20240920Joint Petition.pdf

RECEIVED
Friday, September 20, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
AVU-E-24-12
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Tel: 208-9_)8-7900 Fax: [phone]
N). Box 7218 Boise, 11) N 1707 - 515 N. 27ih Si. Boise, II) A 1'02
September 20, 2024
Monica Barrios-Sanchez, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Building 8
Suite 201-A(83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Joint Petition of Avista Corporation, Clearwater Corporation and Sofidel America,
Corp., for Approval of a Temporary Waiver of Avista's Master Metering Prohibition
Dear Ms. Barrios-Sanchez:
Attached for electronic filing please find the Joint Petition in the above noted matter.
In addition, attached in a separate pdf are the confidential exhibits numbered 1, 2 and 3 to
the Petition along with the Certificate of Attorney asserting the confidential nature of the
exhibits.
Please feel free to contact me directly in you any questions regarding this filing
f
Si cc 'l
Peter Ri lardson
RICHARSON ADAMS, PLLC

Peter Richardson, ISB 3195
RICHARDSON ADAMS, PLLC
515 N.27"' St.
Boise, ID 83702
Telephone: [phone]
Email: peterarichardsonadams.cnm
Counsel for Clearwater Paper Corporation
David J. Meyer, Esq.
Vice President and Chief Counsel
Regulatory&Governmental Affairs
Avista Corporation
1411 E. Mission Avenue MSC 27
P.O. Box 3727
Spokane, Washington 99220
Telephone[phone]
Dav [e-mail]
Counsel for Avista Corporation
C.Tom Arkoosh ISB#2253
ARKOOSH LAW OFFICES
913 W. River Street,Suite 450
P.O. Box 2900
Boise, Idaho 83701
Telephone:[phone]
Fax:[phone]
Email: [e-mail] Admin copy:erin.cecil narkoosh.com
Counsel for Sofidel America Corp.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETITION OF Case No.:
CLEARWATER PAPER CORPORATION, AVISTA
CORPORATION AND SOFIDEL AMERICA CORP.
FOR APPROVAL OF A CONTRACT TEMPORARILY PETITION FOR CONTRACT APPROVAL AND
WAIVING AVISTA'S PROHIBITION AGAINST TEMPORARY WAIVER OF MASTER METERING
MASTER-METERING ITS ELECTRIC SERVICES RULE
COMES NOW,Clearwater Paper Corporation, Avista Corporation and Sofidel America Corp.
(herein collectively the"Parties"or each individually a"Party"or"Clearwater","Avista"or"Sofidel,"respectively)
and,pursuant to IDAPA 31.01.01.053, petitions the Idaho Public Utilities Commission ("Commission"or"IPUC")
for issuance of an order approving the contract that Sofidel and Clearwater have entered into and providing for a
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE- I

temporary waiver of Avista's Tariff provision generally prohibiting the master-metering of its electric services.
(Avista IPUC Tariff Sheet No.28, First Revised Sheet No. 70-a). The time period provided for in the contract is
until Avista is able to commence separate billing and separate metering and interconnection facilities for the
provision of separate and distinct retail electric service to Sofidel. In support of this Petition the Parties respectfully
submit the following:
I.
THE CLEARWATER PAPER FACILITY
Clearwater owns and operates a pulp,paper and tissue manufacturing facility near Lewiston, Idaho(the
"Facility"). The Facility consists of two operating divisions,a Pulp and Paper Division("Paper Plant")and a
Consumer Products Division(the"Tissue Plant"). The two divisions employ a combined total of approximately
1,250 employees,approximately 500 of which are employed in the Tissue Plant. The Facility was constructed and is
currently operated as an integrated single manufacturing facility with both the Tissue Plant and the Paper Plant
sharing much of the Facility's internal infrastructure—including electrical infrastructure.
II.
SOFIDEL AMERICA CORP.
Sofidel is a manufacturer and marketer of tissue products. It owns and operates certain tissue producing
facilities in Europe and North America.
III.
AVISTA CORPORATION
Avista is a combined gas and electric public utility that is subject to rate and service regulation by the Idaho
Public Utilities Commission. Avista provides electric service to the Facility.
IV.
THE TRANSACTION
Clearwater has entered into an agreement to sell the Tissue Plant to Sofidel or a wholly owned subsidiary
of Sofidel (the"Sales Transaction"). Subject to the satisfaction of certain closing conditions, the Sales Transaction
is expected to close in the fourth quarter of 2024. Pursuant to the Sales Transaction, following the closing,(i)
Sofidel will operate the Tissue Plant,and(ii)Clearwater will continue to operate the Paper Plant. Each Plant will
separately contract with Avista for the provision of electric power and energy pursuant to Avista's Idaho PUC
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-2

