20180126Avista to Staff ICNU_DR_083.docx

AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:WashingtonDATE PREPARED:11/20/2017CASE NO.:U-170970WITNESS:Patrick D. EhrbarREQUESTER:ICNURESPONDER:Jeanne PluthTYPE:Data RequestDEPT:State & Federal RegulationREQUEST NO.:ICNU – 083(AVA)TELEPHONE:[phone]EMAIL:[e-mail]:
Where an affiliate provides services to Avista, please explain Avista’s interpretation of the price benchmark required to prevent subsidization, including whether prices charged by the affiliate to Avista must be:
Set no greater than the affiliate's direct cost, with no loadings?
Set no greater than the affiliate's direct cost, including loadings?
Set no greater than what comparable services would cost Avista, if it purchased those services at market price?
Set according to any other criteria?RESPONSE:Please see the Company’s response to ICNU_DR_075(AVA). For transactions between Avista and Hydro One, the Company described in both the Joint Application and in testimony how these transactions will be accounted for in the future. See Paragraphs 74 and 75 in the Joint Application for the “Prototcol for Direct Assignment of Costs Between Avista and Hydro One”, as well as Ehrbar PDE-4. As described in Paragraph 75, the Company provided a memorandum in Appendix 7 to the Joint Application that further describes the Direct Assignment Protocol. By following this process, the Joint Applicants believe there is no cross-subsidization.In addition, see ICNU_DR_094 (H1) that summarizes testimony provided by Mr. Lopez (Exh. CFL-1T at 19:8-14) related to these types of transactions. Avista currently has limited services that are provided by affiliates. Those transactions are described in the Company’s annual Affiliated Interest and Subsidiary Transaction Report as required by WAC 480-100-264 and WAC 480-90-264. The reports that have been filed with the Commission have been provided in the data room in Section 3(b).Avista is subject to the regulations of RCW 80.16 – Affiliated Interest. As such, all of these transactions are subject to review in any proceeding involving rates or practices of Avista by the Washington Commission.