20100716Idaho Power Company's Brief.pdf

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IN THE SUPREME COURT OF TH STATE OF IDAHO 21UO JUL i 6 AMI I: 36
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY TO MODIFY ITS
RULE H LIN EXTENSION TARF RELATED
TO NEW SER~CE ATTACHMNTS AND
DISTRIBUTION LIN INSTALLATIONS.
BUILDING CONTRACTORS
ASSOCIATION OF SOUTHWESTERN
IDAHO,
Petitioner-Appellant,
v.
IDAHO PUBLIC UTILITIES COMMISSION and
IDAHO POWER COMPANY,
Respondents on AppeaL.
) IDAHO f~llGJ-~jÇ'--h"'"l
) UTlUrlES \.Uf'~;MI::i:ivn
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) Supreme Court Docket
No. 37293-2010
) (IPUC Case No~IPC-E-08-22)
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RESPONDENT IDAHO POWER COMPANY'S BRIF
Appeal from the Idaho Public Utilties Commission
Commissioner Marsha H. Smith, Presiding
Michael C. Creamer (ISB No. 4030)
Michael P. Lawrence (lSB No. 7288)
GIVENS PURSLEY, LLP
601 West Banock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Attorneys for Petitioner-Appellant
Building Contractors Association of
Southwestern Idaho
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LAWRNCE G. WASDEN
Attorney General
KRSTIN A. SASSER (ISB No. 6618)
WELDON B. STUTZMAN (lSB No. 3283)
Deputy Attorneys General
Idaho Public. Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Attorneys for Respondent Idaho Public Utilities Commission
LISA D. NORDSTROM (ISB No. 5733)
DONOVANE. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street
P.O. Box 70
Boise, Idaho 83707
Attorneys for Respondent Idaho Power Company
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TABLE OF CONTENTS
I. STATEMENT OF CASE........................................................................................................... 1
A. Nature of the Case...............................................................................................................1
B. Coure of Proceedings ........................................................................................................ 1
C. Statement of the Facts................................................................,....~................................... 3
1. The Cost-Causation Priciple: Growth Should Pay Its Way....................................... 3
2. Termnal Facilities and Line Installation Allowances .................................................. 4
3. The Commssion's Intial Order No. 30853 .................................................................6
4. BCA's Petition for Reconsideration ............................................................................. 7
5. The BCA's First Petition for Intervenor Funding.........................................................8
6. The Commission's Order on Reconsideration..............................................................8
II. ISSUES PRESENTED ON APPEAL.................................................................................. 10
A. Whether the Commission's Determination to Base Line Extension Allowances
on the Cost of Stadard Equipment Necessar to Connect Servce to New
Customers Is Based Upon Substatial and Competent Evidence. .................................... 10
B. Whether the Commssion Abused Its Discretion When It Denied the BCA
Intervenor Funding..... ... .......... ....... ..... ...... .... ........ ...... .... ..... ...... .......... ...... .... ....... ............. 10
C. Whether the BCA Is Entitled to an Award of Attorney Fees and Costs on Appeal. ........ 10
DI. STANAR OF REVIEW ................................................................................................11
IV. ARGUMENT ........................................................................................................................ 14
A. Growt-Related Line Extension Investments Increase Rates to Customers Not
Served By the Line Extensions ....................................................................................:....14
B. The Commission Regularly Pursued Its Authority to Set Line Extension
Allowances Based on the Cost of Stadard Equipment to New Customers..................... 15
1. Allowances Reflecting the Cost of Line Extension Facilities Do Not
Discrimiate Against New Customers ........................................................................ 17
2. Allowances Set in Order No. 30955 Do Not Discriminate Between New
Customers Located Inside and Outside Subdivisions.................................................18
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a. All Customers and Developers Receive the Same Stadard Terminal
Facilities Allowance. ..............................................................................................20
b. Line Extension Cost Recovery Does Not Create "Excess Revenue" ..................... 22
c. Building Contractors' Proposed Alternative to Order No. 30853 Is Flawed.......... 23
C. The Commssion Did Not Abuse Its Discretion When It Denied the BCA
Intervenor Funding...... ..... .......... .......... ........ .... .... ..... ... ...... .... ......... .......... .... ....... .... ... ...... 25
D. The BCA Is Not Entitled to Attorney Fees and Costs on Appeal..................................... 26
1. Idaho Code § 12-117 Is Preempted By Another Statute............................................. 26
2. Even ifIdaho Code § 12-117 is Not Preempted, It Does Not Apply to
Legislative Agencies like the Commission... ...... ...... ........ ............ ..... ............ ....... ...... 28
3. The Intant Case Does Not Satisfy the Requirements of the Private
Attorney General Exception to the American Rule on Attorney Fees........................ 28
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v. CONCLUS.ION.......................................................................................................................29
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TABLE OF AUTHORITIES
Cases
A. W Brown Co., Inc., v. Idaho Power Co., 121 Idaho 812, 815, 828 P.2d 841,844
(1992)...............................................:..................................................................................11, 12
iJ Boise Water Corp. v. Idaho Public Util. Comm 'n, 97 Idaho 832, 840, 555 P2d 163,
171 (1976)................................................................~................................................................13
Boise Water Corp. v. Public Utilties Comm'n, 128 Idao 534, 916 P.2d 1259 (1996)...............17
1J Empire Lumber Co. v. Washington Water Power, 114 Idao 191, 193, 755 P.2d 1229,
1231 (1987)...............................................................................................................................12
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Hayden Pines Water Co. v. IPUC, 111 Idaho 331, 336, 723 P.2d 875, 880 (1986)............... 12, 13
Hellar v. Cenarrusa, 106 Idaho 571; 682 P2d 524 (1984) .................................................... 27, 29
Hulet v. Idaho Public Utilties Comm 'n, 138 Idaho 476, 65 P.3d 498 (2003) ............................. 12
Idaho Fair Share v. Idaho Public Utilties Comm 'n, 113 Idaho 959, 751 P.2d 107 (Idaho) .......25
Idaho Power Co. v. Idaho Public Utilties Comm 'n, 102 Idao 744, 639 P.2d 442 (1981).........26
Idaho State Homebuilders v. Washington Water Power, 107 Idao 415, 420, 690 P.2d
350 (1984)..........................................................................................................................passim
Industrial Customers of Idaho Power v. Idaho Public Utilties Comm 'n, 200 P.U.R.
