Utah Power & Light Co. v. Idaho Public Utilities Commission

730 P.2d 930, 112 Idaho 10, 1986 Ida. LEXIS 539

• Court: Idaho Supreme Court
• Decided: November 26, 1986
• Docket: No. 16363
• Status: Published

Opinions

HUNTLEY, Justice.

This appeal presents the issue of whether the Idaho Public Utilities Commission (IPUC) should be sustained in its entry of an order wherein it determined that, as between Utah Power & Light Co. (UP & L) and Idaho Power Co. (IPC), the latter is the appropriate utility to provide future service to the Idaho National Engineering Laboratory operated by the U.S. Department of Energy (DOE) and located near Arco, Idaho.

A synopsis of the history of electrical service to the area in question is as follows: Electrical service was first provided in the area (i.e. to the City of Arco) by UP & L in 1925. Electrical service to the Naval Proving Grounds (predecessor to DOE) was first and exclusively provided by UP & L in 1943. In 1949, UP & L signed a 100 kilowatt electrical supply contract with the Atomic Energy Commission (predecessor to DOE), with the point of delivery to be the Scoville substation, owned by DOE, in Butte County. A three-party agreement was entered into in 1950 to provide that energy, with the U.S. Atomic Energy Commission designated as “buyer,” IPC as “seller” and UP & L “a party of the second part to the extent hereinafter provided.”

Under the three-party agreement, approved by the IPUC, both Idaho Power and Utah Power billed DOE directly for their respective services, with the funds being deposited in a “pool account” and disbursed periodically under a separate two-party agreement between the utilities. Over the past thirty-five years DOE received less than 2% of its total energy from UP & L, UP & L primarily supplying standby capacity. Since 1978, IPC has been the sole supplier of energy to DOE.

At the time the three-party agreement was entered into, the sole certificate of public convenience and necessity for electrical service to customers in Butte County rested with UP & L. That agreement provided UP & L would construct a 132 kilo-volt service line from Goshen substation (owned by UP & L) to Scoville substation (owned by DOE). This line was the sole transmission connection for power to DOE from 1950 to 1970.

In 1957, the three-party agreement was amended to provide for the increased power requirements of DOE, with those requirements being increased from 20,000 kilowatts to 40,000 kilowatts. At the same time, UP & L and IPC entered into a two-party agreement regarding the method of transmission of the power, with UP & L largely responsible for delivery.

In February 1969, IPC was also granted a certificate of convenience and necessity for Butte County, which was amended later that year (amended certificate #268) and was “limited to the transmission, interchange and supply of high voltage electric power and energy.”

In 1970, IPC, UP & L and Montana Power Company constructed the AMPS line, a 230 kilovolt transmission line. UP & L, at the same time, built Antelope substation one-half mile east of DOE’s Scoville substation, giving DOE access to power supplied by the AMPS line.

On January 30, 1985, DOE petitioned the IPUC for a declaratory ruling that IPC, rather than UP & L, has the right to be sole supplier of electricity to INEL.

Several issues are before us on appeal: Whether the IPUC had jurisdiction to decide the issues raised and whether the case presented a controversy ripe for resolution; whether the IPUC correctly rejected the Electric Supplier Stabilization Act (ESSA) (I.C. § 61-332 et seq.) as the controlling statutory scheme, and; whether the IPUC’s finding that upon termination of the agreement, IPC is entitled to be sole supplier to DOE is supported by the evidence. We deal with each issue in turn.

JURISDICTION AND RIPENESS

In an order dated May 3, 1985, the IPUC concluded that it was vested with jurisdiction over the DOE’s petition for declaratory ruling and that the petition presented a controversy ripe for resolution, although prospective in nature, as the three-party agreement had not yet been terminated. UP & L contends that the IPUC erred in so concluding as DOE had not made a definite commitment to terminate the three-party agreement.

Although Idaho public utilities law does not specifically provide for declaratory judgments, the IPUC found that the Idaho Uniform Declaratory Judgments Act applied, as that act provided “the only place to look for guidance____” The IPUC cited I.C. § 10-1203 of the Uniform Declaratory Judgments Act, which provides for the issuance of a declaratory judgment in a contract dispute “before or after there has been a breach.” Harris v. Cassia County, 106 Idaho 513, 516-517, 681 P.2d 988, 991 (1984).

The IPUC further found that “the Department of Energy’s status as an electric customer would be threatened if it exercised its right to terminate the three-party agreement [without knowledge of the result of such action].”

We agree with the analysis of the IPUC and hold that, for the reasons stated, the IPUC correctly decided that it had jurisdiction to decide the issues presented by this case and that the issue was ripe for resolution.

THE STATUTORY SCHEME

UP & L next contends that the IPUC erred in failing to decide the controversy under the statutory scheme provided by the Electric Supplier Stabilization Act (ESSA) (I.C. § 61-332 et seq.) and, instead, finding that I.C. §§ 61-501, -526 and -528 provide the appropriate guidance and authority to the IPUC in this case. We hold that the IPUC was correct in ruling that ESSA is inapplicable to this situation.

UP & L urges that I.C. § 61-332B of the ESSA is controlling. That section provides:

61-332B. Electric supplier prohibited from serving consumers or former consumers of another supplier. — No electric supplier shall construct or extend facilities, nor make any electric connections, nor permit any connections to be made to any of its facilities for the purpose of supplying electric service nor shall it supply or furnish electric service to any electric service entrance that is then or had at any time previously been connected for electric service to facilities or another electric supplier, without the written consent of such other electric supplier; provided, however, (a) such other electric supplier is then, or was previously the last supplier, lawfully connected to said electric service entrance, and (b) such other electric supplier is well and able to provide adequate electric service.

UP & L asserts that, under this analytic scheme, UP & L is a prior supplier willing and able to adequately supply DOE and has not given consent to IPC to solely supply DOE. Accordingly, UP & L asserts, the finding of the IPUC that IPC is entitled to supply DOE upon termination of the three-party agreement is erroneous. We are not persuaded.

1.C. § 61-334(2) of the ESSA is controlling and reads:

61-334. Special rules of interpretation. — Nothing contained in this act shall be construed to:

2. Apply to controversies between two (2) or more public utilities.

UP & L would have us interpret that statute to require only that controversies exclusively between two or more public utilities not be governed by the ESSA. The language of I.C. § 61-334(2), however, speaks for itself and we must construe statutes according to their plain and obvious meanings. Hartley v. Miller-Stephan, 107 Idaho 688, 692 P.2d 332 (1985); Union Pacific Railroad Co. v. State Tax Commission, 105 Idaho 471, 670 P.2d 878 (1983). Further, when viewed in a context which takes account of the case law existing at the time the ESSA was enacted, it is apparent that the legislature’s purpose in enacting the Act was to vest district courts with jurisdiction to address service territory disputes between utilities and either cooperatives or (later) municipalities not subject to the jurisdiction of the IPUC. Clearwater Power Co. v. Washington Power Co., 78 Idaho 150, 299 P.2d 484 (1956) (one year prior to the enactment of the ESSA, this Court held the IPUC did not have jurisdiction to address a dispute between a public utility and cooperative); Unity Light & Power Co. v. City of Burley, 83 Idaho 285, 361 P.2d 788 (1961) (holding no IPUC jurisdiction in a dispute between a public utility and municipality). The ESSA was not, as UP & L asserts, intended to provide consumers with an express statutory mechanism by which they would be able to take their disputes with one or more utilities before the IPUC. Neither was it intended to provide an alternative forum for disputes between two public utilities more appropriately heard by the IPUC.

Although no express statute in the public utilities law provides authority to the IPUC in this instance, the broad general power of the IPUC (I.C. § 61-501), coupled with its powers of certification provide a basis for jurisdiction in this unique factual situation.

This Court has often ruled that the IPUC has every power, express or implied, necessary to enable it to exercise its powers and purposes. Washington Water Power Co. v. Kootenai Environmental Alliance, 99 Idaho 875, 591 P.2d 122 (1979); Lemhi Telephone Co. v. Mountain States Tel. & Tel., 98 Idaho 692, 571 P.2d 753 (1977); United States v. Utah Power & Light Co., 98 Idaho 665, 570 P.2d 1353 (1977). Further, it is a principle of long-standing that the IPUC has the duty to resolve customer or service territory disputes between regulated utilities. Idaho Power & Light Co. v. J.A. Blomquist, et al., 26 Idaho 222, 141 P. 1083 (1914). Therefore, despite the anomalous lack of express authority granting IPUC jurisdiction in the instant case, these factors, coupled with the absence of a more appropriate forum and the fact that the IPUC has exclusive jurisdiction over territorial disputes between two public utilities, (I.C. § 61-526), the IPUC found jurisdiction to hear the instant case.

