20261005CV_Joint Petition.pdf

RECEIVED
OCTOBER 2, 2026
Avista Corp. IDAHO PUBLIC
1411 East Mission P.O. Box 3727 UTILITIES COMMISSION
Spokane, Washington 99220-0500 NEW CASE NO.: AVU-E-26-13
Telephone [phone]
Toll Free 800-727-9170
October 2, 2026
State of Idaho
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Bldg 8 Suite 201-A
Boise, ID 83714
RE: In the Matter of the Joint Petition of Avista Corporation and Clearwater Paper
Corporation for Approval of a Power Purchase Agreement and Tariff Revisions.
Commission Secretary:
Enclosed for filing with the Commission is Avista Corporation and Clearwater Paper
Corporation's Joint Petition, Purchase Power Agreement and Request for Modified Procedure.
Should you have any questions regarding this filing, please do not hesitate to call Joe Miller at
[phone] or me at(509) 495-8620. Thank you in advance for your assistance.
Sincerely,
PazWd 54
Vice President, Regulatory Affairs
Pat.Ehrbargavistacorp.com

Attorney for Avista Corporation
Anni Glogovac, ISB No. 13010
Counsel for Regulatory Affairs
Avista Corporation
1411 E. Mission Avenue - MSC-27
Spokane, Washington 99202
Phone: [phone]
[e-mail]
Attorney for Clearwater Paper Corporation
Peter Richardson, ISB No. 3195
Richardson Adams, PLLC
515 N. 27ih Street
Boise, Idaho 83702
Phone: [phone]
[e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT CASE NO. AVU-E-26-_
PETITION OF AVISTA CORPORATION
AND CLEARWATER PAPER JOINT PETITION AND
CORPORATION FOR APPROVAL OF A REQUEST FOR MODIFIED
POWER PURCHASE AGREEMENT PROCEDURE
Avista Corporation ("Avista") and Clearwater Paper Corporation ("Clearwater")
(Avista and Clearwater are referred to collectively as the "Parties" or "Petitioners") hereby
petition the Idaho Public Utilities Commission ("Commission" or "IPUC") for an order
approving the Power Purchase Agreement ("PPA") and accompanying documents between
Avista and Clearwater. The PPA, dated ("2026 Agreement"), is attached
hereto as Exhibit A. Petitioners request that this Joint Petition be processed under Modified
Procedure (IDAPA 31.01.01.201 through .204).
In support of this Petition,the Parties state as follows:
JOINT PETITION OF AVISTA AND CLEARWATER PAPER- I

I. Avista is a Washington corporation with its principal place of business in
Spokane, Washington. Avista is an investor-owned utility principally engaged in the business
of providing electric and natural gas service in Idaho and Washington, as well as natural gas
service in Oregon.
2. Clearwater is a corporation that,among other things,owns and operates a paper
manufacturing facility located in Nez Perce County, Idaho (hereinafter referred to as the
"Facility").
3. Clearwater owns and operates a generation system at the Facility that consists
of four thermal electric generating units and is capable of generating approximately 132.2
MVA of energy (the "Generation"). These generating units are Qualifying Facilities ("QF")
pursuant to the Public Utility Regulatory Policies Act("PURPA") of 1978 and 18 C.F.R. Part
292,
HISTORY OF AGREEMENTS BETWEEN CLEARWATER AND AVISTA
4. Avista has provided electric service to the Facility for many years. Beginning
on January 1, 1992,Avista purchased the Generation output from the Facility, while providing
electric service to the Facility,pursuant to a 10-year Electric Service and Purchase Agreement.
The Commission approved the 1992 Agreement in IPUC Case No. WWP-E-91-5, Order No.
23858 on August 16, 1991.
5. Beginning on July 1, 2003,through a 10-year agreement, Avista purchased the
Generation output, and provided electric service to the Facility, pursuant to a Power Purchase
and Sale Agreement("2003 Agreement"). The Commission approved the 2003 Agreement in
IPUC Case No. AVU-E-03-07, Order No. 29418, on January 15, 2004. Under the terms of the
2003 Agreement,Avista sold to Clearwater all of its required energy and capacity at Schedule
25P rates. Those rates changed from time to time as approved by the Commission. Avista was
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-2

