20190919ICL 1-9 to Avista.pdf

ldaho Public Utilities Commission
Oflice of the SectetaryRECEIVED
sEP I 9 20t9Benjamin J. Otto (ISB No. 8292)
710 N 6th Street
Boise,ID 83701
Ph: [phone] xl2
Fax: [phone]
botto @idahoconservation. org
Attorney for the Idaho Conservation League
BEFORB THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF AVISTA
CORPORATION FOR THE
AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR
ELECTRIC CUSTOMERS IN THE
STATE OF IDAHO
AVU-E- l9-04
Certificate of Service
Boise, tdaho
CASE NO. AVU.E-19-04
FIRST PRODUCTION REQUEST OF
THE IDAHO CONSERVATION
LEAGUE TO AVISTA
September ll,20l9
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The Idaho Conservation League, by and through its attorney of record, Benjamin J. Otto,
and pursuant to the Rules of Procedure of the Idaho Public Utilities Commission
("Commission"), requests Avista Corporation ("Company") provide the following documents
and information as soon they become available to the Company, or by October 212019.
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. IDAPA 31.01.01.228.
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 provide electronic copies of Company responses to data
requests sent by any party in this proceeding.
REQUEST NO. 2: In his testimony on page 21, lines 2l-22 and page 22,lines l-2,
Company Witness Thackston states: "As the costs and technologt of clean energ/ and energt
storage continue to improve, ond as other markets develop, we antictpate there will be a time
when we no longer need Colstrip, and we continue to work with our five co-owners related to the
future of the plant."
a. Please provide all studies, analysis, communications, memos, or other materials that
4 . support the Company's anticipation of when Colstrip will no longer be needed.
b. When the Company determines it no longer has a need for Colstrip, must the Company
secure approval from the other co-owners of Colstrip Units 3 and 4 to retire and
shutdown Units 3 and 4, or otherwise terminate the Company's ownership stake in Units
3 and 4? In answering this request, please cite to and provide the relevant Colstrip
contract provisions that support the Company's answer.
REQUEST NO. 3: In his testimony on page 21, lines 18-21, Company Witness
Thackston states: "Colstrip has been an important source of generation in the region andfor
Avista's customers for over 30 years. It is available to serve our customers when the wind isn't
blowing, the sun isn't shining, or there isn't enough water flowing down our rivers to generate
enough electricity to meet our customers' energlt needs."
a. Please provide any dates Colstrip Units 3 and 4 were shut down during 2018. For each
instance, please indicate whether the shutdown was planned our unplanned. If unplanned,
please describe the cause and the process by which the unplanned shutdown was
resolved. due to pollution control violations in the summer of 2018, and please provide
the date range between when Units 3 and 4 were shut down due to these violations and
when Units 3 and 4 ultimately resumed providing electricity to Idaho electric customers?
b. Please provide the 1-hour and 18-hour sustained peak energy demands on Avista's
system, in megawatts, for any time periods when Units 3 and 4 were shut down in 2018,
and please provide the percentage of these energy demands that Units 3 and 4 would have
been expected to meet had they not been shut down.
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September ll,20l9
c. Please provide a detailed explanation of how Avista generated and provided sufficient
electricity to meet customer needs during each unplanned outage at Colstrip Units 3 and 4
during 2018.
d. Colstrip shutdown during the summer of 2018 to address pollution controls administered
by the Montana Department of Environmental Quality. Please provide a detailed break-
out by category of the costs associated with the shutdown of Units 3 and 4 in the sulnmer
of 2018, including but not limited to replacement power costs, inspection and testing
costs, repair costs, parts and labor costs, pollution control violation costs, and any and all
similarly related costs and expenses.
e. Please provide the total number and type of pollution control violations Units 3 and 4
violated for the 2018 calendar year. For each violation please indicate any penalty paid,
assessed but outstanding, or potentially assessed but as yet unresolved.
f. What is the maximum penalty amount that could be assessed for the pollution control
limits Colstrip Units 3 and 4 violated in the summer of 2018?
g. Has the Company included the pollution control penalties or any cost associated with the
shutdown in Idaho customer rates? If so, please provide a detailed break-out by category
of these costs. If not, does Avista intend to include in Idaho customer rates the costs
associated with Colstrip Units 3 and 4 pollution control penalties and/or costs associated
with the shutdown in 2018?
