20190722Avista to Staff 41-84.pdf

Avista Corp.
1411 East Mission P.O.Box3727
Spokane. Washington 99220-0500
Telephone [phone]
TollFree 800-727-9170
July 19,2019
AEstsrt
RTC E IVED
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lir*l-iC r-'U"1LlC
-i I lLiTl iS COlttMlSSl0N
Corp.
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83702-0074
Attn: Edward Jewell
Deputy Attorney General
Re: Production Request of the Commission Staff in Case Nos. AVU-E-19-04
Dear Mr. Jewell,
Enclosed are Avista's responses to IPUC Staffs production requests in the above referenced
dockets. Included in this mailing are the original and two paper copies of Avista's responses to
productionrequests: Staff41-43,47,55,65,69170171183&84. Alsoenclosedonthreeseparate
CD's are copies of Avista's responses to the production requests. The electronic versions of the
responses were emailed on 07ll9l19.
Also included both on paper and on a separate CD are Avista's CONFIDENTIAL responses to PR
041C, 043C, 047C, 069C & 070C. These responses contain TRADE SECRET,
PROPRIETARY or CONFIDENTIAL information and is separately filed under IDAPA
31.01.01, Rule 067 and233, and Section 9-340D,Idaho Code. It is being provided under a sealed
separate envelope, marked CONFIDENTIAL.
If there are any questions regarding the enclosed information, please contact Paul Kimball at (509)
495-4584 or via e-mail at [e-mail].
Sincerely,
Paul Kimball
Manager of Compliance & Discovery
Enclosures
CC (Email):IPUC (Hanian)
Idaho Forest Group (Miller, Williams, Crowley)
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
DATE PREPARED: 07 ll8l20l9WITNESS: Elizabeth Andrews
RESPONDER: Annette Brandon
DEPARTMENT: State & Federal Regulation
TELEPHONE: [phone]
REQUEST:
Per Andrews Direct Testimony, Page 26,Line l3-18, please provide the confidential third party
salary surveys used to determine salary increases and salary range updates.
RESPONSE:
Please see Avista's response 041C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233, and Section 9-340D, Idaho Code.
Please see Staff PR_041C Confidential Attachment A for the confidential salary surveys used to
determine salary increases and salary range updates.
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff - 041
JURISDICTION
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff - 042
DATE PREPARED: 07 11812019WITNESS: Elizabeth Andrews
RESPONDER: Annette Brandon
DEPARTMENT: State & Federal Regulation
TELEPHONE: (s09) 49s-4324
REQUEST:
Please provide additional descriptions of the internal factors used to determine Executive Labor
adjustments. Also, please provide the Compensation Committee minutes showing approval for
the level of executive officer base salary effective March 2019.
RESPONSE:
The Compensation Committee of the Board of Directors (Board) determined and approved the
level of executive offrcer base salary effective March 2019, as well as all other components of
executive officer compensation. The Compensation Committee reviews the base salary of all
executive officers at least annually.
When determining appropriate adjustments in base salary, the Compensation Committee reviewed
performance ratings of each of our executive officers as well as performance results from the prior
year to determine how they performed against specific targets and operational goals established at
the beginning of the prior year. For example, our CEO's annual performance goals for 2018 were
generally related to strategic planning, financial performance, safety targets, diversified energy
resource management, regulatory and legislative matters, succession planning, governance and
customer value delivery. When reviewing the CEO's base salary for 2079, the Compensation
Committee agreed that our CEO had met the established goals for 2018 perforrnance.
In addition to individual and company performance, the Compensation Committee considers the
market data provided by its consultant and each executive officer's job complexity, experience,
breadth of knowledge and responsibilities, which may include electric and natural gas utility
operations, as well as subsidiary operations, and recognizes that the Company operates in several
states, which requires quality relationships and interaction with multiple regulatory agencies.
All Board of Directors notes, including Compensation Committee, will be available for Staff s
on-site visit the week of July 22,2019.
JURISDICTION:
CASE NO.:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff - 043
DATE PREPARED: 07 ll8l20l9WITNESS: Elizabeth Andrews
RESPONDER: Annette Brandon
DEPARTMENT: State & Federal RegulationTELEPHONE: [phone]
REQUEST:
Company witness Andrews mentions a comprehensive benefit evaluation study, BENEVAL, on
page 29 of her testimony. Please provide a copy of this study.
RESPONSE:
Please see Avista's response 043C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233,and Section 9-340D,Idaho Code
As a condition of Willis Towers Watson conducting the BenVal study for Avista's union and
salaried benefits, Avista agreed in writing that the results of the study shared with third-parties,
including unions and public utility commissions, would be aggregated. This is to avoid the
appearance of collusion as outlined in the Antitrust Guidelines for Collaborating among
Competitors, issued by the Federal Trade Commission and the US Department of Justice in April
2000. The Guidelines were reissued in October 2016, specifically targeted towards Human
Resources professionals. One of the guidelines states, "Other things being equal, the sharing of
individual company data is more likely to raise concem than the sharing of aggregated data that
does not permit recipients to identify individual firm data."
That said, the Company has received a waiver for disclosure of the report as included in
StaflPR_043C Confidential Attachment A, with an accompanying 2019 Release of Data to Idaho
Commission letter.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUzuSDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staft047
DATE PREPARED: 07 12012019WITNESS: James Kensok
RESPONDER: Graham Smith
DEPARTMENT: Enterprise Technology
TELEPHONE: (s09) 49s-8466
REQUEST:
Regarding the "Financial & Accounting Technology" business case (Kensok Direct Testimony,
Page 15), please provide a detailed list of all accounting, financial, and human resource computer
applications that are currently being used, and a list of other applications needed. Of the
applications currently being used, please provide when they were last updated and expected to be
replaced or retired.
RESPONSE:
Please see Avista's response 047C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233,and Section 9-340D,Idaho Code.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-55
DATE PREPARED: 0711812019WITNESS: Mark Thies
RESPONDER: Ian Mclelland
DEPARTMENT: Corporate Accounting
TELEPHONE: [phone]
REQUEST:
Regarding the Company's response to Production Request No. 23, please provide copies of lease
agreements and joumal entries for the following leases:
a. Mt. Riverbed, Noxon, Mt - Land lease for Generation Facilities
b. West Twin, Moscow, ID - Communication Site
RESPONSE:
Please see the attached copies of the lease agreements (StaflPR_O5S Attachments A & B) as well
as the journal entries associated with these leases (StaflPR_055 Attachment C). Note, we have
provided joumal entries for 2019 to (a) add the leases to the balance sheet in accordance with
Accounting Standards Codification (ASC) 842 (Leases) effective on January l, 2019 and (b) to
record the related lease expense in 2019. We have also provided example journal entries for these
2 leases for 2018 and20l7.
HYDROPOWER SI E LEASE
Pursuant to the N{ontanr }lydroelech"ic Resource$ Act, Section 77-4-2A1, MCA,
et seq., this l{ydroporver Site Lease ('-["ease") is entered into ellectivr us of Janu*ry l,
200?, (tho -'f:ffective Date') betwcen the STATII Of *!OI\{TANA, STATA BOARD
Of" I"AND COIWMISSIOISERS, {hsreinafter refered to as the "IS,tSg;"), whose
address is P.O. Box 201601, llclena, M'f 59620-1601, and AVISTA CORPORATION,
a corporatir:n organized under the larvs of the State of Washingtr"rn. ("l"SiS.g-t"), n'hose
address is l4l I fiast Missir:n .{venue, *P.O. Bo.x 3727. Spokanlr, WA 9920?-3727. The
Lessor and the l.essee may [:c rcllrred to herein singly a$ "l}.rt]" or jointll' &s "Parties."
RIiCITAt,S
A. 'lhe l-essec orvns and opsrates the C:lark fork Project ii:r rvhieh a nerv
Iicensc was issued by the l;cderal Energy Regulatory Clermmission as FERC Prcrject No.
30511 (the "f,Ii&e*L!-gg.ugg"). {Order /.rsrrng Ne:l', Licsilse, 90 I;ERC'!J 61,167 (?000)).
'Ihe FERC License authorizes Lessee to operate nnd maintain the Noxon Rapitls and the
Cabinet Gorge Developments of the Clark Fork Prqect. Ttre Clurk fork Pr<rject is
located, in part, nn the Clark Fork River in Bonner Cuunty, Idilho, and Sanders C'ounty.
Nlontana. This l,ease pertains to a pofiion of the Clark Fork Project lucated solely on
lsnds owncd by the State of Montana within Montanal
B. 'l'he original licenses for the Cabinet Corge Pmject and lhe Noxon Rapids
Project were issued by Fh.Rf on January 9, 1951 and lr{ay 12, 1955, respsc[ively. Irrom
that time, until March. 2004. the l"esseE believed that it had obtained all praperty rights
fiom the State ol'Moiltana nscessary for those projects ond tht Clark lfork llroject;
C. In October, ?001, Richard Dolan and Denise llaynran cornmenced an
action in Li.S. Districl Court in Missoula, Montana against l-essee ancl other companies,
rvhich raised questions as to the owncrship and uncnmp$nsateil use of'navigablu
rivertreds by rhe l-essee . In March 2004, I"essor intervrned as a plaintiff in the actian.