also the sole purchaser of Clearwater's Generation. All power purchase costs paid by Avista
to Clearwater under the 2003 Agreement were directly assigned to Avista's Idaho operations.
Differences between the Clearwater power purchase expense, and a certain amount of
Clearwater retail revenue based on kWh sales equivalent to the level of Clearwater generation,
versus that included in authorized level of power supply expense, were tracked at 100%
through the Power Cost Adjustment mechanism ("PCA"), per Order No. 29418.
6. On July 1, 2013, Avista and Clearwater entered into a new Electric Service
Agreement ("2013 Agreement"). The 2013 Agreement was approved by the Commission in
Order No. 32841 on June 28, 2013 (Case No. AVU-E-13-02). The 2013 Agreement was in
effect for a five-year term, beginning July 1, 2013, ending on June 30, 2018, and was later
extended to June 30,2021,in Case No.AVU-E-15-06.Under the terms of the 2013 Agreement,
Clearwater's Generation was metered such that Clearwater used the Generation to serve its
load at the Facility. Clearwater purchased and received from Avista all of the electric power
requirements at the Facility that exceeded the electric power generated by Clearwater's
Generation. Avista served Clearwater's additional power requirements under Avista's "Extra
Large General Service to Clearwater Paper's Facility" Schedule 25P rates, including all
applicable rate adjustments.
8. Under the 2013 Agreement, any monthly difference between the actual
Clearwater power purchase expense and the amount embedded in the development of base
retail rates in a general rate case (which was $0 under this "net metering" arrangement), were
tracked through the PCA at 100%, similar to the accounting treatment for the 2003 Purchase
and Sale Agreement.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-3

2018 AGREEMENT BETWEEN CLEARWATER AND AVISTA
9. In 2018, the Parties reached an agreement to provide Clearwater with the
opportunity to increase the value received from its Renewable Energy Credits("RECs"),while
ensuring that the Avista and its customers were held "neutral" as to whether Clearwater
generated into its own load or sold its full energy requirements to Avista("2018 Agreement").
The 2018 Agreement was approved by the Commission in Order No. 34252 on February 27,
2019 (Case No. AVU-E-18-13).
The 2018 Agreement superseded the 2013 Agreement in its entirety, and was effective
for a five-year term initially set to expire on December 31, 2023. Under the terms of the 2018
Agreement, Clearwater agreed to purchase and receive from Avista. all of the electric power
requirements at the Facility. Avista agreed to serve Clearwater's net power requirements
through its"Retail"meter under Avista's existing"Extra Large General Service to Clearwater
Paper's Facility" Schedule 25P rates, including all applicable rate adjustments, as modified
from time to time by the Commission. The Parties agreed to service all generation-related
energy provided by Clearwater to Avista through its "Generation" meter at the new Block 2
"PURPA" rate such that the price of energy sold to Avista was equal to the price paid for the
energy delivered to Clearwater by Avista, as defined below.' All other Schedule 25P Rates,
Terms and Conditions would remain as then approved, and subject to future modification as
approved by the Commission.
The 2018 Agreement addressed the treatment of Clearwater's RECs, and the sharing
of the benefits from the sale of the RECs. The 2018 Agreement was amended on several
'As a practical matter for billing purposes,all energy sold to Clearwater will flow through the"Retail"meter.
The amount of"Generation" load purchased by Avista from Clearwater,as measured at the Generation meter,
will be deducted from the total"Retail"meter load and priced at the new Schedule 25P Block 2"PURPA"rate.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-4

occasions to update the terms or extend the expiration date upon mutual written agreement of
the Parties and subject to Commission approval:
(a) On October 2, 2023, the Parties entered into Amendment No. 1 to amend the
2018 Agreement to extend the Term for three(3) additional years, such that the
2018 Agreement would expire on December 31, 2026;
(b) On November 26,2023,the Parties entered into Amendment No. 2 to(i)correct
references to Amendment No. 1 to the 2018 Agreement, (ii) update Exhibit F
to the 2018 Agreement with Revised Exhibit F that included Amendment Nos.
1 and 2 to the 2018 Agreement, and(iii)updated and corrected the definition of
"REC Agreement";
(c) On December 29,2023, the Commission issued Order No. 36046 extending the
Agreement through December 31, 2026, subject to further compliance filing;
(d) On January 19,2024,the Parties entered into Amendment No. 3 to comply with
Order No. 36046; and
(e) On February 1, 2024, the Parties entered into Amendment No. 4 to correct
Revised Exhibit B to the 2018 Agreement, which was attached thereto as
Amendment No. 3.
(f) On April 23, 2024, the Commission issued Order No. 36157 approving
Amendment No. 3, which included several revisions to the 2018 Agreement
including definitions, the inclusion of 90/110 provision, as well as other
additions to Section 5 of the Agreement and Amendment No.4,which corrected
minor errors in Amendment No. 3.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-5

