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HomeMy WebLinkAbout20181031Avista to Staff 1-4.pdfAvista Corp. 1411 East Mission P.O. Box3727 Spokane. Washington 99220-0500 Telephone 509-489-0500 Toll Free 800-727-9170 f-'''-,^ rt\i ,:i'rrr l -_ t- ! i ,{ L- Li :ii1,;;I I l hi{ $' ?g l' '' '' ri j,1,-J l-' i:r, I --i ..1_', , ,;lS:;CN lWnsrfr Corp, October 31, 2018 Idaho Public Utilities Commission 472W. Washington St. Boise, ID 83720-0074 Attn: Ed Jewell Deputy Auorney General Re: Production Request of Commission Staff in Case No. AVU-E-18-09 Dear Mr. Jewell, Enclosed is Avista's response to IPUC Staffs production request in the above referenced dockets. Included in this mailing are the original and two paper copies of Avista's response to production request: Staff I - 4. Also enclosed on CD are copies of Avista's response to the production request. The electronic version of the response was emailed on 10/31/18. If there are any questions regarding the enclosed information, please contact Paul Kimball at (509) 495-4584 or via e-mail at paul.kimball@avistacorp.com S Paul Kimball Mgr. Compliance & Discovery Enclosures AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO.: IDAHO AVU-E-18-09 Staff Production Request Staff-01 DATE PREPARED: 1012512018WITNESS: N/A RESPONDER: Jeff Schlect DEPARTMENT: Transmission ServicesTELEPHONE: (509) 495-4851 REQUEST: Please provide a scaled drawing of the area containing the assets to be transferred per the Company's Application. Include in the drawing: all property lines, roadways, structures, and significant electrical equipment being sold/purchased. Please title by name those assets which are being sold/purchased. RESPONSE: Please see the following map file with four maps showing the I 15kV transmission facilities being acquired from BPA: StaflPR_0l Attachment A: BPA Asset Transfer - Maps Sheet I - Overview Sheet 2 - Four Lakes Substation ( I 15kV bus to be owned by Avista) Sheet 3 - Four Lakes Tap point of interconnection with Shawnee-Sunset I 15kV Line Sheet 4 - Four Lakes Tap point of interconnection with Sunset-Westside I l5kV Line Additionally, please see the following one-line diagram drawings acquired from BPA which provide additional detail regarding the specific types of facilities being acquired from BPA: StafLPR_0I Attachment B - One Line - Cheney Tap StafLPR_0l Attachment C - One Line - Four Lakes Tap Please see the following file showing the Hatwai 230kV power circuit breaker line position facilities transferred to BPA: Staff PR 0l Attachment D - BPA One Line Hatwai Page I of 1 c oCO'-i o .9No.9oE.gltJEbF|JD_o.ok!Dtr2 = itr 6'tr;=E llnl"o EI lasunsjaaul e 9uae)l : u[snv Shernan -dtt"r a$oes eqs Ass, o-o€o ilI 3 o = g o So! 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PATROL DIAGRAM WIRE & STRUCTURE INFORMATION REF LINE ACSR 267 KCM PARTRIDGEGWTNoSALUMOWELD 115 KV SC H.FRAME WOOD POLE ACSR 267 KCM PARTRIDGE.I15 KV SC H.FRAME WOOD POLE ACSR 398 KCM LARK 115 KV SC H-FRAME WOOD POLE ACSR 267 KCM PARTRIDGE 115 KV SC H-FRAME WOOD POLE NOTE 1 L ==oF (L Fa TUY J ElolJ- oF o- F Luz [rJIo N()(oa: @J?<od[il'a Oo- Bg (L E,Fa HARD BUS NOTE 2 ACSR 267 KCM PARTRIDGE 1 15 KV SC H FRAME WOOD POLE NOTE 1 ACSR 267 KCM PARTRIDGE,I.I5 KV SC SINGLE WOOD POLE ACSR 267 KCM PARTRIDGE 1,I5 KV SC H-FRAME WOOD POLE -6irPa9,ad1,6u9Y=4aJo,otrt; 5r.tJ ; r: J @Jo-3#[L til = 3rp -ilr Fa[!Y Jtfo TL otso,0o) tfiJa uJ L!- ao =a I(I - =$qIFo -trFIo IIJz Yo TL U) =={q o) o(f) (o ozo =JFJJuJdl zoFozI(t, = Vdo5conRf crED DESIGx/co{Ducrfi oATl tltL & 2 LIl5 o/29/O\BEI-LL3i2 L€TTER X.€EF CME CMffCIED NO.TO COIIPUTER REVISION ONLY BY DA TE APPROVET uxtrEo sllrgs otPlPllat{T (r ExfiGYBONNEVILLE POWER ADMINISTRATIONHElIrO,rmtEns. P6rllxr. (nEcor TRANSMISSION L INE ONE-L INE DIAGRAM CHENEY TAP TO SILVER LAKE-SUNSET115 KV CHEYT-SISU PPROVEO co.,lLED xHc 0i^rr CI1ECTED EEE crf.crEo PPROYEO JL REDIXC DAIE l-2.-or 262345 srl{ LBL ffit -'A ttE F1 xlt 1 CHENEY r-- SUBSTATTON t rlrl (ctrY oF CHENEY) |aao I .1. I I CHEYT SLSU 10 5 PM 38 CHEYT SLSUI7 PM32 CHEYT SLSU a a a a IE PMZ5 - CHEYT SLSU a a 87 CHEYT SLSU 0. 1 PM1 =N.q Ntl F - -,\*FOURreS SUESTATION (INLANO POWER & LIGHT ANO Crry OF CHENEY)FOUR TAXES TAP LII€ trltrE1 Ta I' CHEYT SLSU 7 PA 57 CHEYT SLSU a aa I I Ia I 37 PDJb- CHEYT SLSU 1t PD3 - a a CHEYT SLSU t eoza - "\- + rosrLVERLA*E CHErT SLSU (AV'STA)"rn"ar* /, *(AUSTA) a o 1 PDIR 1 9.04 MI TOTAL LENGTH NOTES: 1. PD 57 (sr/) AND PM 1 (6/1) ARE SINGLE WOOD POLE STRUCTURES 2. TRANSMISSION LINE HARD BUSSED FROM BAY 2 TO BAY 4 WITH A TAP POINT AT BAY 3 Staff_PR_o1 Attachment B Page 1 of 'l j tBl?3Tl filrcl trin1 PATROL D I AGRAM DES I GN REFERENCE L INE ACSR 267 KCM PARTRIDGE115 KV SC H-FRAME IVOOO POLE t-JJZY J;g o- ioI Fs"' (,;-!,1>V'7;Hc 1 i3= -oLtr:G = 2'a(Jr L!L I N(t) 3 z.O (, Lr..l&. LrJz. :zo o_a =No @ @Iozo Fo EF o)JU@ z.O (, =Ia = 0 UPERSEDES OIVG 89050. OPERAIIN6 NAME UPDATED FRM ,/,tJtt *1.1,{- TRANSMISSION LtNE ONE-LINE OIAGRAM FOUR LAKES TAP TO SUNSET _ EAST COLFAX 115 KV FOLKT-SUEC BONNEVILLE POU'ER AOMTNISTRATION w.