20241015Staff Comments.pdf

RECEIVED
Tuesday, October 15, 2024 4.43:49 PM
IDAHO PUBLIC
UTILITIES COMMISSION
CHRIS BURDIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETITION )
OF CLEARWATER PAPER CORPORATION, ) CASE NO. AVU-E-24-12
AVISTA CORPORATION AND SOFIDEL )
AMERICA CORP. FOR APPROVAL OF A )
CONTRACT TEMPORARILY WAIVING ) COMMENTS OF THE
AVISTA'S PROHIBITION AGAINST ) COMMISSION STAFF
MASTER-METERING ITS ELECTRIC )
SERVICES
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission, by and
through its Attorney of record, Chris Burdin, Deputy Attorney General, submits the following
comments.
BACKGROUND
On September 20, 2024, Clearwater Paper Corporation ("Clearwater"), Avista
Corporation("Avista"), and Sofidel America Corp ("Sofidel") (collectively the"Parties"), filed a
joint Petition("Petition") with the Idaho Public Utilities Commission("Commission") for an
order approving a Transition Agreement between Sofidel and Clearwater("Agreement"), and
providing a temporary waiver of Avista's Tariff prohibiting master-metering of electric services.
The Parties represent that Clearwater has entered into an agreement to sell its Tissue
Plant to Sofidel. Petition at 2. The Parties state that each company will separately contract with
STAFF COMMENTS 1 OCTOBER 15, 2024

Avista for the provision of electric power and energy pursuant to Avista's approved tariffs;
however, because the current electrical infrastructure was designed and constructed to serve an
integrated single entity, it is not currently physically possible for Avista to separately meter and
serve the Tissue Plant as an individual customer. Id. at 2-3.
The 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. Id. 2.
Avista estimates it may take up to three years to install the requisite electrical metering
and delivery equipment to treat Sofidel's and Clearwater as separate customers. Id. 3.
The Parties represent that until Sofidel and Clearwater can be treated as separate
customers, Clearwater currently has internal metering infrastructure with the capability to
separate the Tissue Plant and Paper Plant's electrical usage necessary to separate Sofidel and
Clearwater's financial responsibilities for payments to Avista for the bill as a whole, and that
Sofidel will pay Clearwater for Sofidel's share of the usage. Id. 3-4.
The Parties represent that the waiver is necessary to complete the closing of the sales
transaction, thus the Parties request a shortened time period for processing the case with an order
that can be issued no later than October 28, 2024. Id. 5-6.
STAFF ANALYSIS
Staff examined the Petition, Avista's comments, the Commission's rules and policies
pertaining to master metering, and the responses to discovery requests. Taking into
consideration the temporary nature of the requested waiver, Avista's verification that the power
consumption and usage can be completely separated and separately metered between Clearwater
and Sofidel, and the existence of the Agreement, Staff concludes that the request would allow the
two Companies to move forward with the sale of the business while affording Avista time to
develop and construct the required infrastructure to provide separate substation infrastructure and
metering.
Staff recommends that the waiver be granted, conditioned on the Parties submitting a
compliance filing clarifying how demand charge billing discrepancies will be resolved. Staff
also recommends the Commission order Avista to:
STAFF COMMENTS 2 OCTOBER 15, 2024

1. Submit infrastructure project status updates to Staff semi-annually to demonstrate that
this work is being completed in a timely manner until such time that the waiver is no
longer necessary.
2. Notify the Commission if Clearwater's internal metering and monitoring equipment is
not being maintained in such a way to ensure accurate billing based on each entity's
usage and the methods approved through the Commission's orders in this case.
3. Assess the need to amend the Clearwater special contract when Sofidel becomes an
Avista customer.
Staff does not recommend the Commission approve the Agreement as requested by the
Parties since the contract is between two private entities not under the Commission's jurisdiction.
Staff believes the Parties have sought a means to rectify a situation that was presented
due to the sale of a business, and Staff does not believe the request conflicts with the principles
and premises that the Rules and Regulations Governing Master Metering of Electric Service
("Master Metering Rules") Order No. 15556 were based upon.
Master Metering
In 1980, the Commission adopted the Master Metering Rules by Order No. 15556. The
Commission's decisions were based on the conservation goals of the Public Utility Regulatory
Policies Act of 1978, and the goals of"fostering and maintaining direct relations between
electric utilities and their customers and of equitable treatment of the ultimate consumers of
electricity." Order No. 34219 at 2 (quoting Order No.15556). The rules were based on four
premises:
1. Individually metered tenants who are responsible for paying their own
electric bills use less and waste less electricity than master-metered
tenants...;
2. The ultimate consumers of electric energy are better served by a direct
customer relationship with the utility than by disguising utility costs in the
rent or by the landlord playing the role of the public utility...;
3. It is inequitable for electric consumers to pay more or less than the cost of
electricity which they consume themselves...; and
4. The adoption of easily understood rules capable of immediate application
without lengthy or costly studies or analyses is a better means of drawing
reasonable lines allowing or disallowing master metering than rules based
STAFF COMMENTS 3 OCTOBER 15, 2024

upon complex cost-benefit analyses that ignore unquantifiable benefits of
individual metering.
Id.
Staffs review primarily focused on whether inequitable treatment could occur, where
Clearwater acting as the master-metered entity could potentially take advantage of Sofidel as a
sub-metered entity.
Metering and Data Processing System
Staff believes that: (1)the metering system to the Tissue Plant is isolated from the Paper
Plant; (2) the metering system is currently in-service; and(3) the output provided from the data
processing system will identify individual usage.
Staff reviewed the current submetering system installed in the Tissue Plant. The Tissue
Plant has electricity provided through Bus #7 and Bus#8. Two metering systems are installed in
Bus #7, and one is in the Bus#8. The metering system consists of a meter and a relay, and it can
measure peak demand as well as energy usage. Measurements from the metering system are
compiled with an integrated data processing system to collect, store, and manage the measured
data. The data processing system can provide total energy usage and peak 30-minute demand for
each month. Additionally, Staff reviewed the geographical location for the subsystem installed,
and Staff believes the current metering system in the Tissue Plant is installed and able to measure
the separate energy usage and demand.
Billing Process
In general, Staff believes the method Clearwater will use to bill Sofidel is reasonable,
provided the current Schedule 25P and 91 tariff rates are used as indicated through Clearwater's
responses to Production Request No. 3 and 4. However, Staff believes there is likely to be
potential billing discrepancies when applying demand charges separately between the two
entities. Staff also notes that the Schedule 25P tariff sheet Clearwater provided in response to
Production Request No. 3 is not the current version, and Clearwater should always use the rates
that are currently authorized under the two schedules.
Regarding potential billing discrepancies, Staff believes there will be billing issues
regarding the Minimum Demand Charge under Schedule 25P. How those will be allocated to
each entity are not defined and will require Clearwater and Sofidel to ensure that each company
STAFF COMMENTS 4 OCTOBER 15, 2024

is contributing appropriately. Additionally, Staff believes that it is likely that Sofidel and
Clearwater's peak demand will occur at different times during the month, and the sum of each
company's peak demand when measured separately will not equal the total coincident-peak
demand for the facility as a whole, which is the amount reflected in Avista's Clearwater bill.
Staff recommends that the Parties clarify how these discrepancies will be handled in an equitable
manner through a compliance filing.
The Agreement
The Parties have requested that the Commission approve the Agreement between
Clearwater and Sofidel that was submitted with the Petition. Staff does not recommend the
Commission approve the Agreement since it is between Sofidel and Clearwater, neither being a
regulated utility, thus not under the Commission's jurisdiction. However, Staff believes that the
Agreement is important because it eliminates the abuses that can exist between a customer who
master-meters power in a monopolistic way to sub-metered entities without regulation.
The Agreement outlines the bill payment process that has been agreed to by the two
companies. Outlined in the Agreement, Avista will continue to invoice Clearwater for the usage
within the facility as a whole and Clearwater will remit full payment. Clearwater and Sofidel
will work in a collaborative manner to verify, audit, and calculate charges for each based upon
the usage data provided by the existing on-site systems. Clearwater will be responsible for the
costs associated with the usage within the Paper Plant and Sofidel will be responsible for the
usage charges of the Tissue Plant. Agreement at 4.
The Petition affirms that Clearwater and Sofidel are each taking financial ownership of
its individual usage until the infrastructure is in place, in addition to asserting that"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 at 3.
Waiver Period
The Parties request the temporary waiver be in place until Avista can complete
construction of the new infrastructure and provide direct metering to both the Tissue Plant and
the Paper Plant. Avista estimates it may take three years to complete the design and construction
of the requisite electrical metering and delivery equipment for separate metering. Additionally,
STAFF COMMENTS 5 OCTOBER 15, 2024

Staff notes that both Clearwater and Sofidel are working collaboratively and have both
committed to accepting complete financial responsibility for the development and
implementation of the new infrastructure. Staff believes the request is reasonable, and Staff
recommends that the master metering waiver be valid until Avista can provide direct metering
for both Clearwater and Sofidel.
Clearwater Special Contract
Staff recommends that when Solfidel becomes a separate Avista customer, Avista should
reassess the need to amend its special contract with Clearwater. Staff is concerned there may be
provisions within the contract that could be affected by Clearwater's reduced load without the
Tissue Plant.
STAFF RECOMMENDATION
Staff recommends the Commission approve the Parties' requested temporary waiver of
Avista's Tariff prohibiting master-metering of electric services, until such time that infrastructure
is constructed necessary to separately deliver and meter power for Clearwater and Sofidel. Staff
recommends this waiver be conditioned on the Parties submitting a compliance filing clarifying
how billing discrepancies will be resolved as described above. Staff also recommends the
Commission order Avista to:
1. Submit infrastructure project status updates to Staff semi-annually to demonstrate that
work is being completed in a timely manner until the waiver is no longer necessary.
2. Notify the Commission if/when Clearwater's internal metering and monitoring
equipment is not being maintained in such a way to ensure accurate billing based on
each entity's usage based on the methods approved through the Commission's orders
in this case.
3. Reassess the need to amend the Clearwater special contract when Sofidel becomes an
Avista customer.
STAFF COMMENTS 6 OCTOBER 15, 2024

Respectfully submitted this 15th day of October 2024.
Chris Burdin
Deputy Attorney General
Technical Staff. Seungjae Lee, Vicki Stephens
I:\Utility\UMISC\COMMENTS\AVU-E-24-12 Comments.doex
STAFF COMMENTS 7 OCTOBER 15, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS _J!� DAY OF OCTOBER 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. AVU-E-24-12, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
PATRICK EHRBAR DAVID J MEYER
DIR OF REGULATORY AFFAIRS VP & CHIEF COUNSEL
AVISTA CORPORATION AVISTA CORPORATION
PO BOX 3727 PO BOX 3727
SPOKANE WA 99220-3727 SPOKANE WA 99220-3727
E-mail: patrick.ehrbar(a�avistacorp.com E-mail: david.meyergavistacorp.com
docketskavistacorp.com
PETER J RICHARDSON C TOM ARKOOSH
RICARDSON ADAMS PLLC ARKOOSH LAW OFFICES
515 N 27TH STREET PO BOX 2900
BOISE ID 83702 BOISE ID 83701
E-mail: peter cgricharsonadams.com E-mail: tom.arkooshkarkoosh.com
erin.cecilgarkoosh.com
PATRICIA JORDAN, CRETARY
CERTIFICATE OF SERVICE