200405265th Request of Potlatch to Avista.pdf

Conley E. Ward (ISB No. 1683)
GIVENS PURSLEY LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
Telephone No. [phone]
Fax No. [phone]
cew~givenspursley. com
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UTiLITIES COf'1-t:fj'SSION
Attorneys for Potlatch Corporation
S:\CLlENTS\54\Potlatch 5th Disc Req to Avista.DOC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN THE
STATE OF IDAHO.
Case Nos. A VU-04-
A VU -04-
POTLATCH CO RPO RA TI 0 N' S
FIFTH SET OF DISCOVERY
REQUESTS TO A VISTA
CORPORATION
YOU WILL PLEASE TAKE NOTICE that Potlatch Corporation ("Potlatch"), requests
that Avista Corporation ("Avista ) answer the following discovery requests in accordance with
the Idaho Public Utilities Commission s Rules of Procedure. Potlatch requests a response to
these requests within twenty-one days.
Definitions and Instructions
The interrogatories and document requests are governed by the following definitions and
instructions:
ORIGINAL
POTLA TCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 1 of9
DEFINITIONS
You
" "
your" or "A vista" means or pertains to the named respondent in this
matter and includes, without limitation, A vista, its officers, directors , employees
agents, attorneys, corporate subsidiaries and affiliates
Persons" means any and all natural persons, corporations, businesses, firms
companies, partnerships, unincorporated associations, governmental or public
agencies, joint ventures and all other entities, including, without limitation, all
employees, representatives, consultants and agents of any of the foregoing.
Documents" means any and all written, electronic or graphic matter, of any kind
or description, however created, produced, reproduced or stored, whether sent or
received, or whether originals, copies or drafts, including, but not limited to
every side of every page of all letters, papers, books, correspondence, bulletins
circulars, instructions, telegrams, cables, telex messages, facsimiles, memoranda
notes, notations, work papers, transcripts, minutes, reports, recordings of notes or
meetings, conferences, interviews or telephone or other conversations, affidavits
statements, summaries, opinions, studies, analyses, evaluations, work sheets
contracts, agreements, journals, statistical records, desk or pocket calendars
appointment books, diaries, lists, tabulations, advertisements, sketches, drawings
blue prints, catalogs, audio or video records, photographs, computer printouts, e-
mail transmissions, data processing input and output, deeds, microfilm, all other
records kept by electronic, photographic or electrical means, and things similar to
any of the foregoing however denominated.
POTLATCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 2 of 9
Relating to" or "Relate(s) to" means directly or indirectly mentioning, consisting
, evidencing, describing, referring to, pertaining to, being connected with, or
reflecting upon the stated subj ect matter.
The words "any" and "all" shall be considered to include each and every.
The singular of any word shall include the plural and the plural of any word shall
include the singular.
The word "expert" as used herein includes any person who will be offering expert
testimony on behalf of A vista or who has been consulted or relied upon by any
person who assisted in the preparation of the responses to these interrogatories
and document production requests or who will be offering testimony on behalf of
A vista in this matter.
Instructions
In answering these interrogatories and document requests, you are required to furnish all
information that is available to you, or subject to your reasonable inquiry, including the
information in the possession of you, your attorneys or other persons directly, or indirectly
employed by, or connected with, you or your attorneys, and anyone else other wise subject to
your control. In answering each interrogatory and document request:
Identify by title, heading or caption, date, sender, recipient, location and
custodian, each document relied upon, reviewed or which forms a basis for the response given or
which corroborates or relates to the response given or the subject of what is given in response to
these discovery requests;
POTLATCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 3 of 9
State whether the information furnished is within the personal knowledge of the
person responding and, if not, the name, if known, of each person to whom the information is a
matter of personal knowledge;
Identify each person who assisted or participated in preparing and/or supplying
any of the information given in response to or relied upon in preparing responses to these
discovery requests;
Where a discovery request calls for a response in multiple parts, each part should
be separated in the response so that the response is clearly understandable and complete;
Where the name or identity of a person is requested, state the full name, business
address, and any telephone numbers of each person;
If any of your responses require the production of documents, label the documents
to indicate the discovery request to which you are responding.
If you object to the production of any document called for in these document
requests, for each such document state the following: (1) the reasons for the objection and any
facts supporting the objection; (2) give a description of each document including, without
limitation, the date, sender, recipient(s), persons to whom copies have been furnished, job titles
of each of the persons, subject matter of the document, number of pages of the document, the
number( s) of the request to which such document is responsive and the identity of the person in
whose custody the document is presently located.
If any document is withheld under claim of privilege or work product, furnish a
list identifying each document for which the privilege or work product is claimed, together with
the following information for each such document: date, sender, recipient(s), persons to whom
copies were furnished, job titles of each of those persons, subject matter of the document,
POTLA TCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 4 of 9
number of pages of the document, the bases on which the privileges or work product is claimed
the paragraph(s) of these requests to which the document responds, the person in whose custody
the document is presently located, and whether any matter that is not privileged or is not work
product is discussed or mentioned in each document.
If any document requested was, but is no longer in the possession or subject to the
control of A vista, or is no longer in existence, state whether it: (1) is missing or lost; (2) has
been destroyed; (3) has been transferred voluntarily or involuntarily to others and state the
identity of the persons to whom it has been transferred; (4) has otherwise been disposed of, or in
each instance explain the circumstances surrounding such disposition, state the date or
approximate date thereof and the identity of the persons with knowledge of such circumstances;
(5) identify the documents that are missing, lost, destroyed, transferred or otherwise disposed of
by author, date, subject matter, addressee(s), and the number of pages.