%ELC AZ OAIE REVISIONSER IAL 5IZ€SHEEI 010F1 N0. 262346 COilPUTER REVISION ONLY 8Y UNITEO STITES OEPARIENI OF ENENCYAPPROVEO coFrLEo !!!_ OAAM FRM FOUR LAKES SUBSTAT tON TO CHENEY ,VER LAXE-SUNSET (AVISIA) T lr a FOLKT SUEC6 NK54 o N o FOLKT SUECoa1 2 NK2 fBzl9 FOLKT SUEC 1zs SIJNSET{AST COLFAX(AVISTA )IO SUNSET (Avista Shawnee-Sunset) T0 +____ EAST COLFAX a a FOLKI SUEC,1 NK1T TOTAL LENGTH5.92 MI NOTES: 1. SIRUCTURES 5/5 (NK4O) ANO 5/6 (NK4I ) ARE SINGLE TOOO POLE WISHBONE. Bl 730 Statr_PR_Ol Attachrent C apa r?q7( ,ltlN 1978 Psge 1 of 1 APPROVEO OATE fBu al trjz. J \(ssro z(trFu, i<t> I-t-(Eoz. o o)g)o(L ) )nt-+- Z,oFa i]r A)9tI s c\c vao=rLc0\@l\--o\<mF(oo ocnSN ;N Z. C]FaVrd_] L) i-o. 00 o Eo o v,tro F uto =(J (BIL --fyltotjl .l,(r uJ ci E(J}Err Ll U-JL s oftiJaOJ (ou) N c' a {{NrO <N A>q'7C+ c NNa uJJ z =or,U* {t)ot { =>-:>F{I :l-t) rn 'nN (- -=-Pio"Hc*ieEi3j E.u F$ F $qv r l]- <T e!st Ystilr) NsNEfilro @c{ E e\S : otJ- -sEjg-s L;r), ,o o- tsJ a ,i---J @' E.LU trl .FFC z>=EICf,C(uJc-<t!Frl TdSJ:f IC<t,.u&o (, Eco(E o IE.(L ul(E U) (osN __l -oNF.ss haoo'osaF. F. F.$$v t.f)NEPNui (f-ul:tz4t =(.];or<tl<O- I>cc:CL r,tfi16: - <N-T- I._t+<-t-, Itrll rHSI-r t u3r,od 0NV-]NI ('i!^l/t'zc lvlol) $ ff Nao J t_ I t_ AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO.: IDAHO AVU-E- 18-09 Staff Production Request Staff-02 DATE PREPARED: l0ll5l20l8WITNESS: N/A RESPONDER: Jason Boni DEPARTMENT: Utility Accounting TELEPHONE: (509) 495-2512 REQUEST: Please provide the original cost and remaining book value of all assets being transferred between the Company and BPA. RESPONSE: The Company is providing an Excel spreadsheet that outlines the proposed accounting entries for recording the transaction and provides the remaining book value of all assets being transferred between the Company and BPA. See Sta[PR_02 Attachment A - Accounting Entries for Avista-BPA Transaction. Page I of 1 F{ or{ooo(oo- mO|oitaNF.' N o (JB! B trrs =o e qJ B.osB:OrAJ o' qJ5 s -t<ooa qJ = <fu'! r-{<lFl Nrl F{ stU.! r-lslF-l Nr-.1r-l NnFi(o(n oiln00 Nnr{(o(n oirn00 ooc;ootct(ov U \aB OJ.\5sQo*q) B {cob qJ5 s.Yooco AJ = og N6@FlorJ) og N@00-iorn ogooo!n@FI oeooo-t/l@F.l oq N00Nr\NF oq(\ @F Nr\F E(u U xo xco (J(! c(o F o-o I(g 't o o ct! boc c =o()() I Pco E.clJ(E No IE.o- tl(u t/, co-E€IE oJfo:+E.,/r Y1b.:k= o'.YdJ\P6.qJ'; (!-\ 5t p9f.i{Lor @@\4qg3:ts'(J(Jco0,r5uluoU<tc{(JFfOO.'{ .'{ Nor.{ qJ qr .S BqJo (o 0o trl! @c og l, !, o oG, E$.Ea O,)Ekr Ioosol,*. E-E ScBbOos:t Eii.s EE.B(ot:I oEE'trSgEE < lrJ 'G oo r.J pqed_Hd0J o3ql s =E =(J(, n EE1A oTor-;.e !!FIUE3E (!(ovdEs.9 .9 qt!tso()!)Sgg!UUO) mFl:oo*- G q, Ea_5sIU st o.l0o o a! a! 't o o ca! E' o oE coE(oooEaoot1 Oo€E HsHq'6 a-t'='s =-s$Lq-EEil(OPHEgF .::dP6Ejg90rr.r < 'Gs8HHHqJaB0ls:tr5lJ(J (n =oart Lo elE.Y0>(oOEL/I L F= CCrg(!--E-d!r()CO uaJ:ooY-EbF{NqJoos..r .{ 'E !ao ssqJ EqJ Gl{ N EEt1 o e?Eu =88ilt;(rg= .= L .91 ccoG,(!-EEd(JucOrEs0)orYiEtr\!dNqJooc.{ -l 'E !ao qJ Ea-5sIU !-{ -,o(Jo .! 't c0 o (! o-.o =to(JoE clol ol'=l HIolAI zl EIurl (ol =l=lol;lclol -l5lololol<tslol-lorl.!lFI LIC'I_ol EI =lzl EI =lolUI9l<t oJl.ol EI =l =lolclsl =lol -l .d (o! Eo (!coo (! o()c!(o dT tri oz (no) OrF{(n (o 00N (no) OlFt(n (oON cnOtoit-lN F\.\tN {coo B OJ\.0JbcB !tro o (Jo! o o o a. o o G b qJ5 s a<ooa qJ = Z.ctq)o AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO.: IDAHO AVU-E-18-09 Staff Production Request Staff-03 DATE PREPARED: l0ll5l20l8WITNESS: N/A RESPONDER: Jeff Schlect DEPARTMENT: Transmission Services TELEPHONE: (509) 49s-4851 REQUEST: Please provide the Company's analysis showing how the asset transfer fulfills the requirements stated within Idaho Code 6l-328: a. That the transaction is consistent with the public interest; b. That the cost of and rates for supplying service will not be increased by reason of such transaction; and c. That the applicant for such acquisition or transfer has the bona fide intent and financial ability to operate and maintain said property in the public service. RESPONSE: The Company did not prepare a detailed, written analysis of the proposed transaction with respect to the specific elements of Idaho Code 6l-328, but considered all pertinent aspects of the public interest while negotiating the transaction with BPA. (a) The transaction is consistent with the public interest because it:(i) Does not increase any costs associated with transmission rate base and decreases transmission expenses, as outlined in the response to (b);(ii) Provides future options for the Company to support and enhance transmission system reliability in the local area, as outlined in the response to (c); and(iii) Enhances the ability for both Avista and BPA to effectively comply with mandatory federal reliability standards. The transaction eliminates a situation where a transmission asset owned by one pafi (230kV power