20160906AVU to Staff 118.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/25/2016
CASE NO.: AVU-E-16-03 WITNESS: William Johnson
REQUESTER: IPUC RESPONDER: William Johnson
TYPE: Production Request DEPARTMENT: Power Supply
REQUEST NO.: Staff - 118 TELEPHONE: [phone]

REQUEST:

Please explain the Company’s decision making process and methodology in utilizing the RECs generated by Palouse Wind.  At a minimum, please include how decisions are made to use Palouse RECs : 1) to meet Washington State RPS requirements, 2) to take advantage of the 20% bonus for Washington State Apprenticeship Credits , 3) for the sale of Palouse Wind RECs to third parties, and 4) to use of Palouse Wind RECs in meeting the Washington State RPS in lieu of other sourced RECs.

RESPONSE:

Through 2015, the Washington renewable portfolio standard (RPS) requirements have been met with qualifying hydro upgrades and other wind RECs purchased under contract and paid for by Washington customers. No Palouse RECs have been used for WA RPS compliance through 2015. All Palouse RECs from 2012 through 2015 were sold, and therefore all bonus Apprenticeship Credits went unrealized as we can’t bifurcate the REC from the apprenticeship bonus.  Please refer to the Company’s response to Staff_PR_117 for more details about the bonus Apprenticeship Credit program.

Avista will meet future Washington RPS requirements by first using qualifying hydro upgrades as those are REC offsets that cannot be banked and must be used in the year generated. Next, Palouse Wind RECs will be used as the 20% bonus Apprenticeship Credit provided by Washington State for Palouse Wind RECs applies. Any surplus Palouse Wind RECs not used for Washington RPS compliance will either be sold to third parties or banked for future compliance use. Third in line for WA RPS compliance will be Kettle Falls biomass RECs as those are also California eligible and are easier to schedule to California as a bundled energy/REC product to maximize their REC value for the benefit of customers.

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