4th 371, 134 Idao 285, 288, 1 P.3d 786, 789 (2000) ................................................... 11, 12, 13
JR. Simplot Co., Inc., v. Idaho State Tax Comm 'n, 120 Idaho 849, 862, 820 P.2d 1206,
1219 (1991)...............................................................................................................................25
K N Energy, Inc., v. F.E.R.C., 133 P.U.R. 4th 607, 968 F.2d 1295, 1300 (C.A.D.C.1992)........... 4
Key Transp., Inc., v. Trans Magic Airlines Corp., 96 Idao 110, 112-13,524 P.2d 1338,
1340-41 (1974).......................................................................................................................... 11
-j Owner-Operator Independent Drivers Ass 'n, Inc., v. Idaho Public Utilties Comm 'n,
125 Idao 401,871 P.2d 818 (1994) citing A. W Brown Co., Inc., v. Idaho Power
Co., 121 Idaho 812, 819,828 P.2d 841, 848 (1992)...........................................................28,29,
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1 Rosebud Enterprises v. Idaho PUC, 128 Idao 624, 631, 917 P.2d 781, 788 (1996) ......,...........12
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Rosebud Enterprises, Inc., v. Idaho Public Utilties Comm 'n, 128 idaho 609,618,
917 P.2d 766, 775 (1996)..........................................................................................9,11,12,13
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Utah-Idaho Sugar Co. v. Intermountain Gas Co., 100 Idaho 368, 376,597 P.2d 1058,
1066 (1979)...............................................................................................................................13
Washington Water Power Co. v. Idaho Public Utilties Commission, 101 Idao 567,
579,617 P.2d 1242, 1254 (1980)....................................................................................8,13,18
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J Rules
IDAPA 31.01.01.164 ......................................................................................................................8
IDAPA 31.01.01.165 .................................................................................................................... 10
IDAPA 31.01.01.201 ......................................................................................................................2
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Statutes
Idaho Code § 12-117...............................................................................................................26,28
Idaho Code § 12-117(1)................................................................................................................26
Idaho Code § 12-117(4)( c )............................................................................................................ 28
¡ Idaho Code § 12-121.....................................................................................................................27
J Idaho Code § 61-315.................................................................................................................4,16
Idaho Code § 61-503.................................................................................................................4, 16
Idaho Code § 61-617A...........................................................................................................passim
Idaho Code § 61-617A(2) ............................................................................................................. 26
Idaho Code § 61-617A(2)(a).........................................................................................................25
Idaho Code § 61-617A(2)(b) ..................................................................................................10,28
Idaho Code § 61-617A(2)(d) .................................................................................................. 10,28
Idaho Code § 61-617A(3).......................................................................................................25,26
Idaho Code § 61-624.......................................................................................................................3
Idaho Code § 61-626..................................................................................................................... 11
Idaho Code § 61-629............................................................................................................... 11,29
Idaho Code § 62-502..................................................................................................................... 15
Idaho Code § 67-5201...................................................................................................................28
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IPUC Orders
Order No. 26780 .,...........................................................................................................................5
Order No. 30687 .........................................................................................................................1,2
Order No. 30719 .............................................................................................................................2
Order No. 30746 .............................................................................................................................2
Order No. 30853 .................................................................................................................... passim
Order No. 30883 .....................................................................................................................2, 7, 8
Order No. 30896 ............................................................................................................................. 8
Order No. 30955 .................................................................................................................... passim
Other Authorities
Aricle V, Section 9 of the Idao Constitution ..... .......... ...... ............... .... ...... ........ ..... ... ...... ..... .... 11
S.L. 1985, ch. 126, § 1................................................................................................................:.26
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I. STATEMENT OF CASE
A. Nature of the Case.
Ths appeal is about the Idaho Public Utilities Commssion's ("Commssion") authority
under Title 61 of the Idaho Code to determe how Idao Power Company ("Idao Power" or
"Company") may impose chages for line extensions. Commssion Order Nos. 30853 and 30955
issued in Case No. IPC-E-08-22 modify Idaho Power's Rule H line extension tarff for new
servce attachments and distrbution installations or alterations. In Order No. 30955, the
Commission denied the Building Contractors Association of Southwestern Idaho ("BCA'; or
"Building Contractors") the relief they requested in their petition for reconsideration of Order
No. 30853. R. VoL. IV, pp. 648-678. Ths appeal is directed to those portions of the
aforementioned Commssion Orders approving changes to the amount that customers and real
estate developers pay to have equipment intalled to connect to Idaho Power's distrbution
system, and denying the BCA's request for intervenor fuding of its costs of parcipating in the
case.
B. Course of Proceedings.
On October 30, 2008, Idaho Power filed an Application seekig authority to modify its
line extension taff. R. VoL. I, pp. 1-55. Specifcally, the Company sought to update the charges
that recover the costs it incurs for installing new service lines and relocatig existing electrc
distribution facilities. On November 26, 2008, the Commission issued a Notice of Application
and Intervention Deadline. Order No. 30687; R. VoL. I, pp. 94-97. Four paries petitioned to
intervene and were granted intervention: the BCA, the City of Nampa, The Kroger Company,
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and Association of Canyon County Highway Distrcts ("ACCHD"). The Commission issued its
Notice of Paries on December 30,2008. R. VoL. I, pp. 126-128.
Pursuant to Order No. 30687, the paries met on Januar 14, 2009, to discuss the
processing of ths case. The parcipatig paries agreed that the case did not require a techncal
hearng or pre-filed testimony and therefore recommended that the case be processed under
Modified Procedure! with comments due no later than March 20, 2009. Order No. 30719; R.
VoL. 1, pp. 129-132. The comment deadlie was subsequently extended to April 17,2009, with
response comments due by May 1,2009. Order No. 30746; R. VoL. I, pp. 146-149.
On July 1, 2009, the Commssion issued Order No. 30853 parially approving the
Company's request to modify its line extension tarff. R. VoL. II, pp. 313-326. The Ada County
Highway Distrct ("ACHD"), City of Nampa, Association of Canyon County Highway Distrcts
(collectively "the Distrcts"), and the BCA all filed timely Petitions for Reconsideration. The
Distrcts argued that the Commssion exceeded its statutory authority in approving the changes to
Section 10 of the taff ("Relocations in Public Road Rights-of-Way"). The BCA objected to
changes to the line extension rate strctue. On July 29, 2009, Idaho Power fied an Answer to
the Petitions. R. VoL. II, pp. 383-404.
In Order No. 30883 issued Augut 19,2009, the Commssion granted in par and denied
in par the Petitions for Reconsideration. R. VoL. III, pp. 405-410. The Commission granted
reconsideration to the Distrcts to review the legal arguments, scheduling briefs and an ora
i "Modified Procedure" refers to development of the Commission's record by wrtten submissions
following a preliminar Commission fidig that the public interest may not require a hearg to consider the issues
presented in that proceeding. IDAPA 31.01.01.201.
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argument on October 13, 2009. The Commssion parially granted reconsideration to the BCA
and scheduled an evidentiar hearg regarding the appropriate line extension allowances. The
evidentiar hearng was held on October 20, 2009. Post-hearg reconsideration briefs were
filed by BCA and Idaho Power on October 27,2009. R. VoL. III, pp. 586-608. On November 9,
2009, the BCA filed a Petition for Interenor Funding. R. VoL. IV, pp. 612-647.
Afer reviewig the initial record, the reconsideration testiony and briefs, and the
intervenor fuding petition, the Commission issued fmal Order No. 30955 on reconsideration
affirming, rescinding, amending, and clarfyg par of its initial Order pursuant to Idaho Code §
61-624. R. VoL. IV, pp. 648-678. On Janua 10,2010, the BCA filed an appeal to the Supreme
Cour from the Commission's fial Order. R. VoL. IV, pp. 685-690.