If you do not clearly understand, or have any questions about, these definitions
instructions interrogatories or requests, contact counsel for Potlatch promptly for clarification.
These discovery requests are continuing in nature and require supplemental
responses upon the discovery or receipt of new or additional information.
Regarding the testimony of Dr. William T. Wilson:
REQUEST NO. 75: Provide a copy of all articles or treatises cited in the testimony in
their published forms.
REQUEST NO. 76: Regarding page 8 at 7-, please provide studies or other evidence
supporting the statement that "Today (the Sharpe ratio) is a universally accepted measure of
investment risk." Does Dr. Wilson maintain that the Sharpe Ratio is a universally accepted
measure of investment risk for asset returns, as opposed to a metric used to compare portfolios?
POTLA TCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 5 of 9
REQUEST NO. 77: Regarding page 12 at 7-, provide studies or other evidence that
the volatility of returns is the primary measure of risk. If Dr. Wilson did not intend to represent
that finance professionals use standard deviation of returns as the primary measure of risk, then
please clarify his testimony.
REQUEST NO. 78: (a) Regarding the 12 predictive variables, how did Dr. Wilson
account for the existence of purchased power/fuel adjustor mechanisms? (b) Did Dr. Wilson
account for any deferred accounting mechanisms? (c) Did Dr. Wilson examine other variables
or collect data on other variables and what were they?
REQUEST NO. 79: (a) Does Dr. Wilson agree that investors hold diversified
portfolios? (b) If the answer is yes, then does he agree that Sharpe s systematic risk is the
relevant measure of risk for asset pricing?
REQUEST NO. 80: (a) Does Dr. Wilson agree that his Sharpe Ratio calculation only
deals with the total risk of his universe of electric utilities. (b) Does he agree that his Sharpe
Ratio is best suited to investors who wish to choose only that one fund of electric utilities rather
than diversify?
REQUEST NO. 81: (a) Does Dr. Wilson agree that asset risk in the Sharpe model
depends on Pm (as defined in William Sharpe s reproduced article from The Journal of Portfolio
Management Fall 1994)? (b) Does Dr. Wilson agree that Sharpe Ratio will not by itself provide
sufficient information to price assets?
REQUEST NO. 82: Regarding the working papers, (Lettau and Uhlig article) please
provide Dr. Wilson s estimates of the elasticity of the preference-based stochastic discount
factor, the conditional standard deviation of consumption, and the elasticity of electric utility
returns with respect to consumption.
POTLA TCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 6 of 9
REQUEST NO. 83: What does Dr. Wilson believe or assume was investors ' investment
horizon for the period he calculated Sharpe Ratios?
REQUEST NO. 84: (a) Regarding page 14 at 5-, provide a more detailed explanation
of how Dr. Wilson specifically ranked the 113 companies. For example, what were the negative
variances" for the firms ranked highest risk, and how did Dr. Wilson rank firms whose
predicted results had a positive "variance" versus allowed return and what were those
variances ? (b) Provide the t statistics and standard deviations for the twelve coefficients
estimated. Provide the data and the statistical analysis in its original computer format if not
already provided in the general request for working papers in their original computer format. (c)
Clarify whether Dr. Wilson s "variances" were the residuals from the regression or describe how
these variances were otherwise calculated.
REQUEST NO. 85: What risk-free rates did Dr. Wilson use in calculating his Sharpe
Ratios for the period 1991 through 2002? Please provide the data and their description or source
along with the allowed ROEs if not already provided in the general request for working papers in
their original computer format.
DATED this 25th day of May 2004.
POTLA TCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 7 of9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 25th day of May 2004, I caused to be served a
true and correct copy of the foregoing document by the method indicated below, and
addressed to the following:
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
) U.S. Mail
(v1 Hand Delivered
) Overnight Mail
) Facsimile
Scott Woodbury
John Hammond
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
swoodbu~puc. state jd.
jhammon~puc.statejd. us
1 u.s. Mail
( vi) Hand Delivered
) Overnight Mail
) Facsimile
) E-Mail
David J. Meyer
Senior Vice President and General Counsel
A vista Corporation
O. Box 3727
1411 E. Mission Ave., MSC-
Spokane, W A 99220-3727
david. m eyer~avistacorp. com
( v"J U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
( JJ E-Mail
Kelly Norwood
Vice President, State and Federal Regulation
A vista Utilities
O. Box 3727
1411 E. Mission Ave., MSC-
Spokane, W A 99220-3727
kelly .norwood~avistacorp.com
( /J U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
( ~ E-Mail
Dennis E. Peseau, Ph.
Utility Resources, Inc.
1500 Liberty Street SE, Ste. 250
Salem, OR 97302
dpeseau~excite.com
) U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
( J) E-Mail
POTLATCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 8 of 9
Charles L.A. Cox
EVANS, KEANE
111 Main Street
O. Box 659
Kellogg, ID 83837
ccox~usamedia. tv
) U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
(v'J E-Mail
Brad M. Purdy
Attorney at Law
2019 N. ih Street
Boise, ID 83702
bm purd y~hotmail. com
) U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
( .tj E-Mail
Michael Karp
147 Appaloosa Lane
Bellingham, W A 98229
michael~awish.net
) U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
!I E-Mail
POTLATCH CORPORATION'S FIFTH SET OF DISCOVERY REQUESTS TO A VISTA
CORPORATION - Page 9 of