circuit breaker owned by Avista) is located within the fenced substation boundary of another party (in BPA's Hatwai 500/23OkV Substation). While Avista has all compliance responsibilities for mandatory reliability standards for its asset, Avista was unable to perforrn or document any such activities for this asset because it resided within BPA's secure physical boundary. Avista had to rely upon BPA to both perform required maintenance and document such required maintenance in such a way that Avista could demonstrate its own compliance with mandatory standards. This situation had become administratively burdensome for both Avista and BPA. (b) The cost of, and rates for, providing either retail electric service under state jurisdiction or transmission service under federal jurisdiction will not increase by reason of this transaction. In fact, the Company expects the overall cost and rates for supplying retail service will decrease as a result of this transaction. With respect to assets, as outlined in the Company's response to StaflPR_04, there will be no effective change to the Company's net transmission investment due to this transaction. Page I of2 The net depreciated value of the transmission assets being acquired from BPA is $460,900 system. The net value of the transmission assets being transferred to BPA plus acquisition adjustments is also $460,900. The composite depreciation rate to be applied to the acquired assets is the same as what was applicable to the assets being transferred to BPA. Accordingly, from the standpoint of asset rate base recovery, there will be no increase in costs or retail rates due to this transaction. With respect to annual transmission expenses, this transaction will result in a decrease in costs. The Company was paying BPA $608 per month ($7,296 per year system) for operations and maintenance charges associated with the Company's Hatwai 230kV power circuit breaker located in BPA's Hatwai Substation. Following the transfer of this asset to BPA, the Company is no longer paying this monthly charge to BPA. (c) The Company owns, operates and maintains approximately 2250 miles of ll5kV and 230kV electric transmission facilities. The assets acquired from BPA consist of approximately 15 miles of ll5kV transmission facilities that are electrically located entirely within Avista's balancing area and are bounded entirely within Avista's 1l5kv transmission system network west of Spokane - these BPA assets had been an isolated pocket within the Avista system. The acquisition represents an increase of only 0.67% of transmission mileage for which the Company will need to operate and maintain. Additionally, the acquisition of BPA's lines and right of way could possibly provide future transmission line routing options to support and enhance reliable transmission service to both Avista and BPA loads in the area west of Spokane. Accordingly, the Company has both the financial and operational capability to reliably operate and maintain the acquired facilities in the public interest. Page 2 of 2 AVISTA CORPORATION RESPONSE TO REQIIEST FOR INFORMATION JURISDICTION: CASE NO: REQUESTER: TYPE: REQUEST NO.: IDAHO AVU-E-18-09 Staff Production Request Stafl04 DATE PREPARED: l0lt5l20l8WITNESS: N/A RESPONDER: Jeff Schlect DEPARTMENT: Transmission Services TELEPHONE: (509) 495-4851 REQUEST: Please describe how the disposition of the assets will be recorded for accounting purposes. Please include applicable procedures and spreadsheets with formulas enabled. RESPONSE: The Company is providing an Excel spreadsheet outlining the proposed accounting entries for recording the transaction in its response to Sta[PR_02. The Company is also providing a copy of its Section 203 filing with the Federal Energy Regulatory Commission ("FERC") which also outlines the transaction's disposition of assets for accounting purposes. See Section Y - Proposed Accounting Entries in the Company's FERC filing. See Staff PR_02 Attachment A - Accounting Entries for Avista-BPA Transaction and Sta[PR_04 Attachment A - FERC Filing 20180831 - Section 203 Acquisition. Page I of I UNITED STATES OF AMERICA BEF.'ORf, THE FEDORAL ENERGY REGULATORY COMMISSION Avista Corporation Docket Nos. EClS- APPLTCATION TOR AUTHORJZATION PUR.SI.IANT TO $ECTION 203 OT THE FEDERAL POWER ACT Ilursuanl to section 203 of the Federal Power Act ("FPA"), l6 U,S.C. $ 824b. and Part 33 of the regulations of the Federal fnergy Regulatory Commission ("'I{ERC'" or "Commission"), l8 CFR Part 33, Avista Corpo:ation ("Avista") ("Applicant") hereby submits this Application fot approval of the acquisition of eertain transmission facilities Avista is acquiring from the Bonneville Power Administration ("BPA") as part of a transaction under which Avista transferred certain facilities to BPA in exchange lbr thc tbciliries that are the subject of this Applicatinn ("'liansaction").1 Pursuant to an agreement with BPA (attached hereto as Exhibit I), Avista acquired certain tap lincs and easernents associated with those tap lines, which are described in that agreement as the Four Lakes Tap Line and the Cheney Tap Line ("F'acilities"). Thc purchase price for the F'acilities was $0. As consideration for the F'acilities, Avista transferred certain equipment to BPA pursunnt to a sepfiate'Iransftr of Ownership Agreement, Contract No. l STX-I 6631.2 The Transaction is necessary to ' Avista has notificd FERC Staff that this liling is being made late duc to an inadwrtent oversight. Avista's transt'er of certain facilities to BPA does not require prior autlrorization undcr section 203(aX I )(A) of the FPAbecausethevalueofthosefacilitierislessthanSl0million. Seel6U.S.C.gE2ab(aXtXA):18 C.F.K 33.1(aXi). ? Concurrent with this tmnsaction, BPA is acquiring Avista's 230kV power circuit breaker and nppur?enant equipment that is located within BPA's Hatwai 500/230kV Substation. As notcd above, Avista's transfcr of rhis equipment to BPA does not require prior authorization under section 203(aXl XA) of the FPA Page - I APPLICATION FOR AUTHORIZATION PURSUANT T0 SECTION 203 OF TI"I[ FEPERAI, POW-ER ACT Staff_PR_o4 Attachment A Page 1 of 16 ) ) enable both parties to better cornply with mandatory reliability standards governing maintenance of bulk electric system equipment. I'he "l'ransaction eliminates Avista's ownership of an asset inside one of BPA's stations. thereby simpliling operation and maintenance responsibilities. As demonstrated herein, the Transaction satisfies the requirements of Section 203 of the FPA and Part 33 of the Commission's regulatioas because it is consistent with the public interest, will not adversely aftbct competition, rates or regulation, and will not re.sult in any cross-subsidization. pledge or encumbrBnee on behalf of an associate company. As described herein and consistent with Commission precedent. the Applicant rcquests that the Commission grant waivers of its Part 33 liling requirements to the extent that informaticrn otherwise required to be filed is not necessary to determine that the Transaction satis{ies the requirements of FPA Sestion 203.1 I. DESCRIPTION OF APPLICANT Avista is a corporation created and organized under the laws of the State of Washington with its pr:incipal oflce in Spokane, Washington. Avista is an investor- owned utility engaged in the business of generatingo transmitting. and distributing electric ptlwer to wholcsale and retail customers and transmitting electric pow€r on behalf of third parties. Avista is authorized by the Commission to engage in sales of capacity and because the value of such equipment is less than 810 million. .$ee l6 U.S.C. $ 8?4b(aXlXA): IE C.F.R. 33.l(aXi). Accordingly, Avista is not seeking approval of its transfer of equipment to BPA pursuant to the Transfer of Owncrship Agreement Confact No. I 8'IX- l 6163 I . 3 See c.g,, lior'l Energ: & Gas ?'ransilitsion, lnc., 108 FERC { 62,148 (200,1); Northhroo* rV, }:, tIC. 130 FERC ,0 62.128 (2010); EBG Holtlings LLC',ll9 FERC T 62.172(2007): I{ACH Gen, LLC,I l3 FERC I 6l,l3E(2005): BostonGenerating LII',113 FERCtl6l,l09(2005): LoPolomaHoldingCo", LLC,ll? FERC{61,052(2005); I.a*eRoadlltlding,Co., LL*l12 FERC{61,051 (?005}; seeal.soRevisedFiling Requirements llnder Part ji qf'the Llommhsion's Regulations, FERC Slats. & Regs. n 3 l.l I I at 31.914-15 (2000) ("Order No. 642"). Page - 2 APPLICATION I'OR AUTHORIZA'IION PURSUAN'I TO SECTION 203 O} THE FEDERAI, POWER ACT Staff_PR_o4 Attachment A Page 2 of 16 energy at cost-ba.eed and market -based rates.i Avisk also offers open-access transmission services pursuant to its Commission-approved Open Access 'fransmission Tariff. Avista is also engaged in the distribution of natural gas in certain portions of $/ashington, Idaho, and 0regon. II. DESCRIPTION OT TI{E TRANSACTION The Facilities that Avista is acquiring are tap lines comprised of approximately 15 miles of BPA's I lskv transmission assets in the Airway lleights, Washington area. The acquired assets currently reside within Avista's Balancing Authority Area, are physically and electrically separate from BPA's main transmission network. and are entirely surrounded by Avista's transmission system. "l'he acquired assets provide transmission intcrconnection and load service to two of BPA's wholesale utility customers. Avista provides Network lntegration Transmission Service to BPA for service to these two wholesale utility customers. Ownership and mairtenance of equipment inside another entityrs station has presented administrative burdens to both parties in their efforts to comply with certain NERC standarrds. The Transaction will simpliff both parties' ability to comply with mandatory NERC reliability standards goveming the operation and maintenance of Bulk Electric System equipment. ilI. STANDARI} T'OR APPROVAL The Commission will approve a transaction under section 203 of the FPA, if the proposed transaction is consistent with the puhlic interest. In evaluating consistency with { ,{vista (formerly known as The Washington Warer Power Company) wac first granted market-bascd rate aurhority in an order issued trn Novernber 29, 1996 in Dochet No. ER97-?, The ll'ushington Wilt* Fower(ompany.77 FERC: I6l":33 (1996). On January 2J, 1999" Avisla filed a notice of succrssion, includirrg succession with rcgard to The Washington Warer Power Company's rate schedules. in Docket No. ER99- 1435-000. In a leuer order issucd on February 24. 