C. Statement of the Facts.
1. The Cost-Causation Priciple: Growth Should Pay Its Way.
Idaho Power's line extension taff is the kid of non-recurg chage "imposed upon
new customers because the service they require demands an extension of existing distrbution or
communcation lines and a charge is imposed to offset the cost of the utility's capita
investment" described by the Cour in Idaho State Homebuilders v. Washington Water Power,
107 Idaho 415, 420,690 P.2d 350 (1984).
The Rule H line extension tarff promotes one of the fudamental principles of utility
reguation: that to the extent practicable, utility costs should be paid by those entities that cause
the utility to incur the costs. Order No. 30955, p. 21; R. VoL. IV, p. 668. Ths principle is often
referred to as "cost-causation" and is one of the bedrocks of utility regulation. "Simply put, it
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ha been traditionaly required that all approved rates reflect to some degree the costs actually
caused by the customer who must pay them." K N Energy, Inc., v. FE.R.C., 133 P.U.R. 4th 607,
968 F.2d 1295, 1300 (C.A.D.C. 1992). Idaho Power's line extension taff is a good exaple of
how the Commssion exercises its jurisdiction to address "cost-causation" by requirg those
entities that cause Idaho Power to incur additional costs to pay those additional costs.
Ideally, utility rates would always reflect the "cost of service" - that is, the cost involved
in providing service to a paricular customer. If the "cost-causers" do not pay, the electrc rates
for the utilities' other customers will be higher than they would otherwse be. Order No. 30955,
p. 21; R. VoL. IV, p. 668. If the Company does not recover costs of individual line extensions
from the persons requesting them, Idao Power's rates are neither ''just and reasonable" as
requied by Idaho Code § 61-503 nor non-discrimatory and non-preferential as requied by
Idaho Code § 61-315. Order No. 30955, p. 13; R. VoL. IV, p. 660.
2. _ Terminal Facilties and Line Installation Alowances.
Unlike generation or tranmission plant costs, distrbution plant costs can be associated
with the specific customers that use them. Thoughout most of Idaho Power's history, the costs
of new distrbution plant have been recovered in two ways: (1) parally though up-front capital
contrbutions from new customers and (2) parally though electrc rates charged to all
customers. Order No. 30853, p. 10; R. VoL. II, p. 322. The porton collected though electrc
rates represents the investment in new facilities made by Idaho Power and is often referred to as
a constrction or instalation "allowance." Id. To the extent customers pay up-front costs,
facility investment does not occur and rates do not increase.
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Prior to the last line extension cost recovery case filed in 1995, allowances for customer
classes exceeded the Company's historical investments made on behalf of customers and were
connected load. Tr. VoL. II, p. 285, L. 22 and p. 286, L. 2. Based on findings it made in Order
No. 26780 in Case No. IPC-E-95-18 in Febru 1997, the Commssion calculated allowances
for new customers based on the total embedded cost of distrbution facilities. R. VoL. IV, p. 639.
Because total embedded cost is made up of two components, termal facilities and line
extensions, the Commssion directed the utility to pay the cost of termnal facilities first with any
remaing allowance applied to the line extension porton of the costs. Id, pp. 639-640. Line
instalation allowances were admnistered in ths fashion until December 1, 2009, when Order
No. 30955 went into effect.
Under the line extension taff approved in Order No. 30955, allowances equa to the
instaled costs of "standard" overhead 3 terminal facilities provide a fixed credit toward the
termal facilities required for customers requestig servce. Stadard termnal facilities include
tranformer(s), service conductor, and meter(s). The fixed allowance of $1,780 for single phase
service or $3,803 for thee phase service is based on the cost of the most commonly installed
overhead terminal facilities.
2 "Embedded costs" are a snapshot of the cost of facilties recovered in rates at a given point in time.
Futue rate adjustments wil reflect the change in curent costs. over time.
3 Overhead service has long been considered the Company's stadard service. Underground service is
provided at an additional cost to the par requestig it.
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Line installation allowance amounts are firmly anchored in Idaho Power's actual costs of
instaling terminal facilities, as demonstrated in the Company's discovery responses and
Company witness Scott Sparks' workpapers. R. VoL. II, pp. 294-299. Ths fixed allowance
approach mitigates intra-class and cross-class subsidies by requing customers with greater
facilities requiements to pay a larger portion of the cost to serve them rather than socializg
those additional costs to all ratepayers. Ths approach for determing line instalation
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allowances also reduces upward pressure on rates by offsetting the cost of physically connecting
new customers to Idaho Power's system.
3. The Commission's Initial Order No. 30853.
On July 1,2009, the Commission issued fi Order No. 30853 approving the Company's
proposed allowances, miscellaneous costs, langue regardig recovery of the costs of highway
relocation expenses, and the requested chages to format and definitions. R. VoL. IT, pp. 313-
326. The Commssion fuher approved a "cap" of 1.5 percent on general overhead costs,
maintaed the existig five-year period for Vested Interest Refuds, and eliminated lot refuds.
The Commssion determined that Idaho Power's proposed fixed allowances of$I,180 for
single phase servce and $3,803 for thee phase service represent a fair, just, and reasonable
investment by the Company for the benefit of new customers when allocatig line extension
costs. Id, p. 322. The Commssion also found that the overall distrbution allowance provided
to developers, whether in the form of a subsequent refud or an upfront reduction in developer
contrbution (i.e., allowance), is properly based on the amount of distrbution investment that can
be supported by new customer rates. Id, p. 324.
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4. BCA's Petition for Reconsideration.
The BCA filed a Petition for Reconsideration on July 22, 2009, requesting
reconsideration of Commssion fidings regarding termal facilities allowances, per-lot refuds,
and the tie period in which vested interest refuds may be made. R. VoL. II, pp. 358-372. The
BCA argued that Order No. 30853 approved an inherently discriinatory rate strctue for line
extensions by imposing unequal charges on customers receiving the same level and conditions of
servce. According to the BCA, ths discnmination existed both as between existing customers
and new customers and as among new customers, dependig upon whether they receive servce
inside or outside of a subdivision and the number of new customers to be served by the requested
facilities. Additionally, the Distrcts petitioned for reconsideration of unelated portions of Rule
H. fll., pp. 341-357 and pp. 373-382. On July 29, 2009, Idaho Power filed an Answer to the
Petitions. Id., pp. 383-404.
On Augus 19, 2009, the Idaho Public Utilities Commssion issued Order No. 30883
grting and denying reconsideration in par, and set fort a schedule for hearg and briefs. Id.
at R. VoL. III, pp. 405-410. With regard to the BCA's Petition, the Commssion found it
appropriate to grant reconsideration on the limted issue of the amount of appropnate allowances.
Id., p. 408. The Commssion denied reconsideration of the five-year vested-interest refud
penod and the per-lot refuds because the BCA's petition failed to specifically address why the
five-year vested-interest refud period or the elimination of the per-lot refud is uneasonable or
erroneous and did not provide sufficient or persuasive evidence to support its proposal to move
to a ten-year lot refud policy. ¡d.
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5. The BCA's First Petition for Intervenor Funding.
On July 13, 2009, BCA filed a request for $28,386.35 of intervenor fuding pursuat to
Idaho Code § 61-617 A to recover its legal fees, witness fees, and reproduction costs of
paricipatig in the proceeding. The BCA acknowledged that its Petition was untimely but
submitted that it was an "inadvertent and unntentional oversight by its legal counel with respect
to the correct timing for submission of requests for intervenor fuding." R. VoL. II, p. 328. In
Order No. 30896 issued on September 3,2009, the Commission denied the BCA's request for
intervenor fuding as untimely under the Commssion Procedural Rule 164 because the foureen-
day deadline expired on May 15, 2009. IDAPA 31.01.01.164; R. VoL. III, pp. 428-430. The
BCA did not file its request until July 13,2009. R. VoL. II, pp. 327-340.