REQUEST NO. 4: In his testimony on page 17, lines 16-21, Company Witness
Thackston states: " ...the current coal supply contract for Units 3 and 4 expires at the end of
2019. The Company has been involved in negotiations to extend this contract, but Westmoreland
Coal, the owner and operator of the Rosebud Mine that supplies Colstrip, filedfor Chapter l1
banlcruptcy in October 2018. A group of creditors purchased the Rosebud Mine ossets, and that
group accepted the curuent controct and will honor it for the rest of 2019. Negotiations with the
creditorsfor a new contract are ongoing."
a. Is Avista requesting revenue for coal supply as part of base rates in this docket? If so,
please identi$ the amount and provide documentation justiSing this amount
b. Please explain what a "cost-plus" agreement means, as Avista used this term in reference
to the Coal Supply Agreement that governs the cost of fuel for Colstrip Units 3 and 4 in
AVU-E- l9-04
Certificate of Service
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September ll,2019
Objection by Puget Sound Energy, Inc., Portland General Electric Company, Pacificorp,
and Avista Corporation to Joint Chapter 11 Plan of Westmoreland Coal Company and
Certain of its Debtor Affiliates at 11, In re: Westmoreland Coal Company, et. Al.,
Debtors, (Bankr. S.D. Tex. 20t9) (I.{o. I 8-35672 (D2)) ("In short, the Rejection
Notice's failure to include the Coal Supply Agreement as a contract that will be assigned
to the Purchaser is not credible because there is no justification for rejecting it, and strikes
the Public Utilities as nothing more than a litigation tactic to drive Public Utilities to
accept unreasonable commercial terms on the new contract that is supposed to take effect
in2020. This is ,:specially true given the Coal Supply Agreement is a 'cost-plus'
agreement, and is per se profitable for WECO.").
c. Is Colstrip able to burn coal from a source other than Rosebud mine according to current
air quality permits? Is the Colstrip facility able to receive coal by rail car or truck?
REQUEST NO. 5: In his testimony on page 17, lines 6-8, Company Witness Thackston
states that the recently passed Washington legislation requiring elimination of energy from
Colstrip 3 and 4by 2025 will not impact any of the capital projects in this case.
a. When the Company eliminates energy from Colstrip in 2025, will energy from Colstrip
be eliminated in Idaho?
b. If energy from Colstrip continues to be provided to Idaho electric customers after 2025,
will Idaho electric customers be solely responsible for Avista's portion of costs
associated with Colstrip, such as ongoing capital projects, the coal supply from the
Rosebud Mine and ongoing pollution issues covering both air quality and water quality
regulations?
REQUEST NO. 6: In his testimony on page 14, lines 40-41, Company Witness
Thackston states: "Eachyear Talen, the plant operator, proposes a set ofcapital projectsfor
Units 3 and 4, as well as for the plant-in-common."
a. Please provide the annual business plan and capital budgets for Colstrip Units 3 and 4
for 2018, 2019, and2020.
b. Please provide all individual capital project summaries related to the Colstrip Units 3
and 4 Capital Projects, subject to this proceeding.
AVU-E-19-04
Certificate of Service
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September ll,2019
c. Please provide any documentation of Avista's assessment for each planed capital
project that continued spending on Colstrip is a lower cost option that pursuing a
replacement resource.