approved tariffs and rules and regulations. However, because the Facility's electrical infrastructure was designed
and constructed to serve the Facility as an integrated single entity, it is not currently physically possible for Avista to
separately meter and serve the Tissue Plant as an individual customer.
V.
SEPARATE ELECTRIC UTILITY SERVICE TIMING
Avista has worked diligently with Clearwater and Sofidel to provide initial estimates of the timing for it to
physically separate the Tissue Plant's and the Paper Plant's electric load in order for it to serve each as a unique
customer as required by this Commission's rules and regulations and by Avista's Electric Service Tariffs.' Avista
estimates it may take up to three years to engineer,design,procure and install the requisite electrical metering and
delivery equipment to separately meter the Tissue Plant and the Paper Plant in order to treat Sofidel's and
Clearwater's respective operations therein as operations by unique and distinct customers. A three-year delay is
economically unacceptable to the Parties and could cause substantial harm to the ongoing operations at the Tissue
Plant. Clearwater and Sofidel are cognizant of,and agreeable as to,Avista's potential charges for providing distinct
utility service connections/billing/metering and the Parties are working cooperatively to ensure that Avista has all
access/easements etc. necessary to install the requisite electrical infrastructure.
VI.
EXISTING INTERNAL METERING(SUBMETERING)CAPABILITIES
As noted above, it is not possible for Avista to complete its metering and electrical interconnection work
prior to the anticipated closing of the Sales Transaction. However,because Clearwater has been vigilant and
proactive in the installation of energy conservation and internal demand side management measures, it currently has
the capability to measure and monitor both the Tissue Plant's and the Paper Plant's electrical usage(both energy and
' None of the costs of providing separate services to the Tissue Plant and the Paper Plant will be
borne by Avista or its other ratepayers.
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-3

demand)and can accurately determine the Tissue Plant's and the Paper Plant's respective responsibilities for
Avista's unified single billing statements to the Facility as a whole.
VII.
AVISTA'S MASTER METERING PROHIBITION
Avista's rules and regulations regulating electric service in Idaho,as provided For in its tariffs,
unambiguously prohibit master metering of electric service--unless the Commission approves a specific contract
providing for an exception to that prohibition. Avista's Tariff, IPUC No.28, Sheet 70-a,at paragraph 4 provides, in
relevant part:
Service[electric service] shall be used by the Customer only for the purposes specified in the service
agreement and applicable rate schedule or schedules,and Customers shall not sell,or permit others to use
Such service,except when expresses authorized to do so under appropriate contract.'-
This prohibition closely mirrors the Commission's generic electric rules that also prohibit master metering,albeit
specifically in the context of master metered mobile home parks,multi-tenant residential buildings and shopping
centers. See"Master Metering Rules for Electric Utilities"at IDAPA 31.26.01-000-102.
Vill.
CONTRACT FOR THE TEMPORARY PROVISION OF
MASTER METERED ELECTRIC SERVICE BY
CLEARWATER FOR THE BENEFIT OF SOFIDEL
Attached hereto as Exhibit No. I is a copy of the"llgreement,for the Transition of(InUied Electric.Service
Billings to.Separate Billings fiw the Clearwater Paper Corporation's and the S'ofrdel,,I mer•ica Corp. 's Eacility(ies)
in Nez Perce County, Idaho."(the"Transition Agreement"). The terms of the Transition Agreement are self-
explanatory. The purpose of the Transition Agreement is to facilitate the uninterrupted and ongoing operation of the
Tissue Plant by Sofidel after the closing of the Sales Transaction while allowing Avista the necessary time to install
the equipment to begin metering the Tissue Plant and the Paper Plant as separate and distinct customers. Avista has
'- Emphasis provided.
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-4