6. The Commission's Order on Reconsideration.
Order No. 30883 scheduled an evidentiar hearg regardig the appropriate line -
extension allowances contaed in Rule H. R. VoL. III, pp. 405-410. The evidentiar hearg
was held on October 20, 2009. Final reconsideration briefs were fied by the BCA and Idaho
Power on October 27,2009. ¡d., pp. 586-608. On November 9,2009, the Buildig Contractors
fied a second Petition for Intervenor Funding. Id, pp. 612-647.
The Idaho Public Utilities Commssion issued Order No. 30955 on November 30,2009.
R. VoL. IV, pp. 648-678. In that Order, the Commssion rejected the BCA's arguent that the
Commssion canot change its methodology from the 1995 case based on prior Idaho Supreme
Cour decisions indicating that it can alter its decisions "so long as (the) Commssion enters
sufcient findings to show that its action is not arbitrar and capricious." Washington Water
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(1980); Rosebud Enterprises, Inc., v. Idaho Public Utilties Comm'n, 128 Idao 609, 618,917
P .2d 766, 775 (1996) citing Intermountain Gas Co. v. Idaho Public Util. Comm 'n, 97 Idaho 113,l
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119,540 P.2d 775, 781 (1975).
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The Commission reaffirmed its previous decision that allowances should be based upon
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the cost of stadard termna facilties and not on a per lot basis. R. VoL. IV, p. 668. Allowances
of $1,780 for single phase servce and $3,803 for thee phase servce ensure that customers are
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treated and charged equitably based on stadard overhead service costs, thereby mitigating intra-
class and cross-class subsidies. Id., p. 669. The Commssion noted that because the allowance is
allocated on a per trsformer basis and not a per customer basis, the allowance inide and
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outside subdivisions provides the same Company investment. Id., p. 668.
Order No. 30955 explicitly noted that it was addressing distrbution costs, not resource
costs, and setting line extension charges based on the costs of stadad term facilities that
will be used to serve only the customer who is charged. ¡d., p. 669. The Commssion relied on
the Supreme Cour's observation in the Homebuilders case that there is no discrimination
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charges to apply prospectively. Id.; Homebuilders, 107 Idaho at 421, 690 P.2d at 350. More
specifically, the Cour noted that no discriation is present "when anon-recurg charge (e.g.,
a line extension charge) is imposed upon a new customer because the service they requie
demands an extension of existing distrbution or communcation lines and a charge is imposed to
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offset the utility's capita investment (in serving new customers)." Id.
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The Commssion sumarzed its position as follows:
Idaho Power's line extension charges are imposed only .on those
customers who will be served by the new facilities. The new
facilities will provide servce only to those customers who pay for
them. The line extension allowances and charges are based upon
the cost of terminal facilities. Once new customers pay the
nonrecurg charge/line extension costs, they become existig
customers and pay pursuat to the same rate schedule as all other
existing customers in their class. As such, there is no distinction
between new and existig customers in regard to nonrecurng
rates and no rate discrimination. Idaho Code § 61-315.
R. VoL. IV, p. 670.
The Commission also denied the BCA's second request for intervenor fuding fied on
November 9, 2009, as failing to meet the requiements of Idaho Code § 61-617A and
Commssion Procedural Rule 165. ¡d., p. 673; IDAPA 31.01.01.165. More specifically, the
Commssion found that the BCA' s arguments did not materially contrbute to its fi decision in
the case because it presented the same arguent it did in the prior 1995 case and the BCA's
advocacy did not address issues of concern to ''te general body of users or consumers" as
required by Idaho Code § 61-617A(2)(b) and (d). Id. On Janua 10,2010, the BCA filed an
appeal to the Supreme Cour from the Commission's final Order. R. VoL. IV, pp. 685-690.
II. ISSUES PRESENTED ON APPEAL
A.Whether the Commission's Determination to Base Line Extension Allowances on
the Cost of Standard Equipment Necessary to Connect Service to New Customers Is
Based Upon Substantial and Competent Evidence.
B.Whether the Commission Abused Its Discretion When It Denied the BCA
Intervenor Funding.
C. Whether the BCA Is Entitled to an Award of Attorney Fees and Costs on AppeaL.
RESPONDENT IDAHO POWER COMPAN'S BRIF - 10
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III. STANDARD OF REVIEW
The stadad of review on appeal from an Order of the Commission has been clearly
ariculated in Idao law. Aricle V, Section 9 of the Idaho Constitution provides that the
Supreme Cour shall have jursdiction to review on appeal any Order of the Commssion. An
issue not presented to the Commission for rehearng will not be considered on appeal. Idaho
Code §§ 61-626 and 61-629; Industrial Customers of Idaho Power v. Idaho Public Utilties
Comm 'n, 200 P.U.R. 4th 371, 134 Idaho 285,288, 1 P.3d 786, 789 (2000); Key Transp., Inc., v.
Trans Magic Airlines Corp., 96 Idaho 110, 112-13,524 P.2d 1338, 1340-41 (1974). Idao Code
§ 61-629 defies the scope of the Supreme Cour's limited review and states in relevant par:
The review on appeal shall not be extended fuer th to
determe whether the commission has regularly pursued its
authority, including a determnation of whether the order appealed
from violates any right of the appellant under the Constitution of
the United States or of the stte of Idaho.
See also Rosebud Enterprises, Inc., 128 Idaho at 618,917 P.2d at 775; A. w: Brown Co., Inc., v.
Idaho Power Co., 121 Idao 812, 815, 828 P.2d 841,844 (1992).
In 2000, the Supreme Cour recited the review stadads and degree of deference that
must be given to decisions of the Commssion. In Industrial Customers, the Cour stated that
review of Commission determinations as to "questions of law" is limited to determnig whether
the Commssion has regularly pursued its authority and whether the constitutiona rights of the
appellant have been violated. Industrial Customers, 134 Idao at 288, 1 P.3d at 789. Regarding
"questions of fact," the Cour stated that where the Commssion's fidings are supported by
substantial, competent evidence in the record, the Cour must afrm those fidigs and the
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Commission's decision. Id.; Hulet v. Idaho Public Utilties Comm 'n, 138 Idao 476, 65 P.3d
498 (2003); Rosebud Enterprises v. Idaho PUC, 128 Idaho 624, 631, 917 P.2d 781,788 (1996).
See also A. W Brown, 121 Idaho at 815-16, 828 P.2d at 844-45 and Empire Lumber Co. v.
Washington Water Power, 114 Idaho 191, 193, 755 P.2d 1229, 1231 (1987), cert. denied, 488
U.S. 892, 109 S.Ct. 228, 102 L.Ed.2d 218 (1988).
