20050712_1258.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:KIRA DALE PFISTERER
DATE:JUL Y 7, 2005
RE:JOINT APPLICATION OF IDAHO FALLS POWER AND P ACIFICORP
APPROVE AN ELECTRIC CONSUMER ALLOCATION AGREEMENT,
CASE NO. PAC-05-
On June 20, 2005, Idaho Falls Power and PacifiCorp dba Utah Power & Light Company
(PacifiCorp) filed a Joint Application seeking the Commission s approval of an electric consumer
allocation agreement between the parties (Agreement). The Agreement is submitted for the
Commission s review pursuant to the provisions of the Electric Suppliers Stabilization Act (ESSA).
Idaho Code 9 61-332 et seq. The Agreement is dated May 27, 2005.
THE AGREEMENT
Idaho Falls Power is the electric department of the City of Idaho Falls, a municipal
corporation duly organized under the laws of the State of Idaho. Idaho Falls Power serves over
000 electric consumers, primarily within the municipal boundaries of the City. However, Idaho
Falls Power also provides electric service to some consumers outside the municipal boundaries of the
City. PacifiCorp is a public utility providing electric service to over 000 consumers in eastern
Idaho, including the area immediately surrounding Idaho Falls. However, PacifiCorp provides
electric service to some consumers within the municipal boundaries of the City.
To reduce duplication of service and promote stability in the respective service areas
Idaho Falls Power and PacifiCorp propose to define their service areas and provide for circumstances
under which an existing customer may seek to change suppliers. Under the Agreement, Idaho Falls
Power will continue to serve existing customers outside the City and PacifiCorp will continue to
serve existing customers within the City. However, PacifiCorp will not provide electric service to a
new service entrance within the municipal boundaries of the City, and the City will not provide
electric service to a new service entrance outside its municipal boundaries.
DECISION MEMORANDUM
The Agreement also addresses potential requests from customers desiring to change
electric service providers pursuant to the Agreement. Specifically, in the event the City annexes
property owned by a PacifiCorp customer, the City may provide electric service to such a customer
provided that (1) the customer makes a written request to the City for electric service; and (2) the
City pays PacifiCorp just compensation as determined under the Agreement. Pursuant to the
Agreement, in order to provide just compensation, the acquiring utility shall: (1) pay the other
utility an amount equal to 167% of the exchanging customer s total electric bills from the previous
months; and (2) purchase all poles, wires, cross arms, insulators, guys, and other facilities provided
that these facilities are no longer needed by the other utility and are necessary to provide new service.
See Idaho Code 961-333B. If this standard for just compensation cannot be reasonably applied, the
parties agree to negotiate in good faith to determine other just compensation.
THE ESSA
The ESSA allows electric suppliers to contract with one another for the purpose of
allocating territories, consumers, and future consumers; however, all such contracts must be filed
with the Commission for approval. Idaho Code 9 61-333. The Commission shall approve such
contracts only upon finding that the allocation or transfer is consistent with the purposes of the ESSA.
The purposes of the ESSA are: (1) promote harmony among and between electric suppliers; (2)
prohibit the "pirating" of consumers; (3) discourage the duplication of electric facilities; (4) actively
supervise the conduct of electric suppliers; and (5) stabilize the territories and consumers served with
electricity by such electric suppliers. Idaho Code 9 61-332(2). Pursuant to the ESSA, the
Commission has authority to approve or reject a contract between a municipality and a public utility.
However, the Commission has jurisdiction only over the public utility in such a proceeding. Idaho
Code 9 61-333.
ST AFF RECOMMENDATION
Staff recommends that the Joint Application be processed under Modified Procedure.
COMMISSION DECISION
Does the Commission wish to process the Joint Application of Idaho Falls Power and
PacifiCorp under Modified Procedure?
/&~(().
Kira Dale P terer
M:PACEO507 kdp
DECISION MEMORANDUM