Bldg. Contractors Ass'n of Sw. Idaho v. Idaho Pub. Utilities Comm'n

• Decision Date: 25 May 2011
• Docket Number: No. 37293–2010.,37293–2010.
• Court: Idaho Supreme Court
• Parties: The BUILDING CONTRACTORS ASSOCIATION OF SOUTHWESTERN IDAHO, Appellant, v. IDAHO PUBLIC UTILITIES COMMISSION and Idaho Power Company, Respondents.

151 Idaho 10

253 P.3d 684

The BUILDING CONTRACTORS ASSOCIATION OF SOUTHWESTERN IDAHO, Appellant,

v.IDAHO PUBLIC UTILITIES COMMISSION and Idaho Power Company, Respondents.

No. 37293–2010.

Supreme Court of Idaho, Boise, April 2011 Term.

May 25, 2011.

Michael C. Creamer, Givens Pursley LLP, Boise, argued for appellant.

Kristine A. Sasser, Deputy Attorney General, Boise, argued for respondent Idaho Public Utilities Commission.

Lisa D. Nordstrom, Boise, argued for respondent Idaho Power Company.

EISMANN, Chief Justice.

This is an appeal from an order of the Public Utilities Commission revising the allowances and refunds available to developers of residential subdivisions. We affirm the order of the Commission.

I. FACTS AND PROCEDURAL HISTORY

On October 30, 2008, Idaho Power Company filed an application with the Idaho Public Utilities Commission seeking to modify its line extension tariff which applies to requests for electrical service that require the installation, alteration, relocation, removal, or attachment of Company-owned distribution facilities. The proposed modification would impact both the cost of relocating and removing the Company's distribution facilities and the cost of extending service to previously unserved locations.

On December 10, 2008, Building Contractors Association of Southwestern Idaho ("Building Contractors") filed a petition to intervene in the proceeding, which was granted. The City of Nampa, the Kroger Company, and the Association of Canyon County Highway Districts also requested and were granted permission to intervene. The latter three intervenors were later joined by the Ada County Highway District, which intervened by filing a petition for reconsideration. This appeal does not involve the issues that these four intervenors raised.

The central issue in this case is the amount that developers must pay when the Company constructs distribution facilities to serve the lots in a new subdivision. For simplicity, we will only discuss charges related to installing single-phase residential service. The distribution facilities include line extensions and terminal facilities. For residential service, the cost of standard terminal facilities include the labor and material to install one overhead service conductor, one 25 kVA transformer to serve a 200 amperage meter base, and the power meter. Typically, the developer does not ask for the power meters to be installed. As homes are constructed in the subdivision, the homeowner requests to be connected to power, and the Company installs the drop wire from the transformer to the home and the meter at no cost to the homeowner.

Historically, the cost of constructing new distribution facilities has been paid partially from up-front capital contributions from developers and partially from electric rates charged to all customers. The up-front charge is either based upon the Company's estimate of the cost of the particular line extension job or specified in the applicable tariff for standard tasks or materials. The Company's estimate was prepared before construction, and the amount charged the developer was rarely adjusted after construction to reflect the Company's actual cost for the work done.

Under the prior tariff, the Company provided developers with a "line installation allowance," "per-lot refunds," and a "vested interest refund" to offset a portion of the developers' costs incurred in having the Company construct the distribution facilities. The line installation allowance is the portion of the estimated cost of the line extension that is funded by the Company at no charge to the developer. Under the prior tariff, it was equal to the Company's cost of providing and installing overhead single-phase transformers within the subdivision. The developer had to pay the additional cost for underground facilities if those were requested. The per-lot refunds were sums refunded to the developer when a permanent residence connected to electrical service and occupied a lot inside the subdivision within five years. The per-lot refunds could be up to $800 each, and a single transformer could serve multiple lots depending upon their geographic configuration. The vested interest refund was a sum the developer could receive if another person outside the subdivision paid to connect to the line extension within five years.

In this proceeding, the Company sought to change the line installation allowance to a fixed sum of $1,780 for each single-phase transformer, to eliminate the per-lot refunds, and to shorten the time period for the vested interest refunds to four years. Building Contractors sought to increase the per-lot refunds to $1000 and to increase the time period for vested interest refunds to ten years.