In Industrial Customers, ths Cour described the appropriate test for substatial
competent evidence as follows:
The "substantial evidence rule" is said to be a "middle position"
which precludes a de novo hearg but nonetheless requies a
serious review which goes beyond the mere ascertainent of
procedural regularty. Such a review requies more th a mere
"scintila" of evidence in support of the agency's determation,
though "somethg less than the weight of the evidence." "Put
simply", we wrote, ''te substtial evidence rue requies a cour
to determine 'whether (the commssion's) findings of fact are
reasonable. ",
Industrial Customers, 134 Idao at 293, 1 P.3d at 794 quoting Idaho State Ins. Fund v. Hunicutt,
110 Idaho 257, 260, 715 P .2d 927, 930 (1985) (citations omitted).
It has been held by ths Cour that because Commssion proceedings raise extmely
complicated technical issues withn the Commssion's area of expertse, the Cour shall apply the
substatial evidence standard reflecting the policy that the Cour's purose on review is not to
displace the Commssion's choice with its own, even if the cour justifiably could have made a
diferent choice had the matter been before it de novo. Rosebud Enterprises, Inc., 128 Idao at
618,917 P.2d at 785 Hayden Pines Water Co. v. IPUC, 111 Idaho 331, 336, 723 P.2d 875, 880
(1986).
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The "Commission as the fider of fact, need not weigh and balance the evidence
presented to it, but is free to accept certain evidence and disregard other evidence." Industrial
Customers, 134 Idaho at 293, 1 P.3d at 794. "The commission is free to rely on its own expertise
as justification for its decision." . Id. Simply put, findings of the Commssion must be reasonable
"when viewed in the light that the record in its entirety fuishes, includig the body of evidence
opposed to the (Commission's) view." Hayden Pines, 111 Idao at 336, 723 P.2d at 880,
quoting Hunicutt, 110 Idaho at 261, 715 P.2d at 931 (1985). The Commission's fidings of fact
are to be sustained unless it appears that the clear weight of the evidence is agaist its
conclusions or that the evidence is strong and persuaive that the Commission abused its
discretion. Industrial Customers, 134 Idaho at 288, 1 P.3d at 789; Utah-Idaho Sugar Co. v.
Intermountain Gas Co., 100 Idao 368, 376,597 P.2d 1058, 1066 (1979).
The Commssion's findings need not take any parcular form so long as they faily
disclose the basic facts upon which the Commssion relies and support the ultimate conclusions.
Wht is essential are sufcient findigs to permit the reviewing Cour to determe that the
Commssion ha not acted arbitrarly. Rosebud Enterprises, Inc., 128 Idao at 624,917 P.2d at
781 Boise Water Corp. v. Idaho Public Util. Comm 'n, 97 Idaho 832, 840, 555 P.2d 163, 171
(1976); Washington Water Power Company, 101 Idaho at 575,617 P.2d at 1250.
As demonstrated below, the Commssion's determation in the present matter is amply
supported by competent and substatial evidence, and the Commission clearly did not abuse its
discretion in rendering its decision in ths matter.
RESPONDENT IDAHO POWER COMPAN'S BRIF - 13
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Á. Gl"owth-Related Line Extension Investments Incl"ease Rates to Customel" Not
SeI"ed By the Line Extensions.
The Company makes many investments for new customers for the numerous pars of its
system that comprise its electrc service, and the fact is that Idaho Power's investment per
customer is increasing. There are two principal drivers that effect growt in rates over time: (1)
infation and (2) growt-related costs. _ At the tie of the Application, Idaho Power's revenue
requirement in base rates over the prior five years had increased by 21 percent and outpaced pure
infation largely due to customer growt, demonstratig that growt is not paying for itself. R.
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VoL. II, p. 391. Other than the Rule H lie extension taff, no means of assessing the
distrbution costs of serving new customers directly to those specific customers exists.
Since Idaho Power's line extension allowances were last updated in 1997, Idao Power
! requested general rate increases in 2003,2005,2007, and 2008 to align the Company's revenues
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with its cost to provide electrc service. Tr. VoL. II, p. 101, LL. 1-3. Idao Power also sought
rate increases in 2005 and 2008 to collect the cost of gas-fired generation plants built to meet
customer energy demands. Id at LL. 3-6. Company witness Greg Said concluded that these
increases have been related to growt because "additional revenues generated from the addition
I.J of new customers and load growt in general is not keeping pace with the additional expenses
created and required to provide ongoing safe and reliable servce to new and existig customers."
Id. at LL. 9-13. Growt in generation plant investment, transmission plant investment, and
distrbution plant investment were all impacting the growt in electrc rates.
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For many years of Idaho Power's existence, it was in a surlus generation and surlus
tranmission sitution. R. VoL. II, p. 289. Under those conditions, the addition of new customer
loads required no new generation costs and no new transmission costs, only new distribution
costs. As a result, the Company and the Commission could be promotional (i.e., providig
greater allowances) with regard to its line installation provisions. Costs per customer may
actully have been declinng at times even with generous allowances. Id.
Today's situation is not comparable to those times. Idaho Power is both generation and
transmission constrained. Customers are experiencing the ful incrementa impact of adding new
generation and tranmission facilities to the Company's system. Id. As growt occurs, new
plant costs in addition to normal replacement costs add to the impact of infation experienced by
customers. As a matter of good regulatory policy, now is not the time to continue promotional
line instalation activity to serve each individual applicant at the expense of existing customers.
Charges for non-recurng costs of line extnsions must recover all of the Company's investment
¡ related specifically to the customer class that causes the investment to be made.
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B. The Commission Regularly Pursued Its Authority to Set Line Extension Allowances
Based on the Cost of Standard Equipment to New Customers.
The statutory framework within which the Commssion is authoried to set rates is found
in Title 61, Chapters 3 and 5 of the Idaho Code. Idaho Code § 62-502 provides, in pertinent par:
DETERMINATION OF RATES. Whenever the commssion, afer
a hearing . . . shall fid that the rates . . . (or) charges or
classifications . . . collected by any public utility for any service or
product or commodity . . . are unjust, uneasonable, discriatory
or preferential, or in any wise in violation of any provision of law,
or that such rates . . . (or) charges or classifications are insufcient,
the commission shall determe the just, reasonable or sufcient
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rates . . . ( or) charges, classifications, rues, reguations, practices
or contracts to be thereafter observed and in force and shall fix the
same by order as hereinafer provided, ard shall,. under such rues
and regulations as the commssion may prescribe, fix the
reasonable maximum rates to be charged for water by any public
utility coming within the provisions of ths act relating to the sale
of water.
Idaho Code § 61-503 provides:
POWER TO INSTIGATE AN FIX RATES AN
REGULATIONS. The commssion shall have power, upon a
hearng . . . to investigate a single rate . . . charge, (or)
classification. . . of any public utility, and to establish new rates
. . . chages, (or) classifications. . . in lieu thereof.
Finally, Idao Code §61-315 provides:
DISCRIMINATION AND PREFERECE PROHffITED. No
public utility shall, as to rates, chages, servce, facilties or in any
other respect, make or grant any preference or advantage to any
corporation or person or subject any corporation or person to any
prejudice or disadvantage. No public utilty shall establish or
maita any uneasonable difference as to rates, charges, servce,
facilities or in any other respect, either as between localities or as
between classes of service. The commssion shall have the power
to determne any question of fact arsing under ths section.