(^!t*/e e.r ret. Rich*rd Dolan t'. PPL Montana Ll,(', et crl., Causc No. CV-03 167-M-
LBE). The United States District Coun ultimately dismissed the lawsuit due to lack of
jurisdictir:n;
D. In November 2004, PItl.. L{onana, LI-C {'PPL Montana"), PacifiCorp and
l.essee filed a declaratory judgment acdon in Montana First Judicial District Coufi, Lewis
and Clark County as PPL !lltn$*nu, et al y" State ttf Manrora (Clause Nr:. CDV-2004-
846) (the "l"q:ySU:J") in order to dcternrine its righls, if any, to utilize navigable riverbeds,
rvithout cr:mpensation ta the State of Montana. In December. 30t)4, the Statc filesl an
Answer, Counlerclairns and a Motion for $un'rmary Jutlgrrcnt and alltged. among other
things, lhnt [.csscr and other companies had an obligation undcr t]re provisions r:f thi:
Ir,{ontana Ilydrrelectric Resour{cs Act, Mont. Coclc Ann. { 7?*4-201, cr.re{.. to
{:ompcn$ate Lessor tor the use of state-owned riverbeds being uscd firr hydroelcctric
power generation purposesl
Staff_PR_055 Attachment A Page 1 ot 12
I
[, The illontana I':irst Judicial District Court delcrmined in the Lawsuit that
the State eif'N'lontana orvns lhe rive rbed of the Clark f ork River in Sanders County,
Montana in trust for Montana's comm(:n public schools, and therefCIro has a duty to
obtain the f'ull nrarket value of that use by thc Lesxee. 'llerefnre the Statc is entering intCI
this lease to comply with the State's trust duty to obtain the full market value fbr the
disposition of any interest in State school trust lands;
F. Pursuant to the Memorandum of Negotiated Scttlement'l'erms signed on
Oetuber I g, 2007, and the Consent Judgment entered on i{ovember 19, 2007, the Lessor
and i"essee agreed to resolvq all clairns made in thr Lawstlit through t}:e issuance of the
following lease by the State Board of l-and Commissioners;
Wherefore, the Parties hereby agree to thc fbllorving:
l,r.Ast{ 1'}:H"N{s
L l,eased Prcmises. Subject to all the terms and conditions contained
herein, th* Lssti$r hereb,y leases to the Lessse ancl the L*s*ee hcreby leases from the
Lessor thosc lands below the Clark Fork River fur rvhich Avista has not already acquired
a right of use within the Clark Fork Project in Sanders founty, Montana ithe "l.eascd
Prqlnises") as more particularly drscribcd in Exhibit A, for the follnrving term rlescribed
hercin.
?, ["use Term, The tenn of this l,ease (""1'em1") will be deemed to have
commenced on January I, 2007, and will terminate on the earlier oll (a) Febnrary 28,
?0461 or {b) the termination of the FERC License.
3. Pavme nt Date. On or before the first day of Febmary of each year
("PaynrSR! I)atq"), Lessee r,vill pay to [.essor an annual rent ("Rett") for occupying the
I"easetl Fremises during the prer;eding calendar yrar during whic,h the l-eass is in effect.
If the first day of Februar.v is a Saturday, Sunday, Montana or lbderal hr:liday, the
pa),ment will he due on *r hefcrre the nr:xt follorving business day.
4. Rent. 'l"he &mount of the Rent shall be determincd as t'ollorvs:
{.I . On or betbre thu Payn:cnt Date of Febnrary I , 2008, the l-essee
will pay to the Lessor the sum of F-our Million and 00i 100 Drrllars
t$4.000,CI00.00) {"t}irsr: Renl") as Rent firr the l,eased Prenriscs lirr tl"re year 3007
4.? 'l'hereafler, continuing on February 1st of each subscquent year
{the "Adju$tment.Datg"} during the Tr:n:r of this Le$se, the Lessee will pty to the
Lcssor an adjusted annual Rental for the prior year, calculated as follows:
4.?.1 The trase {"&gtglndgX") fbr computing the adjusttt:e nt is
the Consumer Price Index fbr the month of January 2007 (the "lndex
l)glg") as shorvn in the Consumer Price lndex ("C'Pl") krr all tirban
?
Staff_PR_055 Attachment A Page 2 of 12
ConxumsrslAll ltems, baserl on the latest year uscd ar a basr: year hy the
U.S. Department of [,abor'ii Bureau of l.atror Statistic.c.
4.2.2 The index fi:r the Adjustment Dute rviil be comput*d as a
percenkge of the Base Index (the "Percentage Adjus "). ['or
exanrplc. assuming the Base Index on the Index Date is 200 and thr index
lirgure on thr Adjustrnent Date i* 210, the Percentage r\djustment to be
applied is 210 divided by 200, yie lding 105'ln.
4.?.3 'l"he [{ent tor the period buginning on the Adjustment Date
and continuing until the ne.rl Adjustment Date will be equal to the Ba"re
Rent plus the Percentage Adjustment. f or example, if the Fercrnt$ge
Adjustment for year 2008 is 105%, Rent li:r year ?008 rvould be the
product of $4,000,000 as multiplied by 105%, which equals
$4,200,000.00.
i4.2.4 If the C'PI is no longer puhlished, anothsr comparahle
index, generally recognized ils fluthfirit$tite {"$ub!!il$te lrtdq;$") rvill be
substituted by agreement of the Parti*s, It the Pnrties are unable to agree
on a SubstitutE lndex rvithin thirry {30) days aller demand by either Party,
either Party may apply to the chief ofiicer r:f the Research & Analysis
Bureau of the Workforce Services Division of the Montana Departn:cnt r.rf
l,nbor & Industry, or it.s sur;cessor or equivalent" to select the Suhstitute
Index.
4.2.5 If the lease lerminates or Avisla's obligation tt^l pay rent
seases prir:r to the t:nd af any calendar year, Ke nt u,ill he prarilted taking
intr: account the portion of the year during rvhich the l,ease is in effect.
