The Idaho Public Utilities Commission recently approved Avista’s August 2018 application in which the company had requested approval of an “agreement for the purchase and sale of the Cheney and Four Lakes Tap Lines” and a “transfer of ownership agreement” – collectively referred to as the agreements – between the company and Bonneville Power Administration (BPA).
The commission said that its staff filed the only comments in the case, recommending that the commission approve the application; Avista did not reply and no one testified at a hearing.
The commission said that Idaho Code § 61-328 governs the transfer of electric generation, transmission, and distribution equipment in the state. Before such equipment can be transferred, the commission must determine that:
- The transaction is consistent with the public interest
- The cost of, and rates for, supplying service will not be increased by reason of such transaction
- The transferee has the bona fide intent and financial ability to operate and maintain the transferred property in the public service
Discussing the application, the commission said that the agreements transfer ownership of 15 miles of BPA’s 115-kV tap lines and easements to Avista in exchange for Avista transferring a 230-kV power breaker to BPA. The Avista-owned power breaker is located in a BPA substation, while the BPA-owned tap lines are transmission lines in Avista’s Balancing Authority Area, are physically and electrically separate from BPA’s main transmission network, and are entirely surrounded by Avista’s transmission system.
The commission added that Avista asserted that maintaining the equipment at issue has posed administrative, maintenance, and NERC compliance challenges for both companies.
Discussing staff’s comments, the commission said that according to staff, the transfer would be in the public interest because the transfer would result in a more efficient use of resources and reduced costs for Avista and BPA. Staff also said that the additional transmission routing options for Avista resulting from the transfer could enhance reliability to meet future load growth. The commission added that staff determined that rate base and depreciation/amortization expenses would not change as a result of the transaction, and therefore there would be no increase in costs or retail rates due to the transaction.
Staff recommended that the commission require Avista to file a quantitative cost/benefit analysis in future transfers in order to more plainly illustrate that customer rates would not increase because of the proposed transaction.
The commission said that it “finds that the agreements satisfy Idaho Code § 61-328. Specifically, the agreements are consistent with the public interest, will not increase costs or rates of supplying service, and the transferees have the bona fide intent and ability to operate and maintain the property in the public service.”
The commission ordered Avista to supply a quantitative cost/benefit analysis if requested in future applications, noting that such an analysis could be beneficial in determining whether future transfers would raise the cost of supplying service and thereby increase customer rates.