1099, the Commission accepted Avista's January 25, 1999 filing. Page - 3 APPLICATION FOR AUTHORIZATION PURSUANT TO SECTION 203 OF THI] FHDERAI. POWER ACl' Staff_PR_04 Attachment A Page 3 of 16 the public interest, the Commission hcuses on: (l ) the eflect on competition; (2) the effect on rates; and (3) the effect on regulation.s In addition, Section 203(aXa) of the F'PA requires the Commission to consider whether a proposed transaction will "result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility asscts tbr the benefit of an associate company.*6 In its Supplemenlal Merger Poliqt Statement. the Commission clarified the information required to demonstrate that a transaction dcles not raise cros.s-subsidization coneerns and identified'safe harbors" or classes of transactions that do not raise cross*subsidization concems.T A. Thc Transuction is in the Public Interest Section 203(aX4) ol'the FPA provides that the Cornmission "shall approve [a] proposed disposition. consolidation, acquisition, or change in control. if it finds that the proposed transacti<rn will bc consistent with the public interest, and will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets lbr the benelit of an associate company.-s [n determining whether a proposed transaction is in the public interest. the Commission considers whether it will have an adversc eff'ect on competition, rates. or regulation.e As described below. the Transaction satisfies the requirtments of FPA Section 203 and the Commission's implementing regulations and is consistent with the Public Intercst. t See Merger Policy Stutement. n l6 U.s,C. s't 824b(axa). 1 FPA Ssctian 30 j Supplemental Poliq, Stutement, t20 FrRC 1[ 61,020. PP I I -26 (200?), reh'g ond durilication clenied,lS2 trERC T 61,157 (2008) {"Supptemental Merger Follq' Stotemcnf'). * t6 u.s.c. $ s24b(oX,t). '$ lnqutry Concerning the Commissittn's lvlerger Pollry l/nder the Feelerut Pawer Act: ttoliey. Srorcmenr, Order No. 592, FERC Stats. & Regs. t[ 3 1 ,M4., at 30,l l l- 12 { 1 996} (" Merger Poliq' 31u1r**r,"r, rccttnslderutittn denled, Order No. 592-A" 79 FERC ![ 6l J2l ( 199?). Page - 4 APPLICATION FOR AUT'HORIZATION PURSUANT TO SECTION 203 OF TIIE FENERAI," POWER ACT Staff_PR_o4 Attachment A page 4 of 16 B. The Proposed Trrnsactions Will Not Have Any Adverse Impact on Competition in Wholesale Markets Part 33 of the Commission's regulations provides that a Section 203 applicant must file a horizontal competitive analysis screen "if, as a result of the proposed tramaction. a single corporate entity obtains ownership or control over the generating facilities of previously unat'filiated merging entities . . . ool0 and/or a vertical competitive analysis "if. as a result of the proposed transaction, a single corporate entity has ownership or control over one or more merging entities that provides inputs to electricity products and one or more merging entities that provides electric gerreration products . . , ."tl The Transactions do not involve a change of ownership or control of any generating facilities or entities that provide electric generation products and, as such. do not require horiz.ontal market power or vertical competitive analyses.12 The Commission has concluded that "anticompetitive ellbcts are unlikely to arise with regard to . . . transactions that only involve the disposition of transmission faoilities."l'! llhe only assets transferred in the Transaction are the transmission facitities described in Exhibit L The'l'ransaction will not have any adverse impacts on competition. C" The Proposed Transaetions Will Not Have Any Adverse Impaet On Avista's Rates When considering the impact of a transaction on rates. the Commission looks primarily at impacts on transmission rates and on rates for captive wholesale ro tE c.F,R. 33.3(aXi).rrrBc.F.R.33.4(aXi) rr See, eg., Unlon Elce- L'o, I 14 FERC n 61.254, at P 36 (2006); PSEG Waterford Energl', LLC.ll2 FERC'!i 6 1.308, at P l2 (2005): Exelon Corp.. I l2 FERC ti 6 1,0 I l. at P 198 (2005). t3 Trans$cttom suhject to FPA Section -?0J, Order No. 669, $'ERC Sta&. & Regs. n I1.200, at P 190 (:005), ("Order No. 669"), on reh'g,, Order No. 669-A. FERC Stats. & Regs. .