4.3 Not later than June 30, 20 I 6, the Parties will nreet and
confer to dcBrmine whether the annual Rcnl as deternrined herein remains
consiritent rvith the principles of law as applied m the facts. In the svent
either Party helieves the annual Renl is no longer is consistent u,ith
applicable larv applied to the fac[s, the Parties rvill negotiate in good faith
to detennine an appropriate adusted rental rate .
4.4 Ifthc parties do nat agree upon an adjusted rental rate by
$epte mher 10, 2016, the p*rties will engtge in advisory arbitration and
submit the arbitrator's reconlmenelrtion to the Board of Land
Commissioners for appnrval.
4.5 All payments required try this Lease will be nrade tei the
Mantana l)epartment of Natural Resources and Clonsen'ation, I 6f 5
Eleventh Avenue, P.0. Btrx 201601, l{elena, M'f 5t)620-1601, or to such
other payee as designated in rvriting by the State of M$ntnna.
3
Staff_PR_0ss Attachment A Page 3 of 12
4.6 Parti*s agree that Renr as determined in accordtnce with
this l."ease is the lull market rental value uf the Leased Premises tbr rhe
Term of this Lease.
4.7 ln thrr event of a disputc over rental amounts, rental
payments made shall be made by the l-essee undrr proiest. Any rental
paynlellts nrade under protest shall be placed in an interest-hearing eEurow
accouflt by the Lessor. The rate of interest shall be equal to the the rate of
return cf the unified investment program adniinistersd by the board qrf
investments pursuant lo 1t l7-6-rO t, MCIA. "I"he validity of any payment
made under prol$$t shall bt: rEsolved hy a MAPA qontested case herrirg
as providcd tr-v paragraph l0 of this llydropou'er Site l-ease. The
prevailing party in any such renkl dispute will be cntitled tn the disputed
rentals as u,ell as the interest accrued upon those rentals.
5. Reopener{. l"he Farties agree thilt the amrunt of Rerrt due under this
Lease may be reopenerJ and adjusted if any of thc follow'ing events occur:
5.1 $'Iost Fayored Natiqns Clsuse. If, cer-party to the Lawsuit, FPL
I,lontana, either hy litigation through judgmenl and any appeals. or through
settlement, receives a delermination that ths full n:arke t rental value of its land
inlerests at is$ue in the litigation is based upon factors, that if applied 1o L,essee,
rvould result in & more favorable rental rate than the Rent establisheel by Sections
4.1, 4.? antl 4.3 eif this Lease, then the Rent will be adjusted by an amount
ne**ssary tn reflect the more fuvorable determination, Fur puqlo$€s of this
clause, a more lavorable detsrmination will occur if the aggregate annual rent
detrrmined {irr P}'t- L.'lontana by settlement or litigatiolr (' I}ete.nuinq{l PPI, Rqnt"'}
is less than 48% of the aggrcgate amount of base ycar rent clcirred by l-essor in
its case in chief against PP[. Montana ("elaime.dP-l][. 8.ent'"] in the Larvsuit. In
the event of a rnore favoratrls determination, the $4 million base annual Rent
established by Scction 4.1 of this Lease to be paid by l-essee rvill be reduccd
retroactively $tarling on the el$tc of final judgment on the PPl" Mor:tnna claims, or
tlate r:f settlcment, by 0 percentage equal to the Detcrmined PPI- Rent dividcd by
the Claimed PPL Rent. (See fi.rhihit B flor an illustration eif the calculation.]
5.2 Reeippnsr for Subseq$ent Governmental, Acliqn. lt. during the
"l"erm of this l..ea:;e, the Board of l.and Commissioners, the Monuna l-egislafur*,
the l)epartmcnt olNatural Resources and Conservatiqrn, or any other State entity
rvith jurisdiclion, enacls or adopts a rental stalilts, rulc, or poli*y applicabl* t*
leases issued undcr the l"Iydroelectric Resources Act that rvould result in a rent
payment more l'avorable to Lessee,lhen the Rent shall be modified r€troactively
starting ein the date of enactrnent ar adoption to incorporate thc more favorable
TETTNS.
4
Staff_PR_055 Attachment A Page 4 of 12
5.3 lleonener fpr $uh$crtqrnt Judiqi*l llqtsrmlnntion.
5.3.1 Il, during the Term of this Lesse, the reach of the Clark
Fork l{iver rvithin the boundaries erf the Leascd Premises is determined by
e court of competent jurisdicti*n to lx nnt navigoble f$r title purpo.ses, or
that the State of lvfontana oth€nvise does not haye title to the riverbed of
the Clark Fork River in Sanders County, I-essee's obligatiern to pay Rent
shall cease.
5.3.? Il during the term of this Lease, a court of competent
jurisdiction determines thal compensation in the nature r.rf rent orved tr: the
State is less than rvhat is set forth in this Lease . [.essee's obligation to pay
Rent willbs reduced frorn the date of tletermination to reflect a nrethod of
calculating Rent thal is consistent w'ith the court's determination.
6. AssifilqInentq, 'l'his l"rase is assignable by the l.essee only with the prior
rvritten approval of thr: Lessor. I{owever, the the Lessor shall approve assignment of this
lease to any succe$sor-in-interest to the abovedescribed FERC license who possesses lhe
apparent financial ability to csrry o$t the lessee's duties under this lease.