REQUEST NO. 7: In his testimony on page 15, lines 1-4, Company Witness Thackston
states: "These projects are reviewed by one or more Avista representatives on an individual
basis and also as an ownership group. Additionally, Avista and other Company representatives
meet with Talen at least every other month to review plant operations including capital
projects. "
a. Please provide all documents, emails, oomrnunications, rnginos, or other intemal
company documents related to Avista's review of the Colstrip 3 and 4 Capital
Projects subject to this proceeding.
REQUEST NO. 8: In his testimony on page 15, lines 8-14, Company Witness Thackston
states: "It should also be remembered that the compensation structure for the plant operator is
cost-based and does not include a rate of return based on the capital spending at the plant...so
there is no financial incentive for them to spend needless capital. " '
a. Does the Company's rate of return on capital investments create a financial incentive
to spend capital?
REQUEST NO. 9: In his testimony on page 19, lines 9-10, Company Witness Thackston
states: "Throughout the years, woter has been lost through seepage from the ponds that has
contaminated the groundwater on the Colstrip site."
a. Please provide the document(s) in which the Company agreed to the construction and
operation of the ponds associated with Colstrip Units 3 and 4.
b. Please provide documents of Avista's ongoing participation or oversight in the
operation of the Colstrip site to ensure compliance with permit requirements.
c. At the time the Company approved construction and operation of the ponds
associated with Colstrip Units 3 and 4, did the Company know any or all of these
ponds would or would likely cause seepage into the groundwater?
AVU-E- 19-04
Certificate of Service
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September 11,2019
d. Were all the ponds, for which the Company is responsible, lined with a material to
prevent seepage at the time of construction or sometime after? If not, how many
ponds, for which the Company is responsible, are unlined and how many are lined?
e. At the time the Company approved construction and operation of the ponds
associated with Colstrip Units 3 and 4, did the Company know whether or not the
bottoms of the ponds would be lined with a material that would prevent seepage?
f. Is it the Company's position that the costs of remediating contaminated groundwater
caused by seepage from ponds associated with Colstrip Units 3 and 4 should be
included in the rates paid by Idaho electric customers?
DATED this 1lth day of September,2019
Respectfully submitted,e 5bs-
Benjamin J. Otto
Idaho Conservation League
AVU-E- 19-04
Certificate of Service
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September ll,20l9
CERTIFICATE OF SERVICE
I hereby certify that on this 1lth day of September,2Olg,I served the foregoing FIRST
PRODUCTION REQUEST OF THE IDAHO CONSERVATION LEAGUE TO AVISTA
CORPORATION, in Case No. AVU-E-19-04 via the method of service noted:
Benjamin J. Otto
Hand delivery:
Commission Secretary (Original and s6acopies proft&ci;
Idaho Public Utilities Commission
427 W. Washington St.
Boise,ID 83702-5983
Electronic Mail onlv:
Idaho PUC Stqff
John Hammond, Jr.
Idaho Public Utilities Commission
427 W. Washington St.
Boise,lD 83102
j ohn.hammond@puc. idaho. gov
Avista Utilities
David J. Meyer, Esq.
Patrick D. Erhbar
Avista Corporation
David.meyer@avistacorp. com
Pat. Ehrbar@avistacorp. com
[e-mail]
Idaho Forest Group. LLC
Ronald L. Williams
Williams Bradbury, P.C.
[e-mail]
Dean J. Miller
j oe@mcdevitt-miller. com
Larry A Crowley
The Energy Strategies Institute, Inc.
[e-mail]
AVU-E- l9-04
Certificate of Service
Clearwater Paper
Peter J. Richardson
Richardson Adams PLLC
p eter @richard so nadam s. c o m
Dr. Don Reading
dr eading@mind sprin g. com
Electronic Only:
carol. haugen@clearwater. com
te rry. borde n@clearw ater. c om
CAPAI
Brad M. Purdy
Attorney at Law
[e-mail]
Walmart
Norman M. Semanko
Parsons Behle & Latimer
nsemanko@parsonsbehle. com
Vicki Baldwin
Parsons Behle & Latimer
[e-mail]
7
September ll,2019