The URL can be used to link to this page

Home My WebLink About200407072nd Response of Staff to Avista.pdfSCOTT WOODBURY DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0320 BAR NO. 1895 Street Address for Express Mail: 472 W. WASHINGTON BOISE, IDAHO 83702-5983 Attorney for the Commission Staff C;~ECE'VED F:'fLED -::, , 20n~ JUt - 7 Pr; 3: 2'" i!U 1 U UT ILITIES COrlHJSSfON 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- COMMISSION STAFF RESPONSE TO THE SECOND PRODUCTION REQUEST OF A VISTA CORPORATION The Staff of the Idaho Public Utilities Commission, by and through its attorney of record Scott Woodbury, Deputy Attorney General, hereby responds to Avista Corporation s (Avista; Company) First Request for Production to the Idaho Public Utilities Commission Staff filed June 29, 2004. Request No. 10: At page 7, line 13 of Mr. Hessing s direct testimony he writes , " Staff concluded that appropriate safeguards were not in place or followed to protect customers when the regulated utility does business with its affiliate ? Please provide copies of the statute, order, rule or guideline upon which Mr. Hessing was basing his statement regarding "appropriate safeguards. Response No.1 0: Because A vista Utilities assured Commission Staff that there would be no regulated electric utility business dealings with affiliates, and because no notice or filing was made with the Commission proposing such transactions, there are no written statutes, orders, rules or ST AFF RESPONSE TO THE SECOND PRODUCTION REQUEST OF A VISTA JULY 7, 2004 guidelines that address this issue. No case was initiated and no Commission direction regarding such transactions was produced. However, in a similar situation, when A vista Utilities requested that it be allowed to purchase natural gas for its gas customers from its affiliate A vista Energy, a case was initiated and rules of conduct were established that allowed the business transactions and protected customers. Had the Commission been informed that the Company s regulated electric business intended to do business with an affiliate a similar process would have occurred. Request No. 11: At page 7, line 15 of Mr. Hessing s direct testimony he writes , " Safeguards could include a proper Code of Conduct or a requirement for lower-of-cost-or market pricing." What statute, order, rule or guideline was Mr. Hessing relying on that requires Avista Utilities have a Code of Conduct in place covering natural gas purchases or financial transactions with its affiliate A vista Energy for fuel supply for electric generation? Please provide a copy of all relevant documents. Response No. 11: Again, there are no written statutes, orders, rules or guidelines for this specific situation for the reasons stated in response No.1 O. Because of self-dealing questions , the prudence of transactions between affiliates is examined. A filing with the Commission before such transactions occur allows the Commission to establish the rules under which cost recovery may occur. In that process the Commission also considers customer safeguards. Request No. 12: At page 7, line 15 of Mr. Hessing s direct testimony he writes , " Safeguards could include a proper Code of Conduct or a requirement for lower-of-cost-or market pricing." What statute, order, rule or guideline was Mr. Hessing relying on which requires A vista Utilities to receive a price for physical or financial natural gas transactions at the lower of cost or market when securing fuel supply for electric generation from its affiliate A vista Energy? Please provide a copy of all relevant documents. Response No. 12: Again, there are no written statutes, orders, rules or guidelines for this specific situation for the reasons stated in Response No.1 O. Because of self-dealing questions, the prudence of transactions between affiliates is examined. Staff s proposal to give customers the lower price, cost or market, in Deal "B" transactions safeguards customers in this situation where serious self-dealing questions have been raised. Staff believes that FERC established the lower of cost or STAFF RESPONSE TO THE SECOND PRODUCTION REQUEST OF A VISTA JULY 7, 2004 market guideline when addressing affiliate transactions. If Staff can locate that reference it will be provided to the Company in a supplemental response to this question. Other FERC comments regarding affiliate transactions and the potential for self-dealing have also been reviewed by Staff. Reference Boston Edison Company re: Edgar Electric Energy Company, FERC Docket No. ER91- 243-000, 55 FERC ~ 61 382 (1991); Southern California Edison Co. on behalf of Mountainview Power Co., LLC, FERC Docket No. ER04-316-000, 106 FERC ~ 61 183 (2004). Request No. 13: At page 16, line 2, of Mr. Hessing s direct testimony he writes , " It is Staffs position that the Company violated both the intent and the written requirements of its own Energy Resources Risk Policy." What portions of, or wording from, the Company s Risk Policy did Mr. Hessing rely upon to support his conclusion that A vista violated the written requirements of its own Energy Resources Risk Policy? Response No. 13: Section E of the Company s Energy Resources Risk Policy contains four subsections. It is Staffs position that Avista s Deal "B" violated one or more of the written provisions under each of the four sections. For example: The Company did not transact toward zero. During the period that the deal was priced at index, the Company did not properly calculate the imbalance. V olumetric limits were exceeded and the time to cure was ignored. (Staff Confidential Exhibit No. 139, Page 32-34 of 50). Dated at Boise, Idaho, this 7h day of July 2004. Scott Woodbury Deputy Attorney General Technical Staff: Keith Hessing T em Carlock i:umisc:prodreq/response/avueO4.avugO4.1sw staff response 2 to av STAFF RESPONSE TO THE SECOND PRODUCTION REQUEST OF A VISTA JULY 7, 2004 CERTIFICATE OF SERVICE HEREBY CERTIFY THAT I HAVE THIS 7TH DAY OF JULY 2004 SERVED THE FOREGOING COMMISSION STAFF RESPONSE TO THE SECOND PRODUCTION REQUEST OF A VISTA CORPORATION, IN CASE NO. A VU-04-lIA VU-04-, BY MAILING A COpy THEREOF POSTAGE PREPAID TO THE FOLLOWING: DAVID J. MEYER SR VP AND GENERAL COUNSEL VISTA CORPORATION PO BOX 3727 SPOKANE WA 99220-3727 E-mail dmeyer~avistacorp. com KELLY NORWOOD VICE PRESIDENT STATE & FED. REG. AVIS T A UTILITIES PO BOX 3727 SPOKANE WA 99220-3727 E-mail Ken y .norwood~avistacorp. com CONLEY E WARD GIVENS PURSLEY LLP PO BOX 2720 BOISE ID 83701-2720 E-mail cew~givenspursley.com DENNIS E PESEAU, PH. D. UTILITY RESOURCES INC 1500 LIBERTY ST SE, SUITE 250 SALEM OR 97302 E-mail dpeseau~excite.com CHARLES L A COX EV ANS KEANE 111 MAIN STREET PO BOX 659 KELLOGG ID 83837 E-mail ccox~usamedia. tv BRAD M PURDY ATTORNEY AT LAW 2019 N 17TH ST BOISE ID 83702 E-mail bmpurdy~hotmail.com CERTIFICATE OF SERVICE