| 31,214, on reh'gg, Order No. 669-8, FERC Stats. & Regs. tl 31.235 (?006). Page - 5 APPI.ICATION FOR AUTHORIZATION PURSLJANT TO SECTION 203 OF''t'}IE FEDERAL POWER ACT Stafi_PR_04 Attachment A Page 5 of 16 rcquirements customers.l{ Tte Transaction will also have no adverse impact on Avista's rates. Avista does not propose to change rates for service as a result of the Transaction. The Transaction does not raise the possibility of any rate increasss for existing cost,ba-ced rvholesale power sales customers or transmission customen. The only potential impact on rates is the recovery of costs and expenses nf any incremeltal operation and maintenance ("O&M") performed by Avista on the subject facilities. Such incremental cost and expense of O&M will be offset by reduced O&M as a result of the transfer of certain facilities to BPA. Aecordingly, ey O,&M performed on the subject facilities will have a de minimis effect on rates. The Transactions also have no adverse effect on the rates for wholesale power sales. Avista makes wholesale power sales pursuant to its Commission-accepted ma*et- based rate taritl'. Jhe Commission has concluded that such market-based rate sales do not raise any concerns about a transaction's possible adverse effects on rates.li D. The Proposed Transactlons Will Have Not Hove Any Adverse Impact On Regulation The Transaction will also havc no adverse e{Iect on reguiation. The Commission's regulatory jurisdiction over Avista and will contiuue atler the Transaction. Avista will also continue to be subject to the jurisdiction of the state utility commissions with regard to any retail ratepayers. Accordingly, there is no eftbct on either tbderal or state regulatory authority. tn Merg,er Poliq' Srarcmcnr at 10, l2l.tl()inergp'Carp",140 FERC r[ 61.180, arP 4l (201211"Ths Commission has prrviously stated *rat, when therc are market-based ratca. the sffect on rstes is not of concern.'t) (citing Duquesne l.ight Haldings, lnr., I l7 FERC $ 61.326, at P 25 (2006)). Page - 6 APPLICATION FOR AUTHORIZATION PURSUANT TO SECTION 203 OF THE FEDERAL POWER ACT Staff_PR_o4 Attachment A Page 6 of 16 f,. The Proposed Trrnsaction Will Not Result in Cross{ubsidization or the Pledge or Encumbrrnce of Utility Ascets Pursuant to scction 203(aXa) of the FPA, the Commission considers whether a proposed transactiort will result in a cross-subsidization of a non-utility associated company by a utility company" or in a pledge or encumbrance of utility essets for the bene{it of an associated company. In the F'PA Seclion 203 Supplemental Policy Statement. the Cornmission explained that Section 203 applicants can "demonstrate that a proposed transaction will not result in inappropriate cross-subsidization . . . either thmugh meeting one of the safe harbor demonstrations [recognized in the Supplemental Policy Statementl . . . or demonstrating that there are no poteutial cross-subsidy issues associated with the proposed transaclions."I6 T'he Transaction involves only non-affiliates, and therefcrre falls within the Commission's safe harbor "where a franchised public utility transacts only with nonalliliated entities."lT lturther, the'liansaction does not involve the issuance ol' securities or a pledge or encumbrance of utility assets for the benetit of an associate company, ry. INT'oRMATTON REQUTRED BY SACTION 33"2 Or THE COMMISISON'S RECULATIONS AND REQUESTS FOR WAIVER ln support of this Application, Applicant hereby submits the tbllowing information required by Part 33 of the Commission's regulations.tfl To the extent that ce(ain requcsted information is inapplicable to the Commission's consideration of tb F'PA Sectictn 203 Supplemental Policy Stotemen , 120 FERC f 6 I ,060, at P 23 (2007). t1 l:PA S€ctktn 103 Supplenental PolicT'Stutemenl,l2A FERC li at P 19 ("Where a franchised public utility transasts onty with nonaffiliated entities, the potentiol for inappropriate cross-subsidiaation of a non-utility associate company or the plcdgc or encumb(ancc of utility assets for the benefit of an associate company is generally not prescnt. "llherefore, cornpliance rvilh Exhibit M could bc satisfied with n showing that a public utility transacts only with nonafliliated cntities.").ri t8 c.F.R. S 33.2. Page - 7 APPLICATION FOR AUTHORIZATION PURSUANT T0 SECTION 203 OF T}I[ FI]DIRAI- I'OWER ACT Staff_PR_O4 Attachment A Page 7 of 16 '*,hether the Transaction is consistent with thc public interest, Applicant respectfully requests that the Commission waive such information requirements as discussed below, Thc Eract Namc and Address of the Applieant ond lts Principrl Business Offiee * $ecfiou 33,2(a) ll'he name and principal office of Avista are as follow's: Avista Corporation l4l I E. Mission Ave. Spokane, WA 99202 Nrme and Address of the Person Authorized to Reccive Notices and Communications with Reepect to the Application - $ectiou 33.2(b) The following are authorized to receive notice and communications on behalf of Avista: A. B" Jeff Schlect Senior Manager FLT.RC Policy and Transmission Services Avista Corporation l.ll l U. Mission Ave."