20090223_2484.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: FEBRUARY 20, 2009

SUBJECT: AVISTA CORPORATION’S APPLICATION FOR APPROVAL OF AN
ELECTRIC DISTRIBUTION SERVICE AGREEMENT WITH EAST
GREENACRES IRRIGATION DISTRICT; CASE NO. AVU-E-09-02

On February 2, 2009, Avista Corporation (“Avista” or “Company”) filed an
Application with the Commission seeking approval of its Electric Distribution Service
Agreement with East Greenacres Irrigation District (“Greenacres”).
THE AGREEMENT
The Electric Distribution Service Agreement (“Agreement”) entered into between
Avista and Greenacres provides for the continuation of “United States Bureau of Reclamation
(“Bureau” or “Bureau of Reclamation”) energy over Avista owned and operated distribution
facilities from Avista’s Post Falls Substation to certain delivery points on the Greenacres system.
Application at 1. The effective date of the Agreement is March 1, 2009 or the first day following
an Order by the Commission granting approval of the Agreement. Id.
The Application states that the Agreement is “unique, and therefore more
appropriately provided under a special contract rather than a filed tariff.” Id. at 2. Avista states
that the distribution rate charged by the Company is “consistent with distribution charges
embedded in current Idaho retail rates” and the net revenues generated via the Agreement will
serve as an offset to the Company’s fixed costs. Id. In recent years, Avista has delivered
approximately 3.1 million kWhs to Greenacres’ pumping facilities at an annual rate of $8,157.
Id. at 3.
DECISION MEMORANDUM 2
The parties entered into the Agreement on January 30, 2009. Id. The Agreement
does not contain a fixed termination date. Id. However, the Agreement will terminate
contemporaneously with the occurrence of either of the following conditions: (1) the termination
of the parties’ Transmission Agreement; or (2) one year prior written notice submitted by either
party. Id. The distribution charge recited in the Agreement is $3,622.77 per month, or
$43,473.24 per year. Id. The Application states that the charge was “derived from Avista’s last
cost of service study” and subsequent settlement adjustments and revenue increases associated
with Case No. AVU-E-08-01 and Commission Order No. 30647. Id. at 3-4.
Avista states that “the contract is non-discriminatory and is not unreasonably
preferential.” Id. at 4. The Company requests that its Application be processed under the
Commission’s Modified Procedure rules. Id. at 2.
STAFF RECOMMENDATION
Staff has reviewed Avista’s Application and recommends that it be processed through
Modified Procedure, i.e., through a written comment period in lieu of a hearing, and
recommends a notice and comment period of 21 days. See IDAPA 31.01.01.201-204.
COMMISSION DECISION
Does the Commission wish to process Avista’s Application through Modified
Procedure with a 21-day comment period following a Notice of Application and Notice of
Modified Procedure?

M:AVU-E-09-02_np