20260723Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: YAO YIN, COMMISSION STAFF
KELSEA E. ROSS, DEPUTY ATTORNEY GENERAL
DATE: JULY 23, 2026
RE: IN THE MATTER OF THE JOINT PETITION OF AVISTA
CORPORATION AND FORD HYDRO LIMITED PARTNERSHIP FOR
APPROVAL OF POWER PURCHASE AGREEMENT; CASE NO. AVU-E-
26-03.
BACKGROUND
On June 24, 2026, the Idaho Public Utilities Commission ("Commission") issued Order
No. 37073, approving the Power Purchase Agreement ("PPA") between Avista Corporation
("Company") and Ford Hydro Limited Partnership ("Ford Hydro" or "Seller"), effective July 1,
2026, on the condition that the PPA was updated with the following modifications:
1. In section 6.1 of the PPA, replacing "Effective Date"with"March 27, 2026;"
2. Updating the statement in PPA Exhibit E to reflect the avoided cost rates locked in on
the legally enforceable obligation date;
3. Adopting a timeframe that provides monthly estimates at least five days before the
delivery month in Section 5.2 of the PPA; and
4. Adopting the market prices without the impacts of Washington's Climate Commitment
Act("CCA").
On July 7, 2026, the Company filed a compliance filing to reflect the modifications
required by the Commission ("Compliance Filing"). The Company represented that it calculated
a 4.09% reduction to market prices for removing the impacts of the CCA. Compliance Filing at
2. On July 13, 2026, the Company supplemented the Compliance Filing with a confidential
workpaper that was used to calculate the 4.09%reduction.
DECISION MEMORANDUM - 1 - JULY 23, 2026

STAFF REVIEW
Staff reviewed the Company's Compliance Filing containing the updated PPA and the
supplemental confidential workpaper. Staff believes that all four requirements in Order No. 37073
have been met, including the requirement to remove the impacts of the CCA from market prices
used to determine the rate when the Seller's monthly energy amounts fall outside of the 90/110
performance band.
The Company compared 12 months of actual market transactions made outside the State
of Washington, also referred to as the Non-Washington Sink ("NWS") transactions, to similar
transactions at the Mid-Columbia energy market ("Mid-C").1 Compliance Filing at 1-2. The
Company explained that energy traded at NWS is not subject to CCA; therefore, its prices are
generally lower than the Mid-C prices. Id. at 2. The Company stated that based on over 1,000
individual transactions over the past 12 months, the NWS prices were 4.09% lower than Mid-C
prices on average. Id. As a result,the 4.09%reduction is applied to the market prices in the PPA,
but the Company plans to update the adjustment at the renewal of the PPA. Id. Since the contract
term is only three years, Staff believes that applying a single value of 4.09%to the entire contract
term is a reasonable approach to remove the impacts of the CCA.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Compliance Filing filed on July 7,
2026, effective July 1, 2026.
COMMISSION DECISION
Does the Commission wish to approve the Compliance Filing filed on July 7, 2026,
effective July 1, 2026?
Yao Yin
Utilities Analyst II
I:\Uti1ity\UDMEM0S\AVU-E-26-03 Decision Memo.docx
1 Similar transactions typically have similar characteristics, such as sales date,volumes,and resource types.
DECISION MEMORANDUM - 2 - JULY 23, 2026