*MSC-I6 Spokane, WA 99202 i e fT. sch I ect(4av i stacom. c om 509495485r Michael C. Andrea Senior Counsel Avista Corporation l4l I E. Mission Ave.-MSCI-I7 Spokane. WA 99202 michael. andrea@avi stacorp.com sag-495-2564 Applicant requests that thesc per$ons be placed upon the official service list compiled by the Secretary of the Commission for this proceeding pursuant to l8 C.F.R. $ 385.2010. C. All Business Activities of the Applicant, including authorizations by charter or regulatorT approyal - Section 33.2(c[1) The business activities of Applicant are described in Section III above. Accordingly, Applicant requests a waiver of thc requiremcnt to file f;xhibit A. D.A list of all enerry subsidiaries end energr affiliates, percentage ownership interest in sueh subsidiaries and affiliates, and a Page - 8 APPLICA'IION I]OR AUTHORIZATION PLJRSUANT TO SECTION 203 OF THE FEDERAL POWER AC]T Staff-PR-o4 Attachment A Page 8 of 16 description of the primary business in which each energgr subsidiaty rnd afriliate is engaged. 'fhe Transaction does not allbct any of Avista's affiliates. Because the Transaction does not afl-ect any of its atliliates. Applicant respectfully requests waiver of the requirement to file Exhibit I]. Organizational Charts Depicting the Applicant's Current and Proposed Post-Transaction Corporate Structurrcs Indieating All Prrent Companies, Energt Snbstdiffries and Energr Affiliates - f 8 C.F.R $ 33.2(cX3) Applicant respectfully requcst$ waiver of the rtquirement that it submit organizational charts depicting its corporate sffucture belore and after the Transactions because the'fransactions do not affect its corporate structure. Dcscriptions of All Joint Yentures, Stretegk Alliances, Tolling Armngements or Other Business Arrangements, Includiug Transfers of Operational Control of Trrnsmission l'rcilities to Commisrion Approved Regional Trsnsmission Orgrnlzrtionen Both Currento rud Plsnned to Occur lVithin a Year from the Date of S'iling, to Which the Applicrnt or its Parent Companies, Energy Subsidiaries, end Enerry Afriliates is a Parfy, Unless the Applicant Demonstrates that the Proposed Trrnsaction Does not Affect Any of its Business Interests -r8 C.F.R $ 33J(c)(a) The Transaction has no effect on any joint yentures, strategic alliances. or other business arrangements of Applicant. Therefore, to the extent necessary, Applicant requests waiver of the requirement to provide information in Exhibit D to this Applieation. Page - 9 APPLICATION FOR AUTHORIZATION PURSUANT TO SECTION 203 OF THE FHDERAI, POWER ACT Staff_PR_o4 Attachment A Page 9 of 16 f,. r G. Thc ldentity of Common Olficers or l)irectors of Parties to the Proposed Transaction - I8 C.f.R $ 33.2(cX5) Applicant has no officers or directors in common with BPA, and none resulted from rhe consummation of the Transaction. Therefbre, Applicant respectfully requests waiver of the requirement to file Exhibit U. H.Dccription and Location of Wholesale Power Sales Customers nnd Unbundled Trensmission Serviees Customers Served by the Applicart or its Parent Companies, Subsidieriee, Afriliates, and Associnte Comprnies - l8 C.F.R. $ 33.2(cX6) The Transaction will not alter any other existing wholesale power sales or transmission services. Applicant requests waiver of the requirement to tile information in Exhibit F. A Description of Jurirdictional Fscilities Ownedo Operated, or Controlled by the Applicant or its Parent Companies, Subsidiericsn Afliliatcs, rnd A*rocieted Comprnies - l8 C.F.R. $ 33.2(d) The jurisdictional thcilities acquired by Applicant in the I'ransaction are the lhcilities identified in Exhibit I. Applicant requests rvaiver of the requirement to tile additional information in Exhibit G. A Narstiyc Description of thc Transaction for which Commi*gior Authorization is Requested,Including: (t) the ldentity of All Parties Involved in the Trrnsaefion; (2) AII Jurisdictional Fmilities and Securities Associated With or Affected By the Trarsactior; (3) the Comideration for the Transactlon; and (4) the Effect of the Traneaction on Such Jurisdictionrl Facilities rnd Securities - I8 C.r.R $ 33.2(e) T'he inlbrmation rcquested by Section 33.2(e) of'the Commission's regulations is provided in Sections IY above and in Exhibit I. Therefore. Applicant requests waivet of the requirement to file Exhibit H. Page - l0 APPLTCATION fOR AL,TITORIZATION P{"JRS[JAN'[ T0 SECI'ION 203 OF TTIH FEDERAI, POWER AC'T Stafi-PR-04 Attachment A Page 10 of 16 I. ,l All Contmcts Relatsd to the Trrnsaction Together rtrith Copies of AII Otber \ilritten Instrumeats Entered Into or Proposed to be Entered Into by the Parties to the Trnnsaction - It C.F.R. $ 33.2(0 Applicant submits the contract regarding the Transaction in Exhibit I. A Ststement Explaining the Flcts Relied Upon to Demonstrate thnt fhc Transsction is Consistent with the Public Intcrest - lE C,F.R $ 33.2(g) lhe facts relied upon to demoustrate that the'I'ransaction ae consistent with the public interest are described in Sections IV and V above. Therctbre, Applicant requests wBivcr of the requirement to file Exhibit J. M, A General or Key Map Showing the Properties of Each Party to the Transaction - 18 C.F,R. $ 33.2(h) '[he Transaction would not result in any new combination of market participants and, therefore, a map would not convey any useful information regarding the proximity of properties not previously under common control. 