7. I$rpfpremqpts.. The Lessee is authorized to construct, operatc and
maintain any and all improvements t"lmpraqgment$") necessary to cr:nduct the
operations described in thc above-described FERC License, as such licertse may be
amunded from time to time. Lessor and Lessee acknou'ledge that owncrship nf any
lmprnr.ements tbllilrving thc snd *f tht Term shall remain with l.,essee, subject tn the
provisions of the Federal Power Act and sny interests of the Llnited States.
8. IndeqrnifiS.Stiq& ;\s a sondition ol"the grant the above-described Lease,
the Lcssee, and its successors and assigns, hereby agree to indemnify, defend rvith
counsel acceptflble to the State, and holtl harmless the Statc of Mr:ntana, the State Board
of i"anti Commissioners, the Montana Department of Narural Resources and
L'onservation, and thcir tlfficers, agents, employees, and reprcsentatives from and against
all claims antl liahilities arising in n'hole or in part or in any m;mrl{:r out of thc Lessc*'s
design, placenrent, allowancc, exislence, constmction, inspection, public use, operation,
and maintenance of any improvements upon the above-described lands, including all
repairs, restt:ration and rehuilding made at eny time thereaJler, rvhether or not due to the
alleged negligunce of the stute. Thls duty to defend and indemnify shall extrntl to all
actions, administrative proceedings, judgments, damages, punitive riamages. penalties,
fincs, costs, liabilities, interest, or losses, sums paid in settlement of claims, attorney's
fees, consultant fecs, sxpert witness fees, as well as any fees, costs, or expenses incurred
by the State in enfor*ing this indemnity. Not$.ithstanding anything u.) the c{)nffary in this
paragraph, the Lessee shall have no liability for losses to the extsnt they are caused by or
result from the actions or omissions of Lessor. The duty tii defentl and indemnify shall
survive the tcrmination of the above-described Lease.
5
Staff_PR_055 Attachment A Page 5 of 12
9. Control a#* kriffn Indemxification'During the existence of the above-
*Jesr;ribed l.sase, the Less*, ond its $ucce$sors, and assigns, shall have contr<ll *nd
pnssession of the abr:vs-descrihed Prop*rty for hydroporver purposes, and the State shall
havE no Iiabilities, obligations or responsibilities rvhatsoever rvith respect thereto or rvith
respect to any plans or specifications submittcd to any Goventmental Authority. The
Statc is not tl're agent of the Lessee onrl the Lessee is not the ogent of the State. Any
review of such plans or spcci{ications by the Lessor i* solely for il.r own purposes, and
the l-essor expressly disclaims any warranly conceming the appropriatene$s of any such
plans or specifications for any purpose. The l-essee hereby covenants antl agrees to
indemnily. defend with counsel acceptable to the State. ancl hold tha State of Mr:nkna,
the State Board of [-snd Commissioners, the Montans l)epar-tment rf Naturai Resources
and Corservation, and their officers, &gents, employees, and reprcsentatives harmless
fiorn and against tny artd all claims arising in whole or in part or in any mannrr out of the
design or lhe use of such plans and spe*iftcations, whether or nol due to the allegerl
negligence *f the state Notwithstanding anything to the contr&ry in this paragruph, the
Lessee shall have no liabilit,v for losses to the extent they are caused lry or result lrum the
actions or omissions of'Lessor. The duty to defend ant{ indemnify shall survive the
temrination of the above-dr:scribed Lease,
10. Breach.and Revgrsion and Remedies. 'l'he l.essee's lbilure to pay the
above-de scribsd rental by the due date or the Lessee's breach of'any other duty CIr
cr:ndition under this I{ydropos,er Sit* Lmse, shall renult in rhe +omin*ti*n cancellation
olthe above-dcscribed ["ease, and the reversion of the Leased lands (o the Stete.
llowever, prior to any cancellation, the Lessee shall be givcn written nolice of such
brcach and 30 days opportuniry to cure the breach before thc cancellation shall become
effective. Should any dispute arise as (o th* Lessee's duties under this Hydroporver Site
I.eass, it shall be given the opportunity for a contested easc hcoring untler the Montana
Administrative Proccelures Act, $$2-4-601, MCIA before the lvlontana Departnrent of
Nahrml Rcsr:urces and Conservation, In such instances. the term ollthis Ilydropower Sitc
I-ease shall be extended urrtil a court of final jurisdiction rcviews the outcome of the
fv{APA hearing.
I l. Taxrs. The intcnt of both parties is that this l-euse shall not rei;trl+in-a
alfect any tax payments or assessmcnts owed by the Lessee, and by entering intn this
Iiydnrporver Site l"ease. the l."essee does not waive rny rights or obligations &s to the
peryment of taxes.
12. No \Yarra$tv of Titlc, It is understood and agreed that this lease is
issued r:nly under such title as the State of Mr:ntana may now have or hereafler acquire,
ancl, other than a reduction in rent due a* provided in paragraph 5.3 above, that lhe Lessor
shall not be liable fnr any damages sustained by the Lessee in the event the Lessor does
not have the title to the leased lanils r:r the l,essee is found to have possessed a prir:r right
nr easement far its operations upon the leased lands describetl herein.
