Idaho Public Utilities Commission

Case No. IPC-E-08-22, Order No. 30853

July 7, 2009

Contact: Gene Fadness (208) 334-0339, 890-2712


Commission adopts changes to cost allocations for new development


With only minor modifications, the Idaho Public Utilities Commission has adopted an Idaho Power Co. request to require developers and builders to pay more of the costs associated with installing electric distribution equipment to serve new customers.


The modifications to the “Rule H Tariff” were made in an attempt by the company and the commission to require growth to pay for itself by shifting more of the installation costs from the general body of ratepayers to new customers requesting construction for the services.


The Building Contractors Association of Southwestern Idaho opposed the application, asserting that increased costs are a result of inflation rather than growth. Further, the Building Contractors argued, the added costs for developers will drive up the cost of new homes in an already sagging economy.


Effective Nov. 1, developers of subdivisions and multiple occupancy projects will receive from Idaho Power a $1,780 allowance for each single-phase transformer installed within a development and a $3,803 allowance for each three-phase transformer. The amount of the allowance, which is recovered through customer rates, is equivalent to what existing customers pay for distribution. Developers will be responsible for any costs above those amounts. The allowance will be updated annually to reflect the actual costs Idaho Power incurs for line extensions, transformers, meters and service cable for new customers.


The commission also ended the practice of developers getting refunds on their initial investment to extend electric services to undeveloped lots. In the past, as customers move on to the lots and begin receiving electric service, developers got an $800 per lot refund. In place of the lot refunds, the commission adopted the per lot distribution allowance cited above.


However, developers can still get refunds for up to five years for line extension installations outside of subdivisions as those properties are sold and begin to use electricity. Idaho Power asked that the time allowed for the developer to sell the lots and qualify for the refund be shortened to four years from the current five years, The Building Contractors said the refund period should be extended to 10 years due to the slowing economy. The commission opted to leave the refund period at five years.


Idaho Power also asked that it be allowed to add a new section to the Rule H Tariff that more clearly spells out who pays when local governments require Idaho Power to relocate distribution facilities on public right-of-way due to roadway expansion.


Idaho Power pays for the relocation when it is being required by a governmental agency such as the state Department of Transportation or county or city highway departments for a public benefit. Idaho Power claims there have been occasions where public road agencies requested relocation on behalf of new developments and expected Idaho Power to pay for the relocation. Idaho Power stated, and the commission agreed, that when government orders relocation for the benefit of a private development, the developer should pay for the relocation.


The Ada County Highway District, the City of Nampa and the Association of Canyon County Highway Districts filed comments in the case claiming these modifications put the commission in the position of determining whether a project requiring utility relocation conveys a general public benefit, a third-party benefit or a shared benefit. The commission lacks jurisdiction to do so, the agencies argued.


The commission disagreed, stating the added language does not usurp public road agencies’ authority to decide when and where utility relocations need to be made, but “simply creates a mechanism for determining who is responsible for the costs of the relocation.”


A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case No. IPC-E-08-22.


Interested parties may petition the commission for reconsideration by no later than July 22. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.