'fherefbre, Applicanl requests waiver of the requirement to file Exhibit K. N.Identify tbe Licenses, Ordors, or Other Approvrls Required Froxr Other Regulatory Bodies in Connection with the Proposed Tmnsaction, and the Status of Other Regulntory Actlons - l8 C.f.R. $ 33.2(i) Avista will make a filiag with the Washington Utilities and Transportation Commission and the Idaho Public Utility Commission. No other approvals are required. 'l'heretbre, Applicant requests waiver of the requirement to file Exhibit L. Page - I I APPLICATION FOR AUTHORIZATION PURSI"JANT TO SECTION 203 OF: THE FEDERAI, POWER ACT staff-PR-O4 Attachment n Page 11 of '16 K, L. o.An Explanation, With Appropriate Evidentiary Support for Such Explanationn of How the Proposed Trunsaction \{i$ Not Result in Cross-$uhsidization of Non-Utility Assoeiate Company or the Pledge or Encumbrrnce of Utilify Assets for the 3onefit of en Associate Company - l8 C.F.R. $ 33.20) As described above. the Transaction involves a conveyance and acceptance of certain facilities between non-affiliated entities. The Transaction is among the class of transactions which the Commission has recogniz.ed as turlikely to raise cross- subsidization concerns and thus are within one of the Commission's "sat'e harbors." Further, thc 'lransaction does not involve the issu,ance of any security or the pledge or encumbrance of utility assets for the benetit of an associate company. Based on the fbregoing. Applicant respectfully requests waiver of the requirement to lile Exhibit M. Page - 12 APPLICATION FOR AUTHORIZATION PURSUANT T0 SECTION 203 OF'THE FEDERAI, POWIiR ACT Staff_PR_04 Attachment A Page 12 of 16 Y. PROPOSED ACCOUNTING ENTRIES In accordance with l8 C.f .R. $ 33.5. the proposed accounting entries for the Transaction with sufficient detail to indicate the effects on all account balances are as follows: Jos.n6l Nunrb?r A(counl Numbs frthsof Arcentrtdlouffil lnlry Dct(ription I xol Eh(t h n ,n kt Snicr loi €hctrk Pl€rt Purdrnredor Sokl tq{tgfint obts,'sd lfim a?A orfulnal &il. z r0l EL(*PLntinsrfncc lO2 Ehcttk Planl PuEh6sdor Sold tareilrnls &l,.itLal fto.^ nPA 3 ro2 Ele($kPlamFurctl.rldot5aH m Arcuwl.tld Pmvirion fo, D.prect}tion ktarulored Acorcaldtwt dt BPA rqut,,ne fia g"bi! _ sr!!!! 77W42.@ 7n,782-00 18s,o(n.00 r85,000.00 501,882.00 501,887^00 859,361.47 859.361.47 114,t41,54 l12.!4l.tt l8sJ19.S3 285jr9.93 i?cord frrnr{sr o{ AYln ,5!6tt to IPA itrdd Cb.rht tnldE 4 102 fhrtrkFlrrtpunh.sedorsold 101 EhcEkPLrnhService Equirtrcn Vp/tEfarltd @ aPA o,i9tul cast 5 108 Arcun etedProvkionlorDaplaclaton loil thclrk PLnt PurEhared or Sold Aeufrulow OegQdotanlat Equlpttz,t{ot rloftert @ ,.pA 5 ll4 EhctrkPLntAcqslltionAdprrnlnnr l(n thctrlc Plr0t PurqbldorSold aeadng lha ,02 ocr,,wt olter lhe t,?,Il[lrt ol ,ropany YtrRIFICATION Attached hereto as Attachment I is the signed verification required by l8 C.p.R. $ 33.7, Page - l3 APPLICATION FOR AUTHORIZATION PURSUANT TO SECTION 203 OIT TTIE THDERAT, POWNR AC'T Staff_PR_O4 Attachment A Page 13 of 16 vI. vII. CONCLUSION WHEREFORE, tbr the foregoing reasons. the Applicant respectfully requests that the Commission consider this Application and issue an order granting the requested waivers and authorizing the Transaction under section 203 of &e FPA. Respcctfully submitted, AVISTA CORPORA"I"ION ls/ Michael G..*ndrea Michael G. Andrea Senior Counsel Dated: August 31.2018 Page - 14 APPLICATION IOR AUTHORIZATION PLTRSIJANT TO SECTION 203 OF THE FEDERAI" POWfiR ACT Staff-PR-04 Attachment A Page 14 of 16 ATTACHME1YT 1 Staff_PR_o4 Attachment A Page 15 of 16 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Avista Corporation Docket Nos. EClS- Verification Pursuant to l8 C.f.R. $ 33.7 STATE OF WASHINGTON ) ) ss. County ot'Spokane ) The undersigned, being duly sworn. states that he is the authorized representative of Avista (lorporation, that he has read the lbregoing application and knows the contents thereol and that all ot'the statements contained therein with respect to Avista Corporation and its aifrliates are true and correct to the best of his knowledge, infbrmation, and belief ) ) l_UJ-- Deanis Vermillion President Avista Corporation SIGNED AND SWORN to beftrre me or tt i*.{}to,v of August. 2018 lrrL,Ut-Lw a' i;e i t g0TAR), Pugt-tc NOTARY PLJBLIC in and for the Srate of Washington. residing at Spokane. Commission Expires: df-tt? -gCP { Staff_PR_o4 Attachment A Page 16 of 16