20181221Staff 1-15 to Avista.pdf

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
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Street Address for Express Mail:
472W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF AVISTA AND
CLEARWATER PAPER FOR APPROVAL OF A
POWER PURCHASE AND SALE AGREEMENT.
CASE NO. AVU.E.18-13
FIRST PRODUCTION
REQUEST OF THE
COMMISSION STAFF TO
AVISTA CORPORATION
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record,
Sean Costello, Deputy Attorney General, request that Avista Corporation (Company) provide the
following documents and information as soon as possible, or by FRIDAY,
JANUARY 11,2019.
This Production Request is continuing, and the Company is requested to provide, by way
of supplementary responses, additional documents that it or any person acting on its behalf may
later obtain that will augment the documents produced.
Please provide answers to each question, supporting workpapers that provide detail or are
the source of information used in calculations. The Company is reminded that responses
pursuant to Commission Rules of Procedure must include the name and phone number of the
person preparing the document, and the name, location and phone number of the record holder
and if different the witness who can sponsor the answer at hearing if need be. Reference IDAPA
31.01.01.228.
FIRST PRODUCTION REQUEST
TO AVISTA
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1 DECEMBER 21 , 20 I 8
In addition to the written copies provided as response to the questions, please provide all
Excel and electronic files on CD with formulas activated.
REQUEST NO. 1: Please estimate the cost impact of replacing the current2013
Agreement with:
a. The 2018 Agreement
b. An agreement based on IRP-based avoided cost pricing.
For part b, please provide a detailed explanation of the calculation of the IRP-based avoided cost
price. These analyses may be based on either test-year data from the last general rate case or
data for a recent consecutive l2-month period. Please provide workpapers in Excel, with
formulae intact.
REQUEST NO. 2: Please describe any controls or risk mitigation that the Company
will employ to ensure that the revenue Avista receives from energy generated by Clearwater is
no less than the amount Avista pays for the power Clearwater generates minus Avista's share of
the REC benefit.
REQUEST NO. 3: Please describe the actions the parties took to ensure that the
proposed contract rates would not exceed Avista's avoided costs pursuant to l8 CFR 5 292.304
REQUEST NO.4: Page2 of the Petition states "these generators are Qualifying
Facilities ("QF") pursuant to the Public Utility Regulatory Policies Act of 1978 and 18 C.F.R.
Part292." Please explain the following.
a. Were the contract price negotiations based on an IRP model run, pursuant to
Commission Orders on IRP-based avoided cost pricing? Order No. 32697
requires that "when a QF project is larger than the eligibility cap set for access to
published avoided cost rates, the avoided cost rates for the project must be
individually negotiated by the QF and the utility using the Integrated Resource
Planning Methodology." If the answer is yes, please provide workpapers showing
the inputs and outputs of the model run.
FIRST PRODUCTION REQUEST
TO AVISTA 2 DECEMBER 2I, 2018
b. If the answer to (a) is no, why weren't the avoided cost rates used as the basis to
establish the rates for this Agreement?
REQUEST NO. 5: Please describe how the Parties arrived at"afle-year PURPA rate"
of $24.50 per MWh. Please provide supporting workpapers.
REQUEST NO. 6: Page 4 of the Petition states, "Avista will sell to Clearwater all of
Clearwater's required energy and capacity at the new Schedule 25P Block 2 PURPA rate of
$24.50/MWh and would purchase all of the output from Clearwater's Generation, including the
RECs at the same PURPA rate of $24.50/MWh." However, page 6 of the Petition states, "The
Block I retail energy rate will continue to capture Clearwater's net load at the retail meter priced
at the existing Schedule 25P energy rate. The Block 2 energy rate will capture Clearwater's
generation load at the generation meter priced at the PURPA contract rate of $0.0245 cents per
kwh." Please clarify the apparent contradiction between these statements. Specifically answer:
a. What rate will Avista purchase Clearwater's generation?
b. What rate will Avista sell electricity to Clearwater Paper, Block I or Block 2?
REQUEST NO. 7: The Petition states, "All costs associated with non-performance by
the Third Party will be the sole responsibility of Clearwater, and would be netted against any
future payments from Avista to Clearwater under the 2018 Agreement." Please describe how
non-performance is defined in context of the contract.