6
Staff_PR_055 Attachment A Page 6 of 12
13. lnterferencq. The Parties recognize that the leased premise is a public
watenvay of the State of Montan* and subjcct to the rights of the public for the
recreational usc of streams. "l}te L.essor t'urther resen'cs thc right to issuc additional
leasqs for the use ofthe above-describud lands, provided that such leases and uses shall
not in any manner interfure with the Le ssee 's oporation of the Clark Fork Project. l.essor
will notify Lessee in writing prior to granting any third party the use $r occupy any
prlrtion of the Leased Premises tbr rny purpose . Lessor also will not use, nor will Lessor
permit its employees, lessess, licensees, or agents to use. any portion of the I"eased
Premises in any way, which interllores with the operations of Lessce or the rightr of
Less$e under this l"ease or the FERC License . Lessor will cause such interlerence to
cease \,vithin lbrty-eight hours afte r r'witten rcceipt of nfttice of inter{i:n:nce from L*ssee.
In the event any such inlerfer*nce does not cease rvithin the cure perioil then the I'arties
ar:knorvlcdge that Lssliee r.rill suffer ineparable injury. and l,essee rvillhave the right, in
addition to any other rights that it ma1'have at law or in equity, to elcrt to enjoin such
interference upon notice to l.essor.
14" il{ircelkneous.
14.1 Amen{qlgnt/}Yaiver. This l,ease cannot be anrended, modified or
rcviscd unless done in writing and signed by an authorized agent of Lessor and an
authorized agent of the Lessee. No provisir:n may be waived except in a writing
signed by both Parties.
i4.2 Bindine fffest. The terms and conditions contained in this i.ease
will run rvitlr thc LEascd Prenrises anrj bind aud inure to thc bcnefit of the Parties,
their respective heirs, ex*cnttlr$, administrators, successors and assigns.
l4.l Hntire &sreemcnt" 't'his Lease and the Conssnt Judgrnent
att*ched he retn as Exhibit C, all heing e pan herecrl; conntitutc the cntire
ilsreement of the Parties hcreto.
14.4 (ioverning [,4w, This Lease will be governed by and uonstrued
accnrding lo the larvs nf the Statr: of lMontana.
14.5 f'rllcreJaigure. If either party is prevented from complying with
any terms nr provisions of this llydropxrrver Site Lease due lo impossibility,
including, but not limited to. riot, war, rebellion, accident, or other causes beyond
the contro,l of such party, then upon wriften notice to the other parfy, the affi:cted
provisions or requirements of this Ilydroperwer Site Leasc shall be suspended
during the period of such disability.
14"6 Notict'. Wlren notice is required undcr any olthe temrs of this
agreemcnt, notice shall he matle to the foll:wing address and cach party will
turther notili the other rvhen there is any changc in the address listed here:
Staff_PR_055 Attachment A
7
Page 7 o'f 12
For the State of lUontana;
Dircrtor, Department of Natural Resources and Consenation
Statc of Montana
1625 Eleventh Avenus
P. O. Box 201601
l'lelena, MI' 59620-l 60t
For Avista Corporation
President, Avista Corpcrration
141 I East Mission Avenue
P.O. Box 3727
Spokane, \\iA 99202-37?7
Additional copy to:
Registered Agent, State of N{ontana, for Avista Corporation.
I
Staff_PR_Oss Attachment A Page B of 12
LESSOR
STATE OF:IIONTANA:
D,vrrW
Byr
It.s:
s$.
)
)
-fhis instrument was acknowledged beiorr: me on k * n' ftl , 20CI8 by Mary
Sexton. Director of the lv{ontana Department of Natrifal Itesofirces and Conservation, for
&e State Board of Land Commissioners, on behalf of whom instrument was exeiruted.
S1"A1'l: OF fuION1"ANA
c<runry ar L{t&la+ "(tMel1-
(sEAi.i
Notary Putrlic lor the State of Montana
ResirJing at . fu,at*A-. lllontanaMycommisiiiliiW
IN WITNHSS WHHI{}:OF, I have hereunto $€t my hand and notsry public seal
the duy and year hrst written.
or t1,ped name:Kttt*q4
r)
Staff_PR_055 Attachment A Page 9 of 12
LESSEE
AVISTA CORPORATION:
By:L
St
STATE OF WASHTNGTON )
County ofSpokane )
This instrument was acknowledged before me on 2008 by
fe., lt tft/. nrr't as vista Corporation, on
behalf of whom instrument was
IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal the day
and year first above written.
typed ndme:
Lft //r"
Notary Public for the State of Washington
Residing at a/.t kz a e , Washington
My commissidn expires: 7,,1r lt, to t ?