represented to Clearwater and Sofidel that it will take Avista up to three years to complete the installation of
separate metering equipment. The Sales Transaction is,however, time sensitive such that a final Commission Order
is requested by the Parties no later than October 28,2024. An approval order issued after that date may jeopardize
the ability of the Parties to proceed according to their previously agreed upon terms and conditions.
In aid of efficiency and a timely review process for the Commission's deliberations and due diligence,the
Parties have provided all documents referenced in and relied upon in the drafting and implementation of the
Transition Agreement as exhibits thereto. Also, in aid of an efficient and speedy review process,all relevant
confidential documents have been provided pursuant to this Commission's rules providing for the filing of the same
in a non-public manner. . Finally,the Parties hereto commit to using their best efforts to expedite responses to all
of the PUC Staffs discovery discovery questions,and furthermore hereby waive formalities not only as to response
times but also as to format and service of the same.
IX.
MODIFIED PROCEDURE
The Parties believe that a hearing is not necessary to consider the issues presented herein,and respectfully
request that this Petition be processed under Modified Procedure; i.e.,by written submissions rather than by a
hearing. IDAPA 31.01.01.201,et.seq. Furthermore,the Parties assert that there are no other potentially interested
parties to the matter presented herein.
X11.
EXPEDITED NOTICE/COMMENT PERIOD
Due to the constrained timeframes discussed above relative to the Sales Transaction's closing and the
commencement of Sofidel's operation of the Tissue Plant,the Parties respectfully request the Commission find that
a shortened comment/protest period than that typically provided for in its rule is warranted in this case. (See IDAPA
31.01.01.202). In addition to addressing the Parties' needs,a shortened comment period is not contrary to the public
interest due to the fact that Avista's other ratepayers will remain completely indifferent as to the approval of the
Transition Agreement both as to rates and quality of service. Other than the three Parties herein, there are no other
affected or potentially affected persons relative to the transaction proposed herein. The Commission has
ample precedent for granting various parties' requests for shortened comment/protest periods. See e.g. In the,vAlller
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-5

of the Application of Idaho Power for Authority to Increase its Interim and Base Rates and Charges,far Electric
Service, Case No. I PC-E-03-13;and In the Mailer of the Application of United Electric Co-op, Inc.for Approval of
an Agreement Pursuant to Idaho Code§61-333, Case No.GNR-E-02-03,Order No. 29020.
XIII.
REQUEST FOR RELIEF
Wherefore the Parties hereto respectfully request that the Commission issue its order approving the
Transition Agreement as filed without material modification and explicitly waiving Avista's master metering
prohibition as it may apply to the Transition Agreement. Because approval of this request is necessary to position
Sofidel and Clearwater to commence operating the Tissue Plant and the Paper Plant under separate ownership the
Parties respectfully request that the Commission issue its order no later than October 28,2024.
Dated this 201h day of September 2024.
Peter Richardson,Counsel for Clearwater Paper
Corporation
David J.Meyer,Counsel for Avista Corporation
C.Tom Arkoosh,Counsel for Sofidel America Corp.
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-6

of the Application of Idaho Power for Authority to Increase its Interim and Base Rates and Charges for Electric
Service, Case No. [PC-E-03-13;and In the Matter of the Application of United Electric Co-op,Inc.for Approval of
an Agreement Pursuant to Idaho Code§61-333, Case No.GNR-E-02-03,Order No.29020.
X11I.
REQUEST FOR RELIEF
Wherefore the Parties hereto respectfully request that the Commission issue its order approving the
Transition Agreement as filed without material modification and explicitly waiving Avista's master metering
prohibition as it may apply to the Transition Agreement. Because approval of this request is necessary to position
Sofidel and Clearwater to commence operating the Tissue Plant and the Paper Plant under separate ownership the
Parties respectfully request that the Commission issue its order no later than October 28,2024.
Dated this 20'h day of September 2024.
Peter Richardson,Counsel for Clearwater Paper
Corporation
avid J. McycAounsel for Avista Corporation
C.Tom Arkoosh,Counsel for Sofidel America Corp.
PETITION FOR CONTRACT APPROVAL AND TEMPORARY WAIVER OF MASTER METERING RULE-6

