Church Road in Power County (Latitude 42.452821, Longitude -112.569982).
STAFF ANALYSIS
Staff reviewed Rocky Mountain Power's s Application to approve the sale of
transmission assets, as described above, to Idaho Power Company. Staff believes that the sale
should be approved after examining: (l) compliance of the asset transfer with ldaho Code
$ 61-328; (2) the value of the assets being transferred; and (3) conformance to joint agreements
between the two Companies.
Transfer of Assets
Idaho Code $ 6l-328 requires that the transaction is consistent with the public interest;
that the cost and rates for supplying service will not be increased by reason of the transaction;
and 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. Staff has reviewed the
Application and believes this transaction complies with ldaho Code $ 6l-328, subject to the
parties updating the sale price and Bill of Sale as discussed in more detail below.
The purpose of ldaho Code $ 6l-322 is to promote harmony among and between electric
suppliers, prohibit pirating of consumers, discourage duplication of electric facilities, and
stabilize the territories and consumer services of electric suppliers. The agreement between
Idaho Power and PacifiCorp is intended to meet this purpose. The purchase price compensates
PacifiCorp for the net book value of the investment; therefore, neither PacifiCorp nor Idaho
Power's customers are harmed. Additionally, Idaho Power can be relied upon to maintain and
operate the assets being transferred because it is an electric utility operating for decades under
the jurisdiction of the Commission.
2STAFF COMMENTS ocToBER 16,2019
Asset Value
The purchase price is $2,330.65 instead of the $3,389.75 as stated in the Application. See
Production Requests No. 1 and 2. Rocky Mountain Power provided Staff with the proposed
journal entry to record the purchase of one mile of transmission line by Idaho Power that
inadvertently included accumulated depreciation in the purchase price.
The sale is based on the net book value, representing the gross asset of $3,389.75, less
accumulated depreciation of $1,059.10, for a net book value or sales price of $2,330.65. Staff
has reviewed the proposed journal entry and the calculation of the net book value and verified
that $2,330.65 is the correct sales price.
Under ldaho Code $ 6l-328(4), the Commission "may attach to its authorization and
order such other terms and conditions as in its judgment the public convenience and necessity
may require." One of the findings the Commission must find with any transaction subject to
Idaho Code $ 6l-328 is that "the transaction is consistent with the public interest." It would not
be consistent with the public interest for the Commission to approve a transaction for an amount
that is not consistent with the Joint Ownership and Operating Agreement ("JOOA") and Joint
Purchase and Sale Agreement ("JPSA"). Therefore, the Commission has authority to condition
its approval on PacifiCorp and Idaho Power correcting their bill of sale. Staff believes that the
parties will need to amend the bill of sale with the correct sales price, and the Commission's
approval of the transaction should be subject to the parties correcting the bill of sale.
Joint Agreements
Idaho Power currently owns 3.60% undivided ownership interest in 29 contiguous miles of
the American Falls to Wheelon 138 kV line, pursuant to the JPSA approved by this Commission.
PacifiCorp and Idaho Power currently own, as tenants in common, the line subject to the terms of
the JOOA. Staff has reviewed the Application and believes that it conforms with the JPSA and
JOOA, as stipulated in the Bill of Sale.
STAFF RECOMMENDATION
Based on its review of the Application and associated documentation, Staff recommends
the Commission:
JSTAFF COMMENTS ocroBER 16,2019
l. Find the asset transfer conforms to ldaho Code $ 6l-328, subject to submittal of a
revised bill of sale as described in recommendation number 2.
2. Approve the asset transfer, on the condition PacifiCorp and Idaho Power correct
the purchase price in the bill of sale to the net book value, $2,330.65, and provide
the Commission with the corrected, executed bill of sale.
Respectfully submitted this l(day of October 2019.
Matt Hunter
Deputy Attorney General
Technical Staff: Michael Eldred
Kevin Keyt
Kathy Stockton
i:umisc/comments/pacel9. I lmhkskmekls comments
4STAFF COMMENTS ocroBER 16,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF OCTOBER 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO.PAC-E-Ig-I1, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
TED WESTON
DANIEL E SOLANDER
ROCKY MOUNTAIN POWER
I4O7 WN TEMPLE STE 330
SALT LAKE CITY UT 84I 16
E-MAIL: [e-mail]
daniel.solander@p
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
datarequest@pacifi corp. com
JULIA HILTON
IDAHO POWER COMPANY
I22I W IDAHO STREET
BOISE TD 83702
E-MAIL: [e-mail]
SECRETAR
CERTIFICATE OF SERVICE
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