UP & L also argues that a failure to apply the ESSA in the instant case will subvert the stated intent behind the ESSA —specifically, the desire to promote harmony between electrical suppliers, to prohibit the “pirating” of customers of another supplier and to discourage duplicative electric facilities. (I.C. 61-332B). However, the concern that sustaining the IPUC order might signal utilities that we now condone the “pirating” away of customers of competing utilities found within the geographic area stated in another utility’s certificate of convenience and necessity is ill-founded. No such condonation is intended. We are addressing an unique fact situation with this holding which must, then, be interpreted narrowly. In the instant case, we are not dealing with certificates of public convenience and necessity for general service in a franchise area. Rather, we are dealing solely with delivery to a special contract customer (DOE) in a situation where both utilities had authority to deliver energy at transmission voltage, and more importantly, where there is a history under a longstanding contract between the two utilities and its customer which had been approved by the IPUC. That history shows that Idaho Power was, and has been for a long number of years, the primary supplier of the energy to DOE.

THE FACTUAL FINDINGS OF THE IPUC

We turn now to the central issue of this appeal: whether the commission’s decision providing, that upon termination of the three-party agreement, Idaho Power was entitled to be the sole supplier of DOE is supported by substantial evidence and the applicable law.

Our standard of review of IPUC decisions is limited.

“[O]ur focus must be upon the evidence presented to the commission. If the evidence is competent and substantial in support of the findings made and there has been no clear abuse of discretion, this court is constrained to affirm those findings.” Grindstone Butte Mutual Canal Co. v. Idaho Public Utilities Commission, 102 Idaho 175, 178, 627 P.2d 804, 807 (1981) (see also, Hayden Pines Water Co. v. Idaho Public Utilities Commission, [111] Idaho [331], [723 P.2d 875], (Opinion No. 1986-104, filed July 15,1986); Idaho Power Co. v. Idaho Public Utilities Commission, 108 Idaho 943, 703 P.2d 707 (1985); Utah-Idaho Sugar v. Intermountain Gas Co., 100 Idaho 368, 597 P.2d 1058 (1979).)

Two factual findings of the IPUC are before us: First, the IPUC finding that Idaho Power Company has a valid certificate of public convenience and necessity to serve DOE and; second, the IPUC finding that the Idaho Power Company is currently supplying DOE’s entire load, which finding supports the conclusion that the Idaho Power Company should be entitled to solely supply DOE upon termination of the three-party agreement.

There is ample evidence in the record to sustain both findings of the Public Utilities Commission. The commission correctly recognized that, while Idaho Power Company’s amended certificate No. 268 gave it no general grant of authority to serve all customers in Butte County, the certificate nevertheless allowed Idaho Power to supply the power and energy at transmission level for the benefit of one customer— DOE. The fact that UP & L also possessed a valid certificate of convenience and necessity was not a dispositive factor in the commission’s order. Instead, the commission looked to the history underlying the three-party relationship, as well as the comparative reliability, as between UP & L and IPC, of the utilities’ transmission capability. There was further evidence that public interest factors, such as the likely effect on rates to be paid by Idaho ratepayers weighed heavily in favor of Idaho Power Company. However, neither factor was a basis for either the findings or conclusions in the commission’s order.

Rather, the commission correctly decided that, as between two utilities with valid certificates to deliver energy at transmission voltage, the utility that is currently and satisfactorily serving the disputed area may continue to do so. Such a conclusion is mandated by the unique factual situation presented by this case — that of a heavy consumer dependent upon a continuous, reliable, large-scale supply of electricity.

We reiterate that this holding is in no way meant to implicitly approve the “pirating away” of customers encompassed within the geographical area contained in another utility’s franchise area supported by a valid certificate of convenience and necessity. Instead, we are responding to the peculiarities of the situation before us, that is, where two utilities once shared the authority to serve a customer and it is now necessary to determine which of the two shall continue the service.¹

Since the findings of the commission are supported by substantial and competent evidence and there has been demonstrated no clear abuse of discretion, the order of the Idaho Public Utilities Commission ruling that Idaho Power Company is the appropriate utility to provide future service to the INEL is affirmed.

Costs to respondents. No attorney fees on appeal.

DONALDSON, C.J., and SHEPARD and BISTLINE, JJ., concur.

1 . Much of what is stated in the dissent of Justice Bakes would have merit and be applicable if we were dealing with one utility attempting to carve out one or more general service customers in the franchise area of another utility. However, the special history of these parties as herein recounted, demonstrates this is not such a case.