AGREEMENT FOR THE TRANSITION
OF UNIFIED ELECTRIC SERVICE BILLINGS
TO SEPARATE BILLINGS FOR
CLEARWATER PAPER CORPORATION'S AND SOFIDEL AMERICA CORP.'S
FACILITY(IES) IN NEZ PERCE COUNTY, IDAHO
This Agreement For the Transition of Unified Electric Service Billings to Separate
Billings for Clearwater Paper Corporation's and Sofidel America Corp.'s Facility(ies)in Nez
Perce County, Idaho("Transition Agreement")is entered into this 20th day of September 2024,
by and between Clearwater Paper Corporation., a Delaware corporation with its principal offices
in Spokane, Washington("Clearwater') and Sofidel America Corp., a Florida corporation with
its principal offices in the U.S. located in Horsham, Pennsylvania("Sofidel '). Clearwater and
Sofidel are each a"Party" and referred to collectively as the"Parties".
RECITALS
A. Clearwater owns and operates an integrated facility that is engaged in pulp/paper and
paperboard manufacturing, tissue converting and tissue papermaking that is located in
Nez Perce County, Idaho(the"Facility').
B. Sofidel owns and operates certain tissue producing facilities in Europe and North
America.
C. Although the Facility produces distinct products through distinct production
processes, the Facility has been designed, planned and, historically has been operated
as a single integrated industrial plant, and has not been designed to be physically
separated as to, inter alia, the metering and delivery of electric power and energy to
its constituent parts.
D. The Parties have entered into that certain Asset Purchase Agreement (the" ur has
Agreement"), dated as of July 21, 2024, pursuant to which, among other things, upon
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 1

the closing of the transactions contemplated thereby (the"Closin ") and pursuant to
the terms of the Services and Use Agreement to be entered into upon such closing, a
form of which is attached to the Purchase Agreement as Exhibit D thereto(as it may
be amended from time to time in accordance with its terms, the",S AA"), Sofidel (or
its wholly owned subsidiary) will operate the tissue converting and tissue
papermaking operations(the"Tissue Plant") in the Facility. Clearwater will, after the
consummation of the transactions contemplated by the Purchase Agreement continue
to operate the paper and paperboard portions of the Facility(the"Paperboard Plant").
E. It is the intent of the Parties that, pursuant to the terms of the Purchase Agreement and
the SUA, the Paperboard Plant and the Tissue Plant will operate as separate entities
for all legal purposes. It is further the intent of the Parties that the anticipated
separation of the two plants will include the separate provision of electric service
from the local electric utility,Avista Corporation("Avista'). However, due to
logistical issues and backlog in the worldwide supply chain of electric utility
hardware(such as transformers and conduit)Avista has informed the Parties that it
will take up to three years before it will be able to complete the electrical work
necessary for it to serve the Paperboard Plant and the Tissue Plant as distinct and
separate electric customers. The time period required for Avista to complete the
electric work necessary to treat the Paperboard Plant and Tissue Plant as distinct
customers of Avista is referred to herein as the"Transition Period."
F. Clearwater is currently Avista's only customer through which Avista provides electric
service to the Facility. The Tissue Plant's electric service is currently physically
integrated with the Paperboard Plant's electric service. The Tissue Plant's electric
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 2

usage(energy, demand, time of use, seasonality, etc.) can be reasonably measured by
Clearwater and audited by Sofidel using existing electrical monitoring equipment that
is in place and operational in the Facility( "Transition Monitoring Equipment").
1. CONSIDERATION
Each Party hereby acknowledges and warrants that it has received valid consideration in
connection with this Transition Agreement and the transactions contemplated herein and that it
has all requisite power and authority, corporate or otherwise,to execute and deliver this
Transition Agreement and to consummate the transactions contemplated herein. Now,therefore,
the Parties hereto agree as follows:
2. TERM EFFECTIVE DATE
This Transition Agreement is contingent upon(i)the Closing and (ii)the express
approval, without material modification, of this Transition Agreement by the Idaho Public
Utilities Commission. In the event that, for any reason, the foregoing clause(i)and clause (ii) do
not occur, this Transition Agreement shall be null and void. This Transition Agreement will
commence on the date such Closing occurs and will end on the date Avista Corporation
commences separate billing and metering services for the Tissue Plant and the Paperboard Plant.
Payment obligations incurred hereunder will survive the termination of this Transition
Agreement until the same have been satisfied.
3. PARTIES'OBLIGATIONS
3.1 Clearwater will continue to operate the Facility in a commercially and electrically
reasonable manner such that electric power and energy will be continuously delivered to
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 3