REQUEST NO. 8: Page 4 of the Petition states, "Absent another agreement between the
Parties, upon termination or expiration of the 201 8 Agreement prior to the expiration of the 20 I 8
Agreement, the Parties will revert back to the terms of the 2013 Agreement such that it will
generate into its own load under the same rate structure that is in place today." Please clarify
how the agreement can expire prior to the expiration date. Or, should it read, ". . . prior to the
expiration of the 2013 Agreement . . ."? Or, should it read similar to page 5, fl (a), e.g
"termination" or'osuspension"?
FIRST PRODUCTION REQUEST
TO AVISTA J DECEMBER 21, 2OI8
REQUEST NO. 9: Page 5 of the Petition states "the term of the 2018 Agreement is four
years and eleven months, beginning on February 1,2019 and ending on December 31, 2023" .
However, page 6 of the Agreement states that "this agreement shall be effective on December
15,2018, or such other date set by Commission Order ("Effective Date"), and shall terminate at
2400 hours on December 31, 2023, unless terminated earlier pursuant to this Agreement".
Please reconcile the February 1,2019, and December 15, 2018, effective dates.
REQUEST NO. 10: Page 7 of the Petition states, "Clearwater would no longer use its
Generation to offset its own load." Further, in the proposed agreement, "Delivered Net Output"
is defined in paragraph 5(a) as "the total amount of electric power generated by the Project
bundled with all RECs associated with such electric power generated by the Project and
delivered to Avista at the Points of Delivery." This statement and contract provision indicate
that generation will not be netted against consumption (despite calling it "Delivered Net
Output"). However, page 6 references "Clearwater's net retail meter" and "Clearwater's net load
at the retail meter." Please clarify whether Clearwater's generation and consumption would be
net under the proposed agreement or if the references to net retail on page 6 are in error.
REQUEST NO. l1: Page 7 of the Petition states "in the event that the agreement with
the Third Party is terminated, for any reason, the 2018 Agreement may be terminated and, in
such case Clearwater will revert to generating into its own load pursuant to the terms of the 2013
Agreement." Does Avista have the ability to cancel the 2018 Agreement and revert back to the
2013 Agreement for other reasons? Please explain.
REQUEST NO. 12: Please explain what happens if the 2018 Agreement-which has a
proposed term until December 31,2023-terminates after June 30,2021, the date the 2013
Agreement expires per Order No. 33350.
REQUEST NO. 13: Page 8 of the Petition states "Table No. 1 below summarizes the
differences between the curuent 201 3 Electric Service Agreement and the new 20 1 8 Power
Purchase and Sale Agreement." However, Table No. 1 is not included in the Application. Please
provide Table No. 1.
FIRST PRODUCTION REQUEST
TO AVISTA 4 DECEMBER 21 , 20 I 8
REQUEST NO. 14: Is the facility a topping-cycle cogeneration facility or a bottoming-
cycle cogeneration facility, as defined in 18 CFR S 292.202? Please explain.
REQUEST NO. 15: Does the facility currently meet the requirements of 18 CFR
5 292.205? Under which subsection does the facility meet the criteria to be a qualifying
cogeneration facility under PURPA? Please explain.
Dated at Boise, Idaho, this L(+ day of December 2018.
Edward
Deputy General
i:umisc:prodreq/avuel8. l3ejyybemlrf prod reql
FIRST PRODUCTION REQUEST
TO AVISTA 5 DECEMBER 21,2018
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2I't DAY OF DECEMBER 2018,
SERVED THE FOREGOING FIRST PRODUCTION REQUEST OFF THE
COMMISSION STAFF TO AVISTA CORPORATION, IN CASE NO. AVU-E-I8-I3,
BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWNG:
MICHAEL G ANDREA
SENIOR COUNSEL
AVISTA CORPORATION
I4I I E. MISSION AVENUE-MSC-I7
SPOKANE W A 99202
E-MAIL : rnichael. anclrea(Oavistacorp. corn
avi stado ckets (P,avi stacorp. corn
PETER RICHARDSON
RICHARDSON ADAMS, PLLC
P. O. BOX 7218
BOISE ID 83702
E-MAIL : peterfg)ri chardsonadams.com
MICHAEL S GADD
SENIOR VP & GENERAL COUNSEL
CLEARWATER PAPER CORP
60I W RIVERSIDE AVE, SUITE 11OO
SPOKANE WA 99201
SECRE
CERTIFICATE OF SERVICE