Its:
(sEAL)
\\OTARYta
1CUPgL
Staff_PR_oss Attachment A
l0
Page 10 of 12
: ss.
tr:xrllslT "A"
NEIiCRIPTION OTT I-EA$ED TRf, i}TI SES
The leased prcmiscs include J,l 58 acres, more or less, which the parries stipulate
represents the area of skeamhed bek:rv thc ruv*l*r of the Clark Fork River and bounded by
the lorv water mark. running betu,een the upstream boundary of the Clark Fork Pnriect to
thc downstream boundary of the Clark Fork Project.'Ihe Clnrk Fork Project is described
by lhe maps, plans, xpeciliciltions, and statem*nts described ernd designotsd as exhibits
that are on file with and approvecl by the Federal Hnergy ltegulatnry C*mmissian as part
of the license fbr the Clark Fork llroject, Project Na, ?058. 'l'he Project lies generally
within the fbllorving Sections:
Toqnship 27 Norlh. Rangt l5 lVgst. MPM
Section: 24
Township 27 North. Range 3"1 Wcst. IvlPlvl
Ssctions: llt, 19, 20, ?1, 25,26, 27,28, 33,14,35" and 3(r
'l ownshio 27 Lleirth. Ranile 33 West. MPM
Sectians: 30,31, and 12
Tqwnship ?6 Nqrth, Ranse J3 lekst'I'ltM
Sections: 3,4, 5, 8,9, 10, 13, 14, 15,23, and 24
Torvnship 36 Noflh. Range 33 West. MPM
Sections: I 8, I 9, 20, 29, 3?, and 3J
Township 25 Nqrth" Range 3? \Vest. MPM
Sections: 3,4, 5, I, 10, I l, 14, I 5,22,23,76,27, and 28
To*"nship ?4 No(h. Ransq 3? Wggt, MPM
$estions: 1,2,3,4, 10" I l. l3
'lilUtnshin 2,1 ltlnrth. Itanee 3 ] West. MIM
Seutions:6,7,8.9, 14, 15, 16, 17, 18,21,22,23,25,26,27,35. and 36
"township 24 Norlh. Range 30 Wel.t MPM
Section: 3l
'l'orvnship 23 }.lorth. Range l0 West. MPM
Secti*ns 5,6. 7,8, 16, 17, 18, ?1, ?6,37, ?8,34, and 15
J"ownship ?2 Nurth. Range 30 West" MPM
Serrtions: 3, 10, I l, lJ, 14, ?3,24,26, J5, and 36
Staff_PR_055 Attachment A
t1
Page 11 of 12
Township 21 North. Rangg 3Q West. S{P!'l
Section: I
Townshin 2l llorth" Range 29 WEsl. MPM
Sections: 6 and 7
Staff_PR_oss Attachment A
12
Page 12 of 12
Avista Contract No. R-36684-2
Avista Corporation
Second Extension & Modification of Site Lease Agreement
Designated Area:
Avista *Master Lease" Contract No:
West Twin Peaks
R-36684
Background: Avista Corporation ('Avista") leases from West Twin, LLC (fka Madlynn Kinzer and
D. W. Brewer) site space for Avista's wireless communications equipment ("Equipmenf) on West Trvin
Peaks in l.atah County, Idaho (the "Site"), which is managed by Steel in the Air, Inc. ("Steel"). In
accordance with Avista's Site lease ("Lease") Avista and Steel negotiated the rental fee applicable under
the l,ease for the first "Renewal Period" September 13, 2010, through September 12,2015 and executed
the first "Extension & Modification of Site Lease Agreement".
Purpose: The purpose of this "Second Extension & Modification of Site Lease Agreement" is to
formalize the rental fee applicable under the Lease for the second Renewal Period, September 13,2015,
through September 12,2020. Therefore, the Parties agree as follows:
l. Rental Fee.
1.1 The Pa(ies agree to a rental fee of OR $9,454 for the first year of the second Renewal Period
(9 I 13 I I 5 through 9 I 12/ 1 6).
1.2 The annual rental fee set forth in Section 1 I above will be subject to an annual escalation factor
of OR 4%o for the subsequent four years of thc Renewal Period resulting in a rental fee of OR
$9,832for the second year of the second Renewal Period (9/13/16 through 9/12/17); OR $10,225
for the third year (9113/17 through 9112/18); OR $10,634 for the fourth year (9/13118 through
9ll2/19); and OR $11,059 for the fifth year (9113/19 through 9ll2/20), payable in accordance
with the Lease.
2. Lessor's mailing address for Notices or Pa;rments is amended as follows:
WestTwin, LLC
c/o Steel In the Air, Inc.
3297 l\au.vest Way
Mariett4 GA 30064436
Attn: Gypsy Mims, Executive Assistant
Except as set forth in this Extension, all other General Provisions of the original kase will remain in full
force and effect.
This Extension has been executed by the Parties' autlorized representatives on the date(s) set forth below.
West Twin LLC Avista Corporation
)
(Printed Name)
(Title
(Date Signed)
Staff_PR_Oss Attachment B
(Date
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-065
DATE PREPARED
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
0711912019
Joseph Miller
Joe Miller
Regulatory Affairs
(s09) 49s-4s46
REQUEST:
Please explain how the Capital Recovery Factor of 12.003% was determined. Provide supporting
documents with the explanation.
