20190924Avista to Staff Attach Rpt 10.pdf

Main Office:
24919 Canston Court
Spring, Texas 77389
Tel: [phone]
Fax: [phone]
McLain Crow & Associates,LLC
www.mclaincrow.com
Insurance Loss, Management & Consulting Services Branch Office:
26423 Hidden Timber Ln.
Katy, Texas 77494
Tel: [phone]
Fax: [phone]
9 September 2008
Underwriters and Insurers at Interest
REPORT NO.10
INTERIM
INSURED :Avista Corporation
1411 East Mission Avenue
Spokane, WA 99220
INSURERS/POLICY NOS.:AIG –2611149 –40%
Lloyds c/o R.K. Harrison –NRS10610147 –25%
AEGIS –L0149A1A06 –20 %
Starr Tech –EUTN01938630 -11%
Energy Insurance Mutual –310218-06GP–4%
POLICY TERM :November 25, 2006 to November 25,2007
LOCATION OF LOSS :Coyote Springs Substation
Near Boardman, OR
DATE OF LOSS :March 23, 2007
TYPE OF OCCURRENCE :Electrical Arcing of Transformer
CLAIM OR REF.NUMBER :AIG –229-006448
Lloyds c/o R.K. Harrison –150174(3220)
AEGIS –38920
Starr Tech -253
Energy Insurance Mutual –903921-06GP
MCA FILE NO.:07MCA01 87RC
Ladies &Gentlemen:
We respectfully submit our interim report in connection with the above referenced matter.
AVISTA Corporation 9 September 2008
MCA File # 07MCA0187RC Page No.2
ENCLOSURES
1.None at this time.
REQUESTED INFORMATION:
1.Final costs and supporting documentation.
DEVELOPMENTS:
It was reported that on March 23, 2007 at 7:05 AM the Coyote Springs transformer was taken off line due to
alarms that indicated the presence and then rapid increase of Acetylene in the oils.This increase in the gas was
noted on the Serveron Unit, the Buchholz relay and the Hydran Gas indicator. Oil samples were also taken and a
Dissolved Gas Analysis was performed. This analysis confirmed the increase gas in the oil.Following initial
inspection to locate the source and extent of problem that caused elevated gassing, it was apparent that
investigation of the transformer problems to affect potential repair could only be conducted only in a controlled
factory environment.Based on the forensic examination,complete rebuild of the transformer would be
necessary to restore it to serviceability.
As of this date the insured has incurred the following costs.
In-house costs $ 506,470.05
Siemens Down Payment $ 420,000.00
Transformer Salvage (277,918.00)
Oil Salvage (8,690.40)
Deductible.$(443,750.00)
Total Net of Deductible $ 196,111.65
As previously reported with insurer’s authorization we proceeded to take a partial proof of loss for the partial
payment of $196,111.65 as outlined above.A copy of the fully executed partial proof of loss was attached to our
last report.
Avista has entered into an agreement with Siemens to provide another unit that they intend to use as a spare now
that the original spare is in service.The anticipated delivery of this transformer is mid-2009.
EXPERTS:
With insurers authorization we retained the services of Mr.Ed Feloni to assist us in this matter.
SUBROGATION AND SALVAGE:
With your authorization we retained the services of Robins, Kaplan, Miller & Ciresi to look in to possible
subrogation.
OTHER INSURANCE:
We are not aware of any other insurance that would apply to this occurrence.
AVISTA Corporation 9 September 2008
MCA File # 07MCA0187RC Page No.3
RESERVE:
Based on the insured’s calculation and the comments from Mr. Ed Feloni we recommend the current net reserve
of $4,044,111.65 be maintained on the file pending developments.
As additional information is developed, we will contact you concerning recommendations of any adjustment of
these reserves.
REMARKS:
We will continue to give this matter our closest attention and will inform you of future developments.
Should you have any questions or comments, or wish to discuss any of the above items, please feel free to
contact me.
Please diary your file 45 days pending further activity.
Very truly yours,
McLain Crow & Associates, LLC
Ronald R. Crow, CPCU, ARM, AIC
Executive General Adjuster
Distribution:VIA E-mail
Mr. Patrick Jeremy –AIