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HomeMy WebLinkAbout20040503Response of Avista to Staff.pdfAvista Corp. 1411 East Mission PO Box3727 Spokane, Washington 99220-3727 Telephone 509-489-0500 Toll Free 800-727-9170 April 30, 2004 ~~' 'V'STA. Corp. Idaho Public Utilities Commission 472 W. Washington St. Boise, ill 83720-0074 Attn: Scott Woodbury Deputy Attorney General .-i r_-~c~ ~ r;;:L (f)"C (") ~,.. oc~ :po::t 0) :J:. :t.r- C5(j)C; . r::"I (j) C; \-;0 iF rn fT1 (") Re:Sixth Production Request of the Commission Staff in Case Nos. A VU-04-01 and A VU-04- Mr. Woodbury, I have attached an original and three copies of Avista s response to Staff Data Request No(s). 20 Supplemental, 183 , 184, 185 , and 186. If you have any questions, please call me at (509) 495-4706. '):er Mike Fink Rate Analyst Enclosures Cc:Conley Ward (Potlatch) VISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO. Idaho A VU-O4-01 / A VU-O4- IPUC Data Request 20 Supplemental DATE PREPARED: WITNESS: RESPONDER: DEPARTMENT: TELEPHONE: 04/29/2004 Knox Tara Knox Rates (509) 495-4325 REQUEST: Are all Schedule 121 , 131 and 146 customers only served by mains larger than 4-inch? Please explain how this is verified and include all supporting documentation.. RESPONSE: Based upon additional review, not all customers on those schedules are only served by mains larger than 4 inches. Verification in the form of research on dedicated pipe serving each individual customer within these classes from engineering staff is attached, page 1. This information was determined from examination of plant associated with each customer s service location per the Company s geographic information system. If this information had been available before the case was filed, the attached workpaper, page 2 would have been prepared which would have supported the cost of service model input changes highlighted on the attached pages 3 and 4. Sc h e d u l e 1 2 1 , 1 3 1 , 1 4 6 a n d S p e c i a l C o n t r a c t Me t e r I n f o r m a t i o n f r o m C S S Me t e r Eq u i p T y p e A c c o u n t N o , Sc h e d u l e 1 2 1 / 1 2 2 Tw i n C i t y F o o d s RO T 63 2 9 5 5 Gr i t m a n M e d C t r RO T 83 0 7 3 7 Bl u e R i b b o n L a u n d r y RO T 92 2 1 0 1 Bo n n e r H o s p i t a l IN D 15 2 3 2 5 5 He c l a M i n i n g RO T 23 2 2 8 8 2 Ha r p e r s TB N 25 3 2 5 5 5 No , i l l E n e r g y L o g s IN D 25 0 0 1 9 0 6 6 Po e A s p h a l t TB N 61 0 0 3 6 7 2 7 St i m s o n L u m b e r - S e l t i c e RO T 25 0 0 4 9 5 3 4 St i m s o n L u m b e r - R i v e r A v e RO T 90 0 6 3 0 8 3 Sc h e d u l e 1 3 1 / 1 3 2 In t e r s t a t e C o n c r e t e & A s p h a l t TB N 23 1 8 0 9 9 St . J o s e p h ' s H o s p i t a l IN D 73 0 0 0 8 0 4 5 Sc h e d u l e 1 4 6 CD A F i b e r F u e l IN D 50 0 6 0 0 0 0 CD A R e s o r t RO T 74 2 4 5 7 Id a h o A s p h a l t IN D 77 0 0 1 0 7 7 1 In t e r s t a t e A s p h a l t RO T 61 0 0 1 6 1 6 1 Ko o t e n a i M e d i c a l C e n t e r TB N 33 0 0 1 9 0 8 9 Me r r i t t B r o s . L u m b e r RO T 45 0 0 4 8 7 4 2 Un i v . o f I d a h o TB N 22 0 0 0 4 3 Sc h e d u l e 1 4 7 !M C O ( f o r m e r l y I m s a m e t ) TB N 22 0 0 0 3 0 Li g n e t i c s TB N 21 0 0 0 1 9 Sc h e d u l e 1 5 9 / 1 6 9 Po t l a t c h Li s t e d a s F l a t R a t e S e r v i c e ( n o m e t e r i n f o s h o w n i n CS S ) C u s t o m e r o w n s m e t e r s di n f c GI S -- - nu u _ m u m _ _ _ n _n . - . - - - Se r v i c e P i p e De d i c a t e d M a i n Co n n e c t s t o C o m m o n M a i n Le n g t h Si z e Ty p e Le n g t h Si z e Ty p e Si z e Ty p e Fe e t In c h e s ST o r P E Fe e t In c h e s ST o r P E In c h e s ST o r P E 2 S T 61 5 2 S T 4 S T 2 S T 15 1 2 S T 2 S T 1 1 / 4 S T 2 S T 15 9 2 S T 2 S T 18 0 2 P E 4 S T 33 2 4 P E 6 P E 10 7 3 4 P E 6 P E 6 P E 17 5 8 6 P E 6 P E 81 0 4 S T 4 S T 3/ 4 P E 6 P E 31 7 4 P E 4 P E 4 S T 23 2 2 P E 4 S T 2 S T 15 3 2 P E 4 S T 4 P E 23 0 4 P E 4 S T 4 S T 37 8 4 P E 4 P E 28 6 4 S T 4 S T 10 5 2 S T 2 S T 66 3 4 P E 4 S T Me t e r e d a t M a i n 11 3 6 S T 6 S T 50 0 4 S T 4 P E 53 4 4 P E 4 S T 24 0 0 1 7 8 24 0 0 1 7 9 Cu s t o m e r t a p s d i r e c t l y o f f p i p e l i n e -; t J Av i s t a U t i l i t i e s Sm a l l M a i n A l l o c a t i o n F a c t o r s Id a h o G a s J u r i s d i c t i o n 12 M o n t h s E n d e d D e c e m b e r 3 1 , 2 0 0 2 Di r e c t A s s i g n Sm a l l M a i n T h r o u g h p u t Sm a l l M a i n D e m a n d Sc h e d u l e 1 2 1 Tw i n C i t y F o o d s 61 5 f t 2 i n S t e e l 60 0 Gr i t m a n M e d C t r sy s t e m 16 5 , 4 5 7 01 9 % 16 3 Bl u e R i b b o n L a u n d r y sy s t e m 17 1 95 1 29 4 % 20 8 Bo n n e r H o s p i t a l sy s t e m 16 8 78 0 16 0 % 18 6 Sm a l l m a i n S c h 1 2 1 50 6 18 8 21 . 4 7 3 % 55 7 21 . 4 7 3 % To t a l S c h 1 2 1 35 7 30 3 56 6 Sc h e d u l e 1 3 1 S1 . J o s e p h ' s H o s p i t a l 23 2 f t 2 i n P l a s t i c 56 8 20 f t 2 i n S t e e l $5 2 62 0 Sc h e d u l e 1 4 6 Ko o t e n a i M e d i c a l C e n t e r sy s t e m 48 4 14 5 11 . 52 8 % 80 8 37 0 % To t a l S c h 1 4 6 19 9 85 1 60 4 As s i g n AV I S T A U T I L I T I E S Na t u r a l G a s U t i l i t y Id a h o J u r i s d i c t i o n Co m p a n y B a s e C a s e Cl a s s A l l o c a t o r W o r k s h e e t 19 - Ja n - WA A c c e p t e d M e t h o d Fo r t h e Y e a r E n d e d D e c e m b e r 3 1 , 2 0 0 2 10 : 0 4 A M (b b ) (b c ) (b d ) (b e ) (b i ) (b g ) (b h ) (b i ) (b j ) (b k ) (b l ) (b m ) (b n ) (b o ) (b p ) Cl a s s Cl a s s Re s i d e n t i a l Sm a l l F i n n La r g e F i n n In t e I T U p t Tr a n s p o r t So u r c e De s c r i p t i o n Al l o c a t o r Al l o c a t o r Se r v i c e Se r v i c e Se r v i c e Se r v i c e Se r v i c e Na m e De s c r i p t i o n To t a l Sc h 1 0 1 Sc h I I I Sc h 1 2 1 Sc h 1 3 I Sc h 1 4 6 Op e n Op e n 1 Op e n 2 Op e n 3 Op e n 4 Co m m o d i t y A l l o c a t o r s EO ! Th r o u g h p u t 15 5 , 65 3 50 , 97 7 , 94 5 92 9 . 52 4 35 7 30 3 69 1 , 03 0 19 9 , 85 1 In p u t l T o m P r o f o n n a R e v e n u e S t u d y 10 0 , 00 0 % 71 . 6 4 3 % 18 . 17 1 % 31 3 % 97 1 % 90 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 2 Th r o u g h p u t E x c l S p e c C o n t 15 5 65 3 97 7 94 5 92 9 , 52 4 35 7 , 30 3 69 1 03 0 19 9 , 85 1 Al l S c h e d u l e s E x c e p t S p e c i a l C o n t r a c t 10 0 . 00 0 % 71 . 6 4 3 % 18 , 17 1 % 3. 3 1 3 % 97 1 % 90 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 3 Fi n n T h e n n s 26 4 77 2 97 7 94 5 92 9 , 52 4 35 7 , 30 3 Fi n n S c h e d u l e s 1 0 1 - 12 1 10 0 , 00 0 % 76 , 93 1 % 19 . 5 1 2 % 3. 5 5 7 % 0.0 0 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 4 Sa l e s T h e n n s 95 5 80 2 97 7 94 5 92 9 , 52 4 35 7 , 30 3 69 1 03 0 Sa l e s S c h e d u l e s 1 0 1 - 1 3 1 10 0 , 00 0 % 76 , 13 7 % 19 , 31 1 % 52 1 % 1. 0 3 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 5 In d u s t r i a l T h e n n s 24 8 18 4 35 7 30 3 69 1 , 03 0 19 9 , 85 1 Sc h e d u l e s 1 2 1 - 14 6 10 0 , 00 0 % 0. 0 0 0 % 00 0 % 53 4 % 57 , 94 3 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 6 Th e n n s - S m a l l M a i n s 89 7 80 2 50 , 97 7 , 94 5 92 9 , 52 4 06 , 18 8 C 4 8 4 , 1 4 5 - = = ' Sc h e d u l e s 1 0 1 - 1 I 1 + s y s t e m s m a l l ma i n c u s t 10 0 , 00 0 % 78 , 55 1 % 19 , 92 3 % 78 0 % 00 0 % 74 6 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 7 Pu r c h a s e d G a s - C o m m o d i t y 12 2 74 6 93 4 46 8 81 6 , 86 4 06 0 52 7 31 0 88 7 In p u t f r o m P r o f o n n a G a s S u p p l y 10 0 . 00 0 % 76 . 13 7 % 19 . 31 1 % 52 1 % 1. 0 3 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % E0 8 Op e n Op e n E0 9 Op e n Op e n De m a n d A l l o c a t o r s DO l Co i n c i d e n t P e a k - A l l 40 7 , 74 1 30 0 , 90 0 66 , 21 4 16 , 56 6 45 7 60 4 In p u t f r o m P e a k S t u d y 10 0 . 00 0 % 73 , 79 7 % 16 , 23 9 % 06 3 % 60 3 % 29 8 % 00 0 % 00 0 % 0.0 0 0 % 0. 0 0 0 % 00 0 % D0 2 Co i n c i d e n t P e a k - S m a l l M a i n s 37 2 , 47 9 30 0 , 90 0 66 , 21 4 C 1 80 8 Sc h e d u l e s 1 0 1 - 11 1 + s y s t e m s m a l l m a i n c u s t 10 0 , 00 0 % 80 . 78 3 % 17 , 77 7 % 95 5 % 00 0 % 0. 4 8 5 % 00 0 % 0. 0 0 0 % 0.0 0 0 % 00 0 % 00 0 % D0 3 Co i n c i d e n t P e a k - I n d 62 7 56 6 45 7 21 , 60 4 Sc h e d u l e s 1 2 1 - 14 6 10 0 , 00 0 % 00 0 % 00 0 % 40 , 77 6 % 04 8 % 53 , 17 6 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % D0 4 Co i n c i d e n t P e a k F i n n 38 3 , 68 0 30 0 , 90 0 66 , 21 4 16 , 56 6 In p u t l T o m P e a k S t u d y 10 0 , 00 0 % 78 . 4 2 5 % 17 , 25 8 % 31 8 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % D0 5 Pu r c h a s e d G a s - D e m a n d 51 5 21 6 24 2 89 4 07 6 , 12 4 19 6 , 19 8 In p u t f r o m P r o f o n n a G a s S u p p l y 10 0 , 00 0 % 76 , 93 1 % 19 . 51 2 % 55 7 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % D0 6 10 0 10 0 D0 7 10 0 GQ ? 10 0 D0 8 10 0 Cu s t o m e r A l l o c a t o r s CO I Al l C u s t o m e r s 70 5 , 12 7 69 8 , 03 2 86 7 12 0 Un w e i g h t e d C u s t o m e r s 10 0 . 00 0 % 98 . 99 4 % 97 4 % 01 7 % 00 3 % 01 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % CO 2 Se r v i c e C o s t 70 6 , 91 5 69 8 , 03 2 86 7 84 0 16 8 00 8 Wt d A v g S e r v i c e C o s t 10 0 , 00 0 % 98 , 74 3 % 97 1 % II 9 % 02 4 % 14 3 % 0. 0 0 0 % 00 0 % 00 0 % 00 0 % 00 0 % C0 3 Me t e r C o s t 80 4 86 2 69 8 , 03 2 13 8 92 0 65 6 11 6 We i g h t e d A v e r a g e M e t e r C o s t 10 0 . 00 0 % 86 . 72 7 % 11 . 9 4 5 % 6I I % 20 6 % O.5 I I % 00 0 % 00 0 % 00 0 % 0. 0 0 0 % 0. 0 0 0 % C0 4 Re g u l a t o r C o s t 70 5 12 7 69 8 , 03 2 86 7 12 0 Op e n 10 0 . 00 0 % 98 , 99 4 % 97 4 % 01 7 % 00 3 % 01 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % C0 5 In s t a l l a t i o n s C o s t 70 5 , 12 7 69 8 , 03 2 86 7 12 0 Op e n 10 0 , 00 0 % 98 , 99 4 % 97 4 % 01 7 % 00 3 % 01 2 % 00 0 % 00 0 % 00 0 % 0. 0 0 0 % 00 0 % C0 6 In d M e a s & R e g C o s t 22 8 12 0 Sc h e d u l e s 1 2 1 - 14 6 10 0 . 00 0 % 00 0 % 00 0 % 52 . 63 2 % 10 , 52 6 % 36 , 84 2 % 00 0 % 00 0 % 00 0 % 00 0 % 00 0 % Ex h i b i t 1 7 , S c h e d u l e 5 28 o f 5 8 T. K n o x Fi l e : 1 0 0 4 G a s C a s e ca s As s i g n G 2 i n m a i n , xl s Av i s t a C o r p o r a t i o n As s i g n Co m p a n y B a s e C a s e 3 W A Ac c e p t e d M e t h o d Pr o d u c t i o n F l U 1 c t i o n F a c t o r T a b l e ( p f a c t o r ) 10 C l a s s Fa c t o r N a m e II To t a l F a c t o r 12 E O I Th r o u g h p u t 13 0 0 4 Co i n c i d e n t P e a k F i r m 14 E 0 4 Sa l e s T h e r m s 15 E O I Th r o u g h p u t 16 x x x Op e n 22 0 0 4 23 E O I 24 E 0 4 29 0 0 1 30 0 0 2 31 E O I 32 E 0 6 33 0 0 6 34 0 0 7 35 0 0 8 36 x x x 37 x x x 38 x x x 43 C O I 44 C O 2 45 C 0 3 46 C 0 4 47 C 0 5 48 C 0 6 49 C 0 7 50 C 0 8 51 x x x 52 x x x (a h ) (a i ) Un d e r g r o l U 1 d S t o r a g e F l U 1 c t i o n F a c t o r T a b l e (u f a c t o r ) Cl a s s Fa c t o r N a m e VO l To t a l F a c t o r Co i n c i d e n t P e a k F i r m Th r o u g h p u t Sa l e s T h e r m s Di s t r i b u t i o n F l U 1 c t i o n F a c t o r T a b l e ( d f a c t o r 1 ) Cl a s s Fa c t o r N a m e To t a l F a c t o r Co i n c i d e n t P e a k - A l l Co i n c i d e n t P e a k - S m a l l M a i n s Th r o u g h p u t Th e r m s - S m a l l M a i n s Di r e c t 1 3 1 Di r e c t 1 4 6 Ui r e c t 1 2 1 : ) Op e n Op e n Op e n Di s t r i b u t i o n F l U 1 c t i o n F a c t o r T a b l e ( d f a c t o r 2 ) Cl a s s Fa c t o r N a m e To t a l F a c t o r Al l C u s t o m e r s Se r v i c e C o s t Me t e r C o s t Re g u l a t o r C o s t In s t a l l a t i o n s C o s t In d M e a s & R e g C o s t Di r e c t 8 c h 1 3 1 Di r e c t S c h 1 4 6 Op e n Op e n Rle : I D 0 4 G a s C a s e CO S As s i g n G 2 i n m a i n . xl s AV I S T A U T I L I T I E S FlU 1 c t i o n a l A l l o c a t i o n T a b l e s Fo r t h e Y e a r E n d e d D e c e m b e r 3 1 , 2 0 0 2 (a j ) (a k ) (a l ) (a m ) (a n ) De m a n d PO I 10 0 St o r a g e Op e n P0 2 P0 3 P0 4 10 0 10 0 10 0 10 0 10 0 Co m m o d i t y A c c t 8 0 7 U0 2 10 0 10 0 U0 3 10 0 U0 4 TO I T0 2 T0 3 T0 4 T0 5 31 1 7 8 10 0 10 0 0 5 2 , 52 . ;i P -'- 47 , 47 . .. . ... . - 1. C! : 37 6 S M 37 6 L G Pe a k & A y g In d P & A Tl I Tl 2 Tl 3 Tl 4 Tl 5 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 Se r v i c e s Me t e r s I n s t a l l a t i o n s Re g u l a t o r s In d M & R Na t u r a l G a s U t i l i t y Id a h o J u r i s d i c t i o n 19 - Ja n - 10 : 0 4 (a o ) (a p ) (a q ) (a r ) (a s ) (a t ) (a u ) (a y ) (a w ) (a x ) P0 5 T0 6 d~ ~ O d - ~ ' 33 -~ ' f ~. 5 ~ I I I 'is a. . f l 3 / / ; o o T0 7 T0 8 T0 9 Tl O Tl 6 Tl 7 TI 8 TI 9 T2 0 Ex h i b i t 1 7 , S c h e d u l e 5 T. K n o x Av i s t a C o r p o r a t i o n 31 o f 5 8 JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO. REQUEST: AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION Idaho AVU-04-0l / AVU-04- IPUC Data Request Staff 183 DATE PREPARED: WITNESS: RESPONDER: DEPARTMENT: TELEPHONE: 04/2612004 Malyn Malquist Adam Munson Finance (509) 495-2471 Please provide a month-to-month analysis reconciling the assets of the Retirement Plan for Employees of Avista Corporation on a cash basis for the months of January - December 2003. RESPONSE: A reconciliation of the plan assets (on the cash basis) is included in the footnotes of our audited financial statements. We have attached a copy of this footnote for your reference. A VISTA CORPORATION amount of unrecognized prior service cost) related to the pension plan. This resulted in an increase to other comprehensive income of $9.7 million, net of taxes of $5.2 million for 2003. In 2002, the Company recorded an additional minimum liability for the unfunded accumulated benefit obligation of $33.4 million and an intangible asset of $6.4 million (representing the amount of unrecognized prior service cost) related to the pension plan. This resulted in a charge to other comprehensive income of$17.6 million, net of taxes of$9.4 million for 2002. The Company also has a Supplemental Executive Retirement Plan (SERF) that provides additional pension benefits to executive officers of the Company. The SERF is intended to provide benefits to executive officers whose benefits under the pension plan are reduced due to the application of Section 415 of the Internal Revenue Code of 1986 and the deferral of salary under deferred compensation plans. The Company recorded an additional minimum liability for the unfunded accumulated benefit obligation of $0.3 million, $0.7 million and $1.1 million related to the SERF for 2003, 2002 and 2001 , respectively. This resulted in a charge to other comprehensive income of $0.2 million, $0.5 million and $0.7 million, net of taxes, for 2003 2002 and 2001 , respectively. The Company provides certain health care and life insurance benefits for substantially all of its retired employees. The Company accrues the estimated cost of postretirement benefit obligations during the years that employees provide services. The Company elected to amortize the transition obligation of$34.5 million over a period of twenty years, beginning in 1993. The Company uses a December 31 measurement date for its pension and postretirement plans. The following table sets forth the pension and postretirement plan disclosures as of December 31 2003 and 2002 and the components of net periodic benefit costs for the years ended December 31 2003 2002 and 2001 (dollars in thousands): Pension Benefits2003 2002 Post- retirement Benefits 2003 2002 $29 062 $36 355 482 304 477 184 821) 973 (660) 741)091) --1QID (209) $39.185 $29.062 $11 301 $13 969 282 (1,451) 785 713)008) ---1QID (209) $14.587 $11.301 $(24 598)$(17 761) 455 425 809 788 334)548) $(6.$(6.548) $26 073 $21 582 427 297 685 183 59%51% 41%38% 11% Change in benefit obligation: Benefit obligation as of beginning of year............... Service cost """""""""""""""""""""""""""""'" Interest cost .........................................................".. Plan amendment """"" """""""""""""""""""""" Actuarial loss (gain) ................................................ Benefits paid............................................................ Expenses paid ............................................."........... Benefit obligation as of end of year """""""""""'" -f Change in plan assets: Fair value of plan assets as of beginning of year ..... Actual return on plan assets..................................... Employer contributions ...............................,........... Benefits paid............................................................ Expenses paid ...,...................................................... Fair value of plan assets as of end of year ............... Funded status ........................................................... Unrecognized net actuarial loss ............................... Unrecognized prior service cost ...."........................ Unrecognized net transition obligation/(asset) ........ Accrued benefit cost .............................................,.. Additional minimum liability .................................. Accrued benefit liability """"""""""""""""""""" Accumulated pension benefit obligation ................. Accumulated postretirement benefit obligation: For retirees ...................................................."... For fully eligible employees............................... For other participants """""""""""""""""""'" Weighted-average asset allocations as of December 31 Equity securities ................................................,..... 64% Debt securities """""""""""""""""""""""""""'" 25% Real estate ...oo........................................,................. Other """""""""""""""""""""""""""""""""""" 6% $238 385 806 705 046 (12 648) 504) $265.790 $136 125 129 000 (11 788) 0.504) $167962 $(97 828) 695 712 (1.585) (22 006) (20.081 ) $(42.087) $210 049 $210 510 734 119 530) 243 (12 229) 0.462) $238.385 $153,705 (16 677) 000 (11 441) (1.462) $136.125 $(102 260) 79,812 366 (2.671 ) (18 753) (35.303) $(54.056) $190,181 65% 32% VISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO. Idaho A VU-O4-01 / A VU-O4- IPUC Data Request Staff 184 DATE PREPARED: WITNESS: RESPONDER: DEP ARTMENT: TELEPHONE: 04/26/2004 Malyn Malquist Adam Munson Finance (509) 495-2471 REQUEST: Please provide the actuarial report and calculations used to determine the 2004 F AS 87 Pension Expense of$14 million referred to on page 24 of Mr. Falkner s direct testimony. RESPONSE: Our 2004 actuarial report has not yet been completed by our external actuaries. We anticipate this report will be finalized prior to September 2004. The assumptions used to estimate the 2004 pension expense were included previously in data request no. 155. VISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO. Idaho A VU-O4-01 / A VU-O4- IPUC Data Request Staff 185 DATE PREPARED: WITNES S RESPONDER: DEPARTMENT: TELEPHONE: 04/28/2004 Don Kopczynski Randy Cloward Trans. Ops. (509) 495-4619 REQUEST: It appears that Avista is not a member of the Western Electricity Coordinating Council (WECC). As indicated on WECC's website homepage "Membership in WECC is voluntary and open to any organization having an interest in the reliability of interconnected system operation or coordinated planning." Staff notes that Idaho s two other major electric utilities, PacifiCorp and Idaho Power, are members. Please indicate Avista s reasons for not being a member and explain how the Company, its customers and the western region are affected by Avista s decision to not participate. RESPONSE: In April 2002, Avista notified the WECC of its decision to decline membership. Please see the attached letters from Avista to Mr. Dennis Eyre, WECC, dated April 27, 2002 and July 22 2003 which outline A vista s decision and issues. As additional explanation, when the WECC was created, several key by-law revisions of significance resulted, including removal of an express by-law provision that had made it clear that a member could not be required to operate or construct facilities for the benefit of another utility system. Another express concern with WECC membership was the potential that the WECC could and would use reliability management standards (RMS), as adopted and as still evolving within the organization, to force construction or operation for the benefit of remote utility systems and/or to compromise the ability to serve native load customers, to the ultimate detriment of Avista s customers. Avista has also expressed, and specifically addressed with the WSCC and later with the WECC, concerns that the RMS could and would become the basis for establishment of a legal duty and a "standard of care" to customers and non-customers, together with a process and methodology for determining breach of such standard of care to increase liability risk exposure for A vista absent express limitations on any such liability. Along with other NW utilities, Avista has solicited WECC support in obtaining liability protection for large-scale outage events, similar to what has been since experienced with the Northeast Blackout. It has suggested the need for measures to provide some degree of Response to Staff Request No. 185 Page 2 confidentiality of the WECC reporting, investigation and enforcement process. A vista has requested adoption of the by-law provision that would make it clear that a member could not be required to compromise its ability to serve native load or build facilities for the benefit of third parties without compensation through use or implementation of WECC reliability standards. (Procedures already exist under the Federal Power Act for accomplishing such with compensation, and further exist for signatory members under the WIS Agreement.) Avista has further suggested specific remedies as available in other contexts, such as military accident investigation, to insure that WECC staff will not be subject to civil subpoena or that its processes will be ultimately compromised and/or utilized as a surrogate for plaintiff attorneys in civil litigation. Some Progress has been made at FERC in obtaining recognition ofthe need for liability protection. In the interim, A vista continues to apply all NERC and WECC reliability standards to its operations and continues to cooperate and participate with the WECC on a voluntary non- voting basis. A vista also continues to participate with other control areas in the region as a subscriber to the Western Interconnected Electric Systems (WIS) Agreement and the Pacific Northwest Security Coordination Agreement. It is the Company s position, that by not being a WECC member, Avista and its customers are presently minimizing unacceptable liability risks while making sure that reliability standards will not be used to force construction of additional facilities without compensation, or used to impair A vista s ability to continue to meet native load requirements to the potential detriment of its ratepayers in Idaho and Washington. As such, the company believes there is no impact in regional reliability and that our customers are best served by this approach until these issues are resolved. Avista further expects that the referenced by-law provisions will have to be ultimately corrected by action of the WECC if it is to meet the requirements for an electric reliability organization under terms of reliability legislation presently pending before Congress. Avista Corporation 1411 East Mission P,O. Box 3727 Spokane, Washington 99220-3727 Telephone 509-489-0500 Toll Free 800-727-9170 ~'iI'STA. Corp. April 24, 2002 Mr. Dennis E. Eyre Western Electricity Coordinating Council University of Utah Research Park 615 Arapeen Drive, Suite 210 Salt Lake City, UT 84108 RE:Declination of WECC Membership Dear Dennis: On behalf of A vista Corporation (A vista) this is to advise you that it is the decision of the company to decline WECC Membership as of the present time. Key to this decision is Section 4.9 of the WECC By-laws which obligates a Member to ... all standards or decisions of the WECC". This establishes new legal duties that, when coupled with the present inability to obtain continuity of transmission service tariff limitations on liability at FERC, creates an unacceptable risk for A vista. In addition , the elimination of express by-law provisions making it clear that Avista would not be required to constructor dedicate facilities for the benefit of any other Member, and would not be required to take actions affecting reliability for its native load also weighed heavilyin this consideration. A vista will continue with efforts to obtain appropriate continuity of service tariff limitations at FERC and keep NERC informed as to our progress. A vista is actively involved in RTO West formation and is continuing this work in compliance with Order 2000. Depending upon the course of future events, we will re-visit this decision onWECC Membership. The Company remains committed to meeting the requirements of Open Access under Order 888 and to continued reliability of its interconnected transmission system. In the interim, you can be assured of A vista s continuing cooperation with the WECC and with its Members in efforts to address and resolve regional energy issues pursuant to the Western Interconnected Systems Agreement Limiting Liability (WIS Agreement) and other agreements governing its transmission operations, consistent with the requirements of regulatory authorities governing its present operations. A vista is currently involved in several WSCC technical committees including planning, operations, and market design. Avista has always been an active member in these groups Dennis E. Eyre Page 2 of 2 and wiII continue its involvement to the extent allowed. We believe that we have provided valuable input into the formation of the current WSCC standards and processes and are willing to continue to provide input in future WECC activities. I look forward to working with you as A vista works to resolve the key issues that currently prevent us from joining WECc. Congratulations on the formation of the new organization and feel free to call me with any questions. ~CkJ~ Randy Cloward WSCC Council Representative Pat Lynch (Avista Corporation) David Meyer (A vista Corporation) Lloyd Meyers' (A vista Corporation) Roger Woodworth (A vista Corporation) Paul Kjellander (IPUC) Don Stone (Paine-Hamblen) Michehl Gent (NERC) Marilyn Showalter (WUTC) Avista Corporation 1411 East Mission P,O. Box 3727 Spokane, Washington 99220-3727 Telephone 509-489-0500 Toll Free 800-727-9170 ~~~'V'STA. Corp. July 22, 2003 Mr. Dennis E. Eyre Western Electric Coordinating Council University of Utah Research Park 615 Arapeen Drive, Suite 210 Salt Lake City, UT 84108-1262 Re:Avista's Proposed By-Law Changes for Consideration by WECC Dear Dennis: In follow-up to our June 16,2003, meeting attending by Jack King, Ron Nunnally, Marsha Smith, Chris Nelson, Don Stone, and myself, Avista would like to recommend consideration of the following By-Law changes to accommodate Avista membership: Adoption of New By-Law Provision It is requested that consideration be given to adoption of a new sub-section under present section 15 "Miscellaneous Provision" which would read as follows: "Each Member shall retain sole control of its facilities and the use thereof, and in no event shall a Member be required to construct or dedicate facilities for the benefit of any other Member, or be required to take action, or refrain from action, as may be deemed necessary to maintain reliable service to its own customers and/or to fulfill its obligations to third parties. Explanation: This recommendation incorporates the substance of previous Article XI of the WSCC Agreement and By-Laws, but with effort to clarify the perceived ambiguities in the previous Article XI. Adoption of this measure would further meet the requirements of Section 218(i)(2) of HR 61 and Section 217 of HR 6. This section does not authorize the Electric Reliability Organization or the Commission to order the construction of additional generation or transmission capacity or to set and enforce compliance with standards for adequacy or safety of electric facilities or services.2 "Service obligations of load serving entities. It is requested that paragraph 15.1 be amended in line 6 to add , " or to third parties " after the word "Members" in line 6 of paragraph 15. It is further requested that the words, "gross negligence, or willful misconduct" be inserted in the last line of paragraph 15.1 after the word "negligence. Explanation: The purpose of these proposed amendments is to clarify that the WECC process will not be used as a basis for determination of liability to Members or third parties. FERC has further indicated following the SMD Technical Conference on Liability that it is likely to adopt tariff limitations on liability except for gross negligence or willful misconduct " The purpose of this proposed change is also to help ensure that the WECC reliability standards and process does not become a basis for liability for negligence gross negligence, or willful misconduct, and that the remedies are solely as set forth in the By-Laws. Such is further consistent with paragraph 15.3 (no third party beneficiaries) . While the foregoing are the only By-Law proposals necessary for Avista to join the WECC, A vista would strongly encourage the WECC Board, staff and Members to accomplish the following: 3. Investigate and support adoption of legislation to the effect that the evidentiary record, and/or the required reporting, staff investigation, and staff findings on any violation of reliability criteria can be effectively prohibited from use as evidence in subsequent civil proceedings. . . to include express prohibition of WECC staff from being subject to subpoena to testify in civil proceedings regarding the subject matter of reliability criteria and/or specifics of their investigations, findings or recommendations. (Support for such limitations exist in several federal statutes where matters have held safety and immediate welfare of the public, unfettered by engagement in civil tort litigation. 4. Incorporate allowance of the equivalent of a "nolo contendere" response to a reliability criteria violation/enforcement action that will enable a party to the RMS Agreement to effectively pay the assessment but not "admit" wrongdoing for purposes of subsequent civil litigation, and to permit similar response outside of RMS agreements pursuant to these By-Laws. 5. Investigate the feasibility of an ability to "post bond" under terms of the RMS Agreement in the amount of the proposed penalty in response to an assessed reliability criteria violation, and then to permit forfeit use of such bond without any admission of wrongdoing for purposes of avoiding such response as any admission of liability for purposes of subsequent civil litigation. 6. Support the need for liability protection from outage events before Congress and the FERC, and in the event that it is determined that enabling legislation and/or FERC regulation is needed to implement the foregoing, actively support its adoption. We would be willing to work with WECC to attempt further refinement of the foregoing proposals, and would make research available to WECC counsel to assist in formulating action plans with respect to these other measures in effort to avoid the WECC process from being used to promote civil liability. We appreciate the opportunity of meeting with you with the hope that Avista can become a member of the WECC. 6ZJ;~J Randy Cloward VISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO. Idaho A VU-O4-01 / A VU-O4- IPUC Data Request Staff 186 DATE PREPARED: WITNESS: RESPONDER: DEPARTMENT: TELEPHONE: 04/28/2004 Don Kopczynski Randy Cloward Trans. Ops. (509) 495-4619 REQUEST: What are the annual WECC membership fees? RESPONSE: Each year the WECC establishes a budget, which is a combination of administrative and security expenses. The budget is then prorated, across the control areas, based upon the "Control Area Net Energy for Load (MWh)" plus a $5 000 Annual Full Member Dues Assessment for each control area that is a full member. A vista has not been a member since the WSCC became the WECC in April 2002. Because of that we did not receive "annual" invoices in either 2003 or 2004 (usually invoiced in late January each year). Listed below are the WSCC/WECC fees A vista paid in the years noted. Year 2000 Fees Paid $173 136 to WSCC ($89 705 for admin. & $83 431 for system security) $180 243 to WSCC ($95 529 for admin. & $84 714 system security)2001 2002 $43 889 to WSCC for Jan - March ($25 768 &. $18 131 for system security), plus $30 408 to WECC for the remainder of2002 for a portion of the system security for only the Pacific Northwest Security Coordinator (PNSC). 2003 $36 806.82 to WECC (for a portion of system security for only the PNSC).