RESPONSE:
Rate schedules 42 and 49 (Street and Area Lighting) contain a "Custom Street Light Calculation"
provision which is designed to allow customers who choose to add street and area light fixtures
that are outside of the offering listed within the tariffs to be quoted a fixed monthly rate based on
the prescribed methodology described within the applicable tariff. The Capital Recovery Factor is
derived by adding together the Company's weighted Cost of Capital, grossed up for
revenue-related expenses, and the effective depreciation rate for all Street and Area Lights (FERC
Account 373) from the Company's Cost of Service study. Please refer to the methodology
described within rate schedules 42 and 49 and the workpaper labeled JDM-E-28, or the electronic
version labeled "Capital Recovery Factor Calc" for Company witness Miller for complete detail of
the Capital Recovery Factor calculation.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO
CASE NO: AVU-E-19-04
REQUESTER: IPUCTYPE: Production Request
REQUEST NO.: Staff-069
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
07116/20t9
Scott Kinney
Steve Silkworth
Power Supply
(s0e) 49s-8093
REQUEST:
For the Rattlesnake Flats Wind PPA, please provide all workpapers and spreadsheets (with
calculations and links enabled) used to develop any cost-benefit analysis to Idaho customers, rate
comparison analysis, and all other analyses performed.
RESPONSE:
Please see Avista's response 069C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233,and Section 9-340D, Idaho Code.
See Staff PR_069C Confidential Attachment A.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-070
DATE PREPARED: 0711612019WITNESS: Dennis Vermillion
RESPONDER: Linda Gervais
DEPARTMENT: Regulatory Affairs
TELEPHONE: [phone]
For the Adams Neilson Solar PPA, please provide all workpapers and spreadsheets (with
calculations and links enabled) used to develop any cost-benefit analysis to Idaho customers, rate
comparison analysis, and all analyses used for approval with the Washington Utilities and
Transportation Commission.
RESPONSE:
Please see Avista's response 070C, which contains TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and233,and Section 9-340D, Idaho Code.
The Company did not do a cost-benefit analysis for Idaho customers related to its Solar Select
project as it was a Washington-only project. The Washington State Senate passed Engrossed
Substitute Senate Bill 5939, providing for the continuation of the Washington State renewable
generation incentive program along with the addition of incentives for shared commercial solar
projects, which made this project cost-effective for Washington Customers. Please see
Staff PR_070C Confidential Attachment A, analyses used for approval with the WUTC.
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-071
DATE PREPARED: 07 11612019WITNESS: Dennis Vermillion
RESPONDER: Linda Gervais
DEPARTMENT: Regulatory Affairs
TELEPHONE: (509) 49s-4975
REQUEST:
For the Adams Neilson Solar PPA, are Idaho customers allowed to participate? If so, please
provide how many are participating.
RESPONSE:
Please see the Company's response to StaflPR_070.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-83
DATE PREPARED: 0712212019WITNESS: Elizabeth Andrews
RESPONDER: Darrell Soyars
DEPARTMENT: Environmental
TELEPHONE: [phone]
REQUEST:
In response to Production Request No. 6, the Company lists total (2017 & 2018) costs of
$413,654.07 for Project Number 77705250, Project Description KFGS Diesel Fuel Spill (O&M).
Please describe in detail the cause, location, and remediation of the fuel spill.
RESPONSE:
Kettle Falls Generation Station - Diesel Spill Investigation and Remediation
In December 2013, the Company's operations staff at the Kettle Falls Generation Station
discovered that approximately 10,000 gallons of diesel fuel had leaked underground from the
piping system used to fuel heavy equipment. Avista Corp. made all appropriate agency
notifications and worked closely with The Washington State Department of Ecology during the
spill response and investigation phase. The Company installed ground water monitoring wells and
there is no indication that ground or surface water is threatened by the spill.
Ecology did not initiate an enforcement action; however the Company initiated a voluntary
cleanup action with the installation of a recovery system, which has been in operation and is
successfully remediating the site. The Company has recorded an estimated remediation liability
and the Company will continue to monitor the remediation activities and adjust any estimated
remediation liability if necessary as new information is obtained.
AVISTA CORPORATION
RESPONSE TO RE,QUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-19-04
IPUC
Production Request
Staff-084
DATE PREPARED: 07/1612019WITNESS: James Kensok
RESPONDER: Linda Gervais
DEPARTMENT: Regulatory Affairs
TELEPHONE: (509) 49s-497s
REQUEST:
Please describe how the Company uses the FEMA ICS system referenced in Kensok's testimony.
Kensok Direct at 4, lines 1-5.
RESPONSE:
Avista has formally adopted and implemented the Incident Command System (ICS) as the means
by which all emergencies are managed. Use of this standardized incident management process
ensures Avista is better prepared for and better positioned for rapid response, restoration and
recovery during an interruption, whether a service outage or a disruption to business. Avista is
also able to integrate with local emergency responders as well as partner utilities under the ICS
framework.
Avista has developed Emergency Operating Plans (EOP) to respond to varying types of incidents
from utility outages, cyber security breaches and internal incidents such as fires, or other
unplanned emergencies. Each EOP aligns with the use of ICS. These plans are designed to enable
Avista to successfully respond to an emergency or business disruption, resuming operations in a
timely and orderly fashion. Emergency response activities are focused on responding to the initial
event and subsequent impacts in an effort to prevent further damage to life, property, and the
environment, and to stabilize the situation by activating recovery and back-up processes and
procedures.