The Homebuilders' Cour recognid that costs incured to serve a specific customer or
group of customers, such as line extension costs, may be recovered from those customers. The
Cour held:
The instat case presents no factors such as when a nonrecurng
charge is imposed upon new customers because the service they
require demands an extension. of existing distrbution or
communcation lines and a charge is imposed to offset the cost of
the utility's capital investment.
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Homebuilders, 107 Idaho at 421,690 P.2d at 350 (emphasis added). Because the costs incured
by the Company are specific to the extension of distribution lines to the new customers directly
benefiting from them, the Commission does not need to justify the difference in new customer
Company investment based upon the factors enumerated in Homebuilders (e.g., cost of servce,
quatity of electrcity used, differences in conditions of service or the time, natue or pattern of
use) as suggested by the BCA. Utilities are permtted to recover line extension charges tht will
offset the actul per-customer cost of physically connecting to Idao Power's distrbution
system. As the Commission made clear, it "is addressing distribution costs and not resource
costs. We are setting line extension charges based on the costs of stdard terminal facilities that
will be used to serve only the customer who is charged." Order No. 30955, p. 22; R. VoL. IV, p.
669. As such, the intant case is distinguishable from hook-up fees designed to recover the costs
of water supply resources at issue in the Boise Water case relied upon by the BCA. Boise Water
Corp. v. Public Utilties Comm'n, 128 Idaho 534, 916 P.2d 1259 (1996).
1. Allowances Reflecting the Cost of Line Extension Facilties Do Not
Discriminate Against New Customers.
The allowances approved by the Commssion in Order No. 30955 reflect the actu cost
of stadard termal facilities necessar to serve that customer. R. VoL. IV, pp. 668 and 670. To
the extent that Order No. 30955 requires a new customer payment greater than that made to serve
existing cusomers in 1997, it correctly reflects the increased payment in distrbution facilities
necessary in 2009 to serve new customers. Reguation does not exist in a vacuum. Commission
policies can (and do) change as conditions change. Ths Cour has recognzed that "so long as
the Commssion enters sufcient findigs to show that its action is not arbitrar and capricious,
RESPONDENT IDAHO POWER COMPANY'S BRIF - 17
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the Commission can later alter its decisions." Washington Water Power Co., 101 Idaho at 579,
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617 P.2d at 1254.
In light of the Company's increased investments to serve new customers on its system as
a whole that will be paid for by the entire rate paying public, it is reasonable and prudent for the
Commission to require that specific line extension connection costs be substantially or fully
fuded by the individua customers causing them. "Not all differences in a utility's rates and
charges as between different classes of customers constitute unawf discrimination or
j preference under the strictues of Idaho Code § 61-315." Homebuilders, 107 Idao at 420,690
. .J P.2d 350. So long as all potential new customers/applicants are treated in a like maner as a
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inlation allowances of new applicants must be compared to those of existig customers (who
mayor may not have been required to pay for new distrbution facilities) does not make sense
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J because these groups are not similarly sitlted. Tr. VoL. II, p. 294. In addition, having
i developers/applicants more fuly fud line extensions also reduces ratepayer exposure toJ
speculative development, at a time when the Company had installed primar (backbone) line and
transformers to more than 20,000 lots without new customers takg service. Id, p. 280.
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2.Allowances Set in Order No. 30955 Do Not Discriminate Between New
Customers Located Inside and Outside Subdivisions.
Regardless of whether constrction is inside or outside of a subdivided development, the
line extension taff approved in Order No. 30995 requires the Company to provide customers
and developers a fixed allowance equal to the Company's investment toward their required
J term facilties. R. VoL. IV, p. 668. Customers are eligible to receive maxum allowances
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amounts for each transformer intaled withn a development. These allowances are based on the
cost of stadard equipment - not the number of customers or lots served, which would cause a
widfall to developers. Id In no instace. will allowances exceed the cost of the facilties
provided. R. VoL. III, p. 599.
F or residential customers connectig load, the allowance generally covers the ful cost of
the service connection resulting in no cost to the customer. Tr. VoL. II, p.267. The $1,780
allowance approved by Order No. 30955 was based upon the curent intalation cost of Stadad
Termnal Facilities for single phase service. Id., p. 266. Stadard Termal Facilities costs
include the costs associated with providing and installing one overhead servce conductor and
one 25 kVa transformer to serve a 200 amperage meter base. Id., p. 267. The only cost
difference between customers is that those inside residential subdivisions pay an underground
wie installation charge equa to the differential between overhead servce and underground
service. Id., p. 268. However, if customers request underground service attchments outside of
subdivisions, they are also requied to pay the same underground wire instalation charge. In
both cases, most customers receive the equivalent of overhead servce attchments without any
personal investment because the allowance (credit) provided by the Company (investment)
covers the entire cost of the requied servce.
Customers requesting servces beyond the "standad" or most commonly insled
facilities are requied to pay all costs above the provided allowance as a contrbution in aid of
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constrction. R. VoL. III, p. 600. If the customer wants underground service, or if the customer
is building a large home that requires larger than standard transformation, or if the customer is
some distance from existing facilities, that customer is responsible for the additional costs of
providing service. As a result, customers are treated and charged equitably based on a stadard
overhead service, thereby mitigating intra-class and cross-class subsidies. Id.
a.All Customers and Developers Receive the Same Standard Terminal
Facilties Allowance.
Contrar to the Building Contractors' claims, customers outside of subdivisions are not
eligible to receive a greater allowance than those inside subdivisions. Instead, all customers
receive allowances for line installations and service connections requiring termal facilities up
to the equivalent of the cost of stadard overhead terminal facilities only - regardless of whether
the connection is inside or outside a subdivision. Order No. 30955, p. 21; R. VoL. iv, p. 668.
I Consequently, subdivision developers with lots that share a transformer will receive a pro rata
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share of the transformer allowance. If Idaho Power paid allowances based on lots rather than
transformers as the BCA suggests, the Company and its rate paying customers would be forced
to give developers a standard termnal facilties allowance greater th Idaho Power's actu
costs to provide the facilities. ¡d. These excess payments would then have to be fuded by
increasing rates to all other customers.
Developers of subdivisions (businesses that do not tae electrc service) receive
Company-fuded allowances of $1,780 for each single phase tranformer installed withn a
development and $3,803 for each thee phase transformer instaled withn a development to help
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.1 offset their development costs. Here, developers are paying for and installing a porton4 of
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potential futue customers' terminal facilities above the Company's investment as par of a
business ventue; they are not the ultimate customers of Idaho Power. Allowances (Company
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investment) are credited directly to developers' work orders as a reduced cost of electrc
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facilities. Developers mayor may not reduce home prices to pass these cost savings on to home
buyers (futue rate paying customers).
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between service connections withi the same customer class. R. VoL. II, p. 388. Recogntion of
ths is demonstrated in the level of allowances provided under the line extension taff prior to
J December 1, 2009. For some customer classes, the Company was requied to pay an "open-
ended" level of allowance equal to overhead termal facilities requirements without regard to
the size and tye of terminal facilities required. Id. This resulted in customers (with the same
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on a fixed or flat amount and some were based on an "open-ended" amount equaing the tota
cost or a percentage of the tota cost of overhead terminal facilties. Id. The allowances
approved in Order No. 30955 do not depar from existing policy nor do they have a
discriinatory effect on customers because similarly situated customers are treated the same
under the taff.
