20171129U-170970 - ICNU Fourth Set of Data Requests to Avista.pdf

TEL [phone] ● FAX [phone] ● [e-mail] Suite 400 333 SW Taylor
Portland, OR 97204
October 30, 2017 Via Electronic Mail
David J. Meyer, Esq. Patrick D. Ehrbar Avista Corporation PO Box 3727 1411 E. Mission Ave, MSC 27
Spokane, WA 99220-3727 [e-mail] [e-mail]
Re: WUTC v. Avista Corporation Docket U-170970 Dear Mr. Meyer and Mr. Ehrbar:
Enclosed please find the Industrial Customers of Northwest Utilities’ (“ICNU”) Fourth Set of Data Requests to Avista Corporation (“Avista”) in the above-referenced matter. Avista has ten business days to respond to these Data Requests. Please provide your responses by no later than November 13, 2017.

Thank you for your attention to this matter. If you have any questions, please do not hesitate to call. Sincerely,

/s/ Haley M. Thomas Haley M. Thomas
cc: U-170970 Service List

PAGE 1 – ICNU’S FOURTH SET OF DATA REQUESTS TO AVISTA
DAVISON VAN CLEVE, P.C. 333 S.W. Taylor, Suite 400 Portland, OR 97204 Telephone: [phone]
BEFORE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION,
Complainant,

Respondent.

FOURTH SET OF
AVISTA
Dated: October 30, 2017
Please provide responses to these Data Requests by November 13, 2017. DATA REQUESTS
0062 Refer to Ehrbar, Exh. PDE-1T at 4:4-8, which reads: “To the extent that Avista
demonstrates there are net cost savings, or net benefits, directly associated with the transaction that are already reflected in base retail rates, the Rate Credit for the first five years would be reduced by up to $1.7 million, and the Rate Credit for the last five years would be reduced by up to $2.7 million.” In regard to this statement:
a. Is the text intended to say, “Avista demonstrates to the Commission’s
satisfaction…”?
b. Is the text intended to mean that the reduction in credit takes place when new rates go into effect that include such savings?
c. Is the intent of this commitment that Avista has to only make this demonstration one time? If yes, what assurance is there that such savings continue to exist and
are sufficient in level?
d. Please explain why this showing should not be required for each occasion Avista requests a general rate change.

PAGE 2 – ICNU’S FOURTH SET OF DATA REQUESTS TO AVISTA
DAVISON VAN CLEVE, P.C. 333 S.W. Taylor, Suite 400 Portland, OR 97204 Telephone: [phone]
0063 Refer to Ehrbar, Exh. PDE-1T at 4:14-21:
a. Please explain why each state’s rate credit is not established by each Commission,
independently, based on what is required pursuant to that State’s statutes.
b. If the WUTC finds that it requires $50 million in rate credits, would Avista then ratio that value by Washington’s allocation factor, to determine other state’s credit levels?
c. Please explain why the credit Avista proposes is allocated based on a common
cost allocator, rather than based on the level of risks a state perceives.
d. What studies or reasoning does Avista have to conclude that the level of risk or requirement of each state’s statutes is proportional to the allocation of common costs? Please provide any supporting documents.
0064 Refer to Ehrbar, Exh. PDE-1T at 5:20-21. Please explain:
a. Why factor (4) in the referenced text should reflect net direct plant, versus the
value of original direct plant investment stated in current dollars.
b. Why factor (4) in the referenced text should reflect net direct plant, versus the market value of existing direct plant investment.
c. Why net direct plant is reflective of the economic risk a state faces.
0065 Refer to Ehrbar, Exh. PDE-1T at 6:1-5. Why does Avista propose to use the cost Avista
assigns to each state versus the costs the Commission recognizes as prudent and recoverable?
0066 Refer to Ehrbar, Exh. PDE-1T at 7:16-21:
a. Please explain why a rate credit is not offered currently to offset the risks to
Avista presently incurred, due to the management and operational restrictions the
merger agreement places on Avista, that bars Avista from being able to independently make decisions—e.g. as making a large renewable generation purchase.
b. Does Avista agree that its shareholders received an immediate benefit associated
with the increase in share price?
0067 Refer to Ehrbar, Exh. PDE-1T at 9:7-12. Please explain why this commitment is made at the Olympus Holding Corp. level and does not also include Hydro One.

PAGE 3 – ICNU’S FOURTH SET OF DATA REQUESTS TO AVISTA
DAVISON VAN CLEVE, P.C. 333 S.W. Taylor, Suite 400 Portland, OR 97204 Telephone: [phone]
0068 Refer to Ehrbar, Exh. PDE-1T at 9:7-12:
a. Please explain why this commitment, while referring to compliance with existing
orders, has no verbiage in the commitment or in Mr. Ehrbar’s testimony regarding
compliance.
b. Are Avista and Olympus Holding Corp. intending to state that they (and Hydro One) acknowledge and will support compliance with such orders?
0069 Refer to Ehrbar, Exh. PDE-1T, beginning at 9:13. Please explain why this commitment
is made at the Olympus Holding Corp. level and does not include Hydro One and all of
its affiliates, with regard to allocations and any prohibition of subsidization by Avista’s customers.
0070 Refer to Ehrbar, Exh. PDE-1T, beginning at 9:13. Will Avista and Hydro One also notify the WUTC of any changes in Hydro One allocations, where such changes affect the
allocation of costs to Avista?
0071 Refer to Ehrbar, Exh. PDE-1T at 10:1-4. Please explain why this commitment is made at the Olympus Holding Corp. level, and does not also include Hydro One.
0072 Refer to Ehrbar, Exh. PDE-1T at 10:15-19. Please explain why this commitment is made by Avista alone, and does not also include Hydro One.
0073 Refer to Ehrbar, Exh. PDE-1T, beginning at 10:20. Please explain why this commitment
is made by Avista alone, and does not also include Hydro One.
0074 Refer to Ehrbar, Exh. PDE-1T at 11:9-15. In the language of the commitment, is the word “performance” intended to also mean “compliance”? If no, please explain.
0075 Refer to Ehrbar, Exh. PDE-1T, beginning at 13:8:
a. Please provide (or identify, within the Document Room or filed workpapers) in
excel format, the cost entries for calendar year 2016, consistent with the referenced testimony.
b. Please explain why, concerning the instances Avista provides services to its affiliates, such services are not priced at prevailing market rates for such services.
c. Please identify all loadings and calculations of reimbursement rates.
0076 Refer to Ehrbar, Exh. PDE-4. Please provide (or identify, within the Document Room) copies of correspondence that was provided to Avista executives and Board members regarding the protocol of direct assignment of costs associated with the Hydro One transaction.
PAGE 4 – ICNU’S FOURTH SET OF DATA REQUESTS TO AVISTA
DAVISON VAN CLEVE, P.C. 333 S.W. Taylor, Suite 400 Portland, OR 97204 Telephone: [phone]
0077 Refer to Ehrar, Exh. PDE-5. For each rate schedule listed, please provide an estimate of the average monthly dollar credit to a typical customer’s bill, and the average percentage
reduction in the bill given rates currently in effect.
0078 Refer to Morris, Exh. SLM-1T, beginning at 25:23. For each state listed:
a. Please identify whether, in Avista’s view, the legal standard in the state is a no harm standard or a net benefits standard.
b. Provide a copy of the direct testimony filed in each state where the company
discusses the statutory standard applicable in that state.