2026 AGREEMENT BETWEEN CLEARWATER AND AVISTA
10. The Parties now seek approval of the 2026 Agreement, which shall supersede,
terminate,and replace all prior power purchase agreements with respect to the Facility,wherein
Avista is or was the purchasing party,upon the effective date of the 2026 Agreement. Provided
that circumstanceS2 will not allow the Parties to maintain the existing arrangement under the
2018 Agreement, as amended, the Parties have agreed to enter into the 2026 Agreement, to
substantially revert back to the terms of the 2003 Purchase and Sale Agreement between Avista
and Clearwater.
Under the 2003 Purchase and Sale Agreement between Avista and Clearwater, as well
as under the 2013 and 2018 Agreements,any monthly difference between the actual Clearwater
power purchase expense and the amount embedded in the development of base retail rates in a
general rate case was tracked at 100%through the PCA,per Commission Order No. 29418. In
addition, any change in a certain amount of Clearwater retail revenue, based on kilowatt-hour
sales equivalent to the level of Clearwater generation, was also tracked at 100% through the
PCA. The Commission approved similar treatment in Order No. 32841 for the 2013 Electric
Service Agreement, and in Order No. 34252 for the 2018 Agreement. The Parties request the
same treatment under this new 2026 Agreement.
The 2026 Agreement replaces the Parties' existing Commission-approved 2018
arrangement, establishes a revised structure under which Avista will purchase Net Delivered
Z As described in the preceding section, the 2018 Agreement provided an avenue for Avista to sell the bundled
energy and RECs from the Facility to a Third Party,while remaining obligated to serve Clearwater's entire load.
As Avista enters the Western Resource Adequacy Program(WRAP),it must demonstrate it controls the necessary
capacity to meet load plus a planning reserve margin(PRM). By retaining the Generation, Avista will have the
capacity to meet WRAP requirements without having to purchase capacity from the wholesale market. Further,
Avista's own resource adequacy studies show that Avista is moving closer to an even-to-short position on capacity
compared to its load and PRM.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-6

Output Generation output from the Facility, and provides that Avista will: (i) purchase the
Generation output at applicable PURPA rates approved by the Commission, subject to
specified treatment of forecast deviations, and (ii) will retain fifty percent (50%) of the
associated RECs and environmental attributes, with Clearwater retaining the remaining fifty
percent (50%). The 2026 Agreement preserves the existing interconnection arrangement,
establishes operational, metering, billing, environmental attribute tracking, insurance,
indemnification, and default provisions, and is conditioned upon Commission approval
without material modification. The 2026 Agreement has a one-year term beginning January 1,
2027, following expiration of the current 2018 Agreement on December 31, 2026, and is
intended to provide an orderly transition from the current deal structure to a framework under
which all project generation is sold to Avista and Clearwater's full electric requirements are
served under Commission authorized retail rates. The Parties intend to pursue longer-term
agreements in the future but request approval of this one-year agreement to allow time to gain
experience with and evaluate the new arrangement.
OTHER PROVISIONS
11. The 2026 Agreement is accompanied by an updated Electric Service Agreement
("ESA")between the Parties(attached hereto as Exhibit B),along with a revised Schedule 25P,
Schedule 66 (Power Cost Adjustment), and Schedule 91 (Energy Efficiency Rider
Adjustment), substantially in the form of those included in Exhibits C,D, and E, respectively.
Along with approval of the 2026 Agreement,Avista also requests approval of revisions
to Schedule 25P, Schedule 66 (Power Cost Adjustment), and Schedule 91 (Energy Efficiency
Rider Adjustment) to ensure those tariff schedules recover the same amount of revenue for
Schedule 25P as is currently being collected under approved rates. The rate under Schedule 57
(State of Idaho Usage Tax), set by the Idaho Tax Commission, shall remain unchanged, and
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-7

shall still apply to all of Clearwater's usage. Except as otherwise approved by the Commission
in connection with the 2026 Agreement, rates under Avista's Commission-approved tariff
schedules shall remain in effect and shall be applied as those schedules may be amended by
Commission order from time to time.
WHEREFORE,Avista and Clearwater respectfully request that the Commission issue
an order:
(1) approving the 2026 Agreement(Exhibit A),including the following provisions;
(2) approving that 100% of the actual Clearwater power purchase expense will be
directly assigned to the Idaho jurisdiction.
(3) approving that any monthly difference between the actual Clearwater power
purchase expense and the amount embedded in the development of base retail rates in a general
rate case is tracked at 100% through the PCA and that any change in a certain amount of
Clearwater retail revenue, based on kilowatt-hour sales equivalent to the level of Clearwater
generation, is also tracked at 100% similar to the accounting treatment under the 2003 and
2013 agreements;
(4) approving a revised Schedule 25P, Schedule 66, and Schedule 91 (Exhibits C,
D, and E, respectively), in compliance with the Commission's order approving this Joint
Petition to effectuate the terms of the 2026 Agreement; and
(5) processing this Joint Petition under the rules providing for Modified Procedure.
Signature page follows.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-8

DATED this a day of October, 2026.
Clearwater Paper Corporation Avista Corporation
Signature: Signature:
`J . Signature:
Name:e�O J 2i� c�S�n Name: Anni Glogovac
Date: Q, 9-0 2- 6 Date: 10/2/2026
JOINT PETITION OF AVISTA AND CLEARWATER PAPER-9