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4 Service conductor and meters are not installed within subdivisions until later when homes are actually
constrcted and customer load occurs. Tr. VoL. IT, p. 276.
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b. Line Extension Cost Recovery Does Not Create "Excess Revenue."
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On page 12 of its Appellant's Brief, the BCA asks what becomes of "excess revenue"
when the terminal facilities allowance credited to new customers falls below its embedded cost.
This question implies that when developers receive allowances in an amount equal to the
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Company's actual cost to provide those terminal facilities, a negative investment and fiancial
windfall for the Company are somehow created at the expense of developers. Ths is simply not
tre. The Company either makes an investment on behalf of customers or it does not; if made,
the Company is only allowed to earn a retu on the investment it makes and does not receive
"excess revenues." R. VoL. II, p. 389. At no time would the Company "recover though rates
more than it invested in the distrbution facilities servg the new customer." Appellant's Brief,
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p.12.
However, recovery of investment-related expenses should not be confsed with
\ij Contrbutions In Aid of Constrction ("CIAC") (e.g., work order expenses paid by customers in
excess of allowances) which offset rate base. Tr. VoL. II, p. 283. Idaho Power does not ear a
retu on any payments in excess of the allowances because customer CIACs directly offset
Idao Power's distibution investment (i.e., cost of service) and thus reduce rate base growt.
CIACs also reduce the responsibilty of existig customers to pay for distrbution facilties that
do not serve them. This relieves upward rate pressure for the distrbution component of rate
base, even if other cost components continue to increase beyond cost amounts curently
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c.Building Contractors' Proposed Alternative to Order No. 30853 Is
Flawed.
1./The Building Contractors' proposal as described by Dr. Slaughter's testimony would
provide an upfront allowance to developers (not customers) of residential subdivisions equa to
$1,232 per lot/customer with the subdivision. Id., p. 234. Dr. Slaughter compa res ths
1 embedded cost number to the Commssion-ordered allowance with residential subdivisions of
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$1,780 per installed transformer.5 ThisIs not a valid comparson for several reasons.
First, the Building Contractors' $1,232 per lot allowance with a residential subdivision
is based upon historical investments that the Company has made on behalf of customers
("embedded costs"). Those computations include embedded costs related to investments the
Company has made in substations, priar lines, seconda lines, transformers, servces, and
meters that have been allocated to the residential class in rate proceedigs. ¡d., p. 274.
The Building Contractors' proposed $1,232 per lot allowance greatly exceeds the costs
found in most residential subdivision work orders, which tyically include only a primar line
j (or backbone), a number of tranformers, and secondar line to individual lots. There are no
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costs associated with substations, services, or meters in residential subdivision work orders, yet
these costs are included in the $1,232 amount. ¡d., p. 276. Servce conductor and meters are not
installed withn subdivisions until later when homes are actually constrcted and customer load
occurs. Thus, the Building Contractors' proposal would provide allowances to a developer for
costs that are not incured or included in the developer's work order to constrct facilities
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5 Even on a per trsformer basis, the Commission-approved allowance of $1,780 is more generous than
Idaho Power's embedded net plant investment in transformers, which is $1,533 per residential transformer. Tr. Vol.
II, p. 279.
RESPONDENT IDAHO POWER COMPAN'S BRIF - 23
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proposal is also inconsistent with the Company's treatment of other customer classes, where only
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transformers, service conductor, and meters (not primary or secondar lines) are considered for
allowances. Id., p. 277.
It should also be noted that the Building Contractors' proposed per lot allowance of
$1,232 included the costs of both primar and secondar transformers that receive allocation to
residential class in general rate case proceedigs. New residential requests under the line
extension taff provisions rarely, if ever, include primar transformers. Id., pp. 277-78.
Second, per Order No. 30955, residential customers outside of subdivisions receive
allowances based solely on standad terminal facilities. They receive no allowances for the costs
of substations, primar lines, or secondar lines. The Buildig Contractors' proposal would
offer an unawfl preference to developers by offering a more generous allowance for
speculative lots inside a residential subdivision based on facilities that are not considered for
alowances to actual new residential customers outside of subdivisions. Id.,p. 276.
Thrd, because tranformers often serve more than one ultimate customer, offerig
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i¡ the uneasonable result that the allowance is greater than the cost of terminal facilties (in ths
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case tranformers) requied to provide service. Tr. VoL. II, pp. 276-77; R. VoL. IV, p. 668. If
greater allowances are given to developers, all other customers will pay higher rates to fud
those allowances. By contras, if additional residential customers request servce that can be met
by an existing trasformer, under Order No. 30955, those customers only receive a termal
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facilities allowance reflective of service conductor and meterig because the tranformer is
already there. Tr. VoL. II, pp. 281-282.; R. VoL. iv, p. 668.
C. The Commission Did Not Abuse Its Discretion When It Denied the BCA Intervenor
Funding.
The Commssion is authorized to award intervenor fuding pursuant to Idao Code § 61-
617 A, and the Supreme Cour reviews such awards using an abuse of discretion stadad. Idaho
Fair Share v. Idaho Public Utilties Comm 'n, 113 Idaho 959, 751 P.2d 107 (Idaho), rev'd on
other grounds; JR. Simplot Co., Inc., v. Idaho State Tax Comm 'n, 120 Idao 849, 862, 820P.2d
1206, 1219 (1991). "The wording of LC. § 61-617A makes it evident that the Commssion is
vested with the discretion to award attorney's fees and costs . . ., The decision of the
adjudicating body awarding fees wil not be overted absent an abuse of discretion." Id. at 963,
751 P.2d at 111.
Generally speakng, Idao Power does not take a position on intervenor fudig requests.
The Commission is the appropriate par to determine whether "the parcipation of the
intervenor has materially contrbuted to the decision rendered by the commssion" as requied by
Idaho Code § 61-617A(2)(a). Once an intervenor fuding award is made, Idaho Code § 61-
617 A(3) directs that "expenses awarded to qualifyng intervenors shall be an allowable business
expense" in the utility's pending or next rate case.
If intervenor fuding were to be awarded to the BCA in ths instace, it is unclear which
ratepayers would pay the intervention expenses. Idaho Code § 61-617 A(3) requires that
"expenses awarded shall be chargeable to the class of customers represented by the quaifyg
intervenors." It is not readily apparent which class the BCA represented, or which class
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¡ benefitted from their paricipation. Developers do not take power service and do not belong to a
customer class. If the BCA is successfu and larger allowances are instituted at the BCA's
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urging, customers will argubly not benefit by paying the higher rates necessar to fud them.
Although the costs could theoreticaly be assigned generally to all customer classes, it would be
inappropriate. for customers to pay these expenses if they do not take service at the distrbution
level as required under Rule H (e.g., priar or transmission level customers, such as large
commercial or industrial customers).
D.The DCA Is Not Entitled to Attorney Fees and Costs on AppeaL.
1. Idaho Code § 12-117 Is Preempted By Another Statute.
By its own terms, Idaho Code § 12-117 as amended effective May 31, 2009, does not
apply to ths case because another statute controls. Idao Code § 12-117(1) reads:
(1) Unless otherwse provided by statute, in any adminstrative
proceeding or civil judicial proceeding involvig as adverse pares
a state agency or political subdivision and a person, the state
agency or political subdivision or the cour, as the case may be,
shall award the prevailing par reasonable attorney's fees, witness
fees and other reasonable expenses, if it fids tht the
nonprevailing par acted without a reasonable basis in fact or law.
(Emphasis added.)
The wordig of Idao Code § 61-617A(2) evidences the Idaho Legislatue's intent6 to make the
stadard set fort in Idaho Code § 61-617 A the basis for an attorney fee award in matters before
6 This Cour determined that the award of attorney fees in Idao is dependent upon a statute or rule of the
Cour permitting the awarding of such fees and that the Commission did not have authority to award them in the
absence of that authority. Idaho Power Co. v. Idaho Public Utilties Comm 'n, 102 Idaho 744,639 P.2d 442 (1981).
In response to the Cour's decision, the Idaho Legislatue enacted Idao Code § 61-617 A authorig the
Commission to award intervenor fudig to customers materially contrbutig to the Commission's decision. S.L.
1985, ch. 126, § 1.
RESPONDENT IDAHO POWER COMPAN'S BRIF - 26
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the Commission. The Commission is vested with the discretion to award attorney's fees and
costs under very specific circumstances:
(2) The commssion may order any reguated electrc, gas,water or telephone utility with gross Idaho intraste anual
revenues exceeding thee millon five hundred thousand dollars
($3,500,000) to pay all or a portion of the costs of one (1) or more
paries for legal fees, witness fees, and reproduction costs, not to
exceed a total for all intervening pares combined of fort
thousand dollars ($40,000) in any proceeding before the
commission. The determination of the commission with regard to
the payment of these expenses shall be based on the following
considerations:
(a) A finding that the paricipation of the intervenor has
materially contrbuted to the decision rendered by the
commssion; and
(b) A findig that the costs of intervention are
reasonable in amount and would be a signficant fiancial
hardship for the intervenor; and
(c) The recommendation made by the intervenor
differed materially from the testimony and exhbits of the
commission staf; and
(d) The testimony and parcipation of the intervenor
addressed issues of concern to the general body of users or
consumers.
This Cour has previously found that the decision of the adjudicating body awarding fees
will not be overted absent an abuse of discretion. Hellar v. Cenarrusa, 106 Idao 571, 682
P.2d 524 (1984) (reviewing an award of fees under Idao Code § 12-121). In ths case, the
Commssion explaied its rationale; the BCA's arguments did not materially contrbute to its
fi decision in the case because it presented the same arguent it did in the prior 1995 case and
the BCA's advocacy did not address issues of concern to "the general body of users or
RESPONDENT IDAHO POWER COMPAN'S BRIF - 27
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consumers" as required by Idaho Code § 61-617A(2)(b) and (d). R. VoL. iv, p. 673.
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Consequently, the Commssion canot be said to have acted uneasonably or without foundation
with regard to its review of attorney fees and costs under Idaho Code § 61-617 A (or Idaho Code
§ 12-117, assumng the latter statute applied).
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2.Even if Idaho Code § 12-117 is Not Preempted, It Does Not Apply to
Legislative Agencies like the Commission.
As noted by ACHD, Idaho Code § 12-117 does not form a basis for an award of attorney
fees in ths instace. Idaho Code § 12-117 allows for an award of attorney fees to persons who
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67-5201 for definition of a "state agency" which is subject to the attorney fee provision. Idaho
Code § 67-5201 specifically excludes from the definition of "state agency" agencies of the
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a legislative agency not falling withn the defition of a "state agency" as defied by Idaho Code
§ 67-5201. Owner-Operator Independent Drivers Ass 'n, Inc., v. Idaho Public Utilities Comm 'n,
J 125 Idaho 401,871 P.2d 818 (1994) citing A. W Brown Co., Inc., v. Idaho Power Co., 121 Idaho
812,819,828 P.2d 841,848 (1992).
3.The Instant Case Does Not Satisfy the Requirements of the Private Attorney
General Exception to the American Rule on Attorney Fees.l
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The private attorney general doctre does not form a basis for an award of attorney fees
in ths case. The private attorney general doctre was developed to allow for an award of
attorney fees when an action meets thee specific requiements: (1) great strengt or societa
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importance of the public policy indicated by the litigation, (2) the necessity for private
RESPONDENT IDAHO POWER COMPAN'S BRIF - 28
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enforcement and the magnitude of the resultant burden on the plaitiff, and (3) the number of
people stading to benefit from the decision. Hellar, 106 Idao at 578, 682 P.2d at.531 (1984).
Much like the Cour found in the Owner-Operator Independent Drivers Ass'n case regarding
interstate motor carer registrtion renewal" fees, the BCA's action alleging the Commssion
authorized insufcient stadard terminal facilities allowances lacks sufcient societa
importance or number of people stading to benefit to justify an award of attorney fees under this
theory. If the BCA were to succeed on appeal, rates for electric servce would increase - not
decrease - for main body of the Company's customers.
v. CONCLUSION
The Commssion regularly pursued its reguatory authority under Title 61 of the Idaho
Code to determe how Idaho Power may charge for costs it incurs for distrbution line
extensions to new customers. The Commssion's Orders authorig lie instalation allowances
are based on substantial and competent evidence - the actu cost to the utility of providing
stadad equipment to connect new customers to its distrbution system. The Commssion set
allowances consistent with the legal parameters set fort in the Homebuilders case by offerig--j
"" J the same allowance amount for the same standard equipment necessar to connect that specifc
_I customer to Idaho Power's system. Therefore, Idaho Power respectfuly requests that Order No.
30955 in Case No. IPC-E-08-22 be affirmed. Idaho Code § 61-629.
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Respectflly submitted ths 16th day of July 2010.~.ulj.~
LISA D. NORDS OM
Attorney for Respondent Idaho Power Company
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on ths 16th day of July 2010 I served a true and correct copy
of RESPONDENT IDAHO POWER COMPANY'S BRIEF upon the followig naed paries by
the method indicated below, and addressed to the followig:
Idaho Public Utilties Commission
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
-XHand Delivered
U.S. Mail
_ Overnght Mail
FAX
-X Email jean.iewelllflJUc.idaho.gov
Kristine A. Sasser
Weldon B. Stutzan
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-XHand Delivered
U.S. Mail
_ Overnght Mail
FAX
-X Email krs.sasserlfpuc.idaho.gov
weldon.stutzmanßYuc.idaho.gov
Building Contractors Association of
Southwestern Idaho
Michael C. Creamer
Michael P. Lawrence
GIVENS PURSLEY, LLP
601 West Banock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Hand Delivered
-XU.S. Mail
_ Overnght Mail
FAX
-X Email mcclfgivenspursley.com
michaellawrencelfgivenspursley.com
Ada County Highway Distrit
Merlyn W. Clark
D. John Ashby
HAWLEY TROXELL ENNIS &
HAWLEY,LLP
877 Mai Street, Suite 1000
P.O. Box 1617
Boise, Idaho 83701-1617
Hand Delivered
-XU.S. Mail
_ Overnght Mail
FAX
-X Email mclarkCßawleytoxell.com
jashbylfhawleytoxell.com
u~!fl~
RESPONDENT IDAHO POWER COMPAN'S BRIF - 30