The line extension allowance for a residence that was not in a subdivision had been the cost of standard terminal facilities plus either $1,300 for an all-electric house or $1000 for a house that did not have electric heat. The Company asked that the allowance for such residences also be changed to $1780 per transformer for single-phase service.

After considering written comments submitted by the parties, the Commission issued its initial order on July 1, 2009. It granted the Company's request to change the line extension allowance for all residences to a fixed sum of $1780 per single-phase transformer and to eliminate the per-lot refunds. It rejected both parties' requests to alter the time period for receiving vested interest refunds.

On July 13, 2009, Building Contractors filed a request for $28,386.35 in "intervenor funding" pursuant to Idaho Code § 61–617A. That statute permits the Commission to require certain regulated utilities to pay all or a portion of an intervenor's legal fees, witness fees, and reproduction costs. Building Contractors stated that the request was untimely under Commission rules due to "the inadvertent and unintentional oversight by its legal counsel with respect to the correct timing for submission of requests for intervenor funding," but it requested that the untimeliness be excused.¹ On July 22, 2009, Building Contractors also filed a petition asking the Commission to reconsider its findings and conclusions regarding terminal facilities allowances, per-lot refunds, and the time period for making vested interest refunds.

On August 1, 2009, the Commission granted Building Contractors's motion for reconsideration with respect to the amount of the appropriate allowances, and it denied the motion with respect to extending the period for vested interest refunds and eliminating the per-lot refunds. On September 3, 2009, the Commission denied Building Contractors's request for intervenor funding because it was untimely. On November 9, 2009, Building Contractors filed a second request for intervenor funding.

Building Contractors submitted additional evidence and argument, and on November 20, 2009, the Commission issued its final order. It denied Building Contractors' petition for reconsideration and the second request for intervenor funding. Building Contractors then appealed.

II. ISSUES ON APPEAL

A. Does the line installation allowance result in unlawful discrimination between new customers in and outside subdivisions or between new and existing customers?

B. Is the line installation allowance supported by substantial and competent evidence?

C. Did the Commission err in denying Building Contractors' requests for intervenor funding?

D. Is Building Contractors entitled to an award of attorney fees on appeal?

III. ANALYSIS

A. Does the Line Installation Allowance Result in Unlawful Discrimination between New Customers in and outside of Subdivisions or between New and Existing Customers?

Building Contractors alleges that the new line extension allowance of $1,780 per single-phase transformer violates Idaho Code § 61–315, which provides in part, "No public utility shall establish or maintain any unreasonable difference as to rates, charges, service, facilities or in any other respect, either as between localities or as between classes of service."

Building Contractors argues that the new tariff "authorizes a $1,780 allowance per transformer installed within a residential subdivision and a $1,780 allowance per customer outside of residential subdivisions." (Emphases in original.) According to Building Contractors, "This arrangement patently treats customers inside and outside subdivisions disparately because in a subdivision a single transformer may serve multiple (up to ten) customers if those customers are located in sufficient proximity to each other, whereas, in the case of a single customer requesting service outside a subdivision, a transformer will only serve that one customer." Thus, it asserts that the Company's investment per electrical consumer in a residential subdivision could be less than the investment per electrical consumer outside of a subdivision.

Idaho Code § 61–315 requires that there be no unreasonable difference as to charges between classes of service. The class of service at issue here is constructing new distribution facilities to extend electrical service to a previously unserved location. Each person or entity who asks the Company to provide new distribution facilities is given the same amount as a line extension allowance—$1,780 for each single phase transformer installed. The amount of the allowance is the same for line extensions in subdivisions and outside subdivisions. Under Building Contractors' argument, a developer should receive a credit of $1,780 per lot, which could be up to $17,800 for one transformer if it could serve residences on ten lots. As the Commission stated in rejecting Building Contractors' assertion that there should be a per-lot allowance rather than a per-transformer allowance, "Permitting a per customer allowance rather than a per transformer allowance could lead to an allowance inside subdivisions that is greater than the cost of the terminal facilities required to provide service." The line installation...