20040920_950.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL STAFF
FROM:SCOTT WOODBURY
DATE:SEPTEMBER 16, 2004
RE:CASE NO. P AC-04-4 (pacifiCorp)
ELECTRIC SERVICE REGULATION 12-LlNE EXTENSIONS
APPLICANT -BUlL T LINE EXTENSIONS
On July 16, 2004, PacifiCorp submitted for Commission approval proposed tariff
pages associated with its Electric Service Regulation No. 12 rule which pertains to Line
Extensions. The purpose of the filing is to add clarifying language to Regulation 12 provisions
regarding availability of the Applicant-Built Line option.
The proposed revision to Regulation 12 Section 5(a), Applicant-Built Line Extensions
adds language to explicitly state that the applicant-built option only applies to new construction
and is not available for "relocations conversions from overhead to underground, going from
single-phase to three-phase or increasing the capacity of facilities." PacifiCorp contends that the
proposed clarification reflects the Company s long-standing practice. In conjunction with the
foregoing change the Company is also proposing to add clarifying language to the definition of
an "Extension" as set forth in Regulation 12 Section 1 (d), excluding circumstances where a line
has been removed, at customer request, within the prior five years. Finally, the Company
proposes a change to Regulation 12 Section 1 (c), Engineering Costs, clarifying that "large
complex or speculative" extensions are to be defined from the sole perspective (or judgment) of
the Company. The purpose of this change is to avoid disputes between the Company and the
customer as to whether a development is "large, complex or speculative.
On July 30, 2004, the Commission issued a Notice of Application and Modified
Procedure in Case No. P AC-04-4. The deadline for filing written comments was August 27
DECISION MEMORANDUM
2004. The Commission Staff was the only party to file comments. Staff recommends that
PacifiCorp s proposed changes to electric service Regulation No. 12 be approved as filed.
Staff s Comments can be summarized as follows:
A vailability of the Applicant-Built Line Option
The purpose of the Company-proposed changes to Rule 12 ~ 5(a)1 and Rule 12
~ 1 (d), Staff contends, is to more clearly distinguish rules as they apply to new line extensions as
opposed to relocations or alterations of existing lines. Staff believes that the proposed changes
accurately reflect the manner in which PacifiCorp has interpreted and applied the rules in the
past. Staff also believes the Company s interpretation of the rules is reasonable and that the
proposed language changes make this interpretation clear.
As set forth in Staff comments, Staff notes as follows:
In response to a Staff production request asking why PacifiCorp restricts
the applicant built line extension option to only new line extensions, the
Company cites safety and liability concerns. PacifiCorp points out that
working within proximity of energized power lines is a clear safety risk.
The Company contends that hand digging is required within 2 feet of an
insulated buried line, and that Idaho s overhead line safety act limits
contractors from working within 10 feet of a standard distribution line.
PacifiCorp admits that not all relocations require such work, but notes that
many do. The Company believes that the safety risk and potential for
liability resulting from electrical contact that could occur by qualified or
non-qualified individuals who are working under the direction of an
applicant is higher for relocations and alterations simply by virtue of the
fact that more of that work would be in closer proximity to energized
facilities than is the case with construction of new line extensions.
PacifiCorp also cites the potential for claims against the Company due to
failure to pr~vide service to other customers on the line during
construction. At a minimum, in addition to connecting the new line to the
grid, relocations or alterations have the additional requirement of de-
energizing the old line, switching load and removing the old line. This
additional work requires additional coordination and greater exposure to
problems according to the Company.
Staff believes that Pacifi Corp s long standing practice of restricting the applicant built
option to only new line extensions is based on sound reasoning. Staff contends that safety should
be kept paramount and understands the liability concerns of the Company.
DECISION MEMORANDUM
Responsibility for Engineering Charges-Large, Complex or Speculative" Development
PacifiCorp has informed Staff that on occasion, customers have disputed payment of
engineering charges for developments that are "large, complex or speculative." PacifiCorp
rules do not require that engineering charges be advanced when developments are not judged to
be large, complex or speculative. The dispute generally boils down to differences of opinion
between the customer and the Company as to whether the proposed development is, in fact
large, complex or speculative. The proposed tariff change to Regulation 12 ~ 1 (c) will permit the
Company to use its own judgment in deciding whether the "large complex or speculative
standard is met.
Staff believes it would be very difficult to define in the tariff precisely what
constitutes "large, complex or speculative." Furthermore, Staff believes a precise definition is
unnecessary. Each line extension is unique, and the possible circumstances associated with each
one would make it nearly impossible to develop tariff language where virtually no judgment
needed to be exercised. Staff believes this is one instance wherein the Company should be
allowed to exercise its judgment. Staff believes the language proposed by the Company is
acceptable.
COMMISSION DECISION
PacifiCorp proposes to add clarifying language to its electric servIce Regulation
No. 12 Line Extension Rules as pertains to applicant-built line extensions and payment
responsibility for engineering charges for "large, complex or speculative" developments. Staff
recommends that the Company-proposed changes be approved. Does the Commission find the
proposed changes reasonable and acceptable?
Scott Woodbury
VldIM:P ACEO404 sw
DECISION MEMORANDUM