the Tissue Plant without interruption or disruption subject only to the limitations
expressly stated herein.
3.2 Each Party will, subject to commercially and electrically reasonable limitations,
permit and facilitate Avista's and the other Party's access to the Facility such that Avista
will be able to timely complete the construction and installation necessary to service the
Tissue Plant as a separate and distinct utility customer for the provision of electric power
and energy.
3.3 Clearwater, in cooperation with Sofidel, will measure and monitor Sofidel's
Tissue Plant's electric usage in as granular manner as commercially and electrically
reasonable such that the Parties will be able to reasonably calculate, audit and verify
Clearwater's and Sofidel's respective responsibility ("Clearwater's Usage" and "Sofidel's
Usage" respectively) for the total electrical consumption ("Facility's Usage") that is
provided to the Facility by Avista for the duration of the Transition Agreement,
3.4 Clearwater will, for the duration of the Transition Agreement, remain Avista's sole
electric customer and will be responsible for payment for and receipt of the Facility's
Usage and will pay all of Avista's charges and fees due for the provision of electric power
and energy to the Facility. In return for Clearwater's delivery of electric power and
energy to the Tissue Plant and for its payment for all such power and energy to Avista,
Sofidel will compensate Clearwater for Sofidel's Usage in an amount equal to the
monetary difference between (a) the amount Clearwater is actually obligated to pay
Avista for the Facility's Usage and (b) the amount that Clearwater would have paid Avista
solely for Clearwater's Usage, subject to the terms of Section 3.3 of the SUA.
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 4

4. ENTIRE AGREEMENT
Notwithstanding the above, nothing in this Transition Agreement shall be construed as
limiting, waiving or modifying the rights and obligations of Clearwater and Sofidel pursuant to
the Purchase Agreement, the SUA or any other agreement entered into in connection therewith or
by such Parties at the Closing of the Purchase Agreement. No change, amendment, or
modification of any provision of this Transition Agreement shall be valid unless set forth in a
written amendment to this Transition Agreement signed by all Parties.
5, NOTICES
All communications regarding this Transition Agreement shall be mailed or delivered as
follows:
If to Clearwater:
Clearwater Paper Corporation
601 West Riverside, Suite 1100
Spokane, WA 99201
Attention: Carol Haugen; Marc Rome
Email: Carol.I lauueex((-i)clear�vaterpaper.com; Marc.Rome rr clearwaterpaper com
With a copy to(which shall not constitute notice)
Peter Richardson, ISB 3195
RICHARDSON ADAMS, PLLC
515 N. 27th St,
Boise, ID 83702
Telephone: [phone]
Email: [e-mail]
If to Sofidel:
Building One, 300 Welsh Road, Suite 200
Horsham, PA 19044-2248
Attention: Luca Colageo
Email: 1 [e-mail]
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 5

6. COUNTERPARTS
This Transition Agreement may be executed in one(1)or more counterparts, and by the
different Parties in separate counterparts, each of which when executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement, A PDF or
other electronic reproduction of this Agreement may be executed by each Party and delivered by
such Party by any electronic means (including DocuSign or an equivalent)pursuant to which the
signature of or on behalf of such Party can be seen. Such execution and delivery shall be
considered valid, binding and effective for all purposes.
7. MISCELLANEOUS
T 1 Nothing expressed or referred to in this Agreement will be construed to give any
person other than the Parties to this Transition Agreement any legal or equitable right,
remedy, or claim under or with respect to this Transition Agreement or any provision
of this Transition Agreement.
7.2 Sections 11.1, 11.6, 11.7, 11.10, 11.11 and 11.12 of the SUA will apply mulalis
mulandis to this Agreement(provided that Section 11.12 shall not limit disclosure to
the Idaho Public Utilities Commission orAvista),
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 6

IN WITNESS WHEREOF: the Parties hereto have caused this Transition Agreement to
be executed by their duly authorized representatives as of the date(s)forth below.
Clearwater Paper Corporation Sofidel America Corp.
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 7

Docusign Envelope ID:3E5FA3C3-OWO, 44<39&t3.117F39348A32
Clearwater/Sofidel Conlidential
IN WITNESS WHEREOF:the Parties hereto have caused this Transition Agreement to
be executed by their duly authorized representatives as of the date(s) forth below.
Clearwater Paper Corporation Sofidel America Corp.
o«osb„w
J4 `� u` N9 Luigi Lazzareschi
settembre 19,2024
Clearwater Paper and Sofidel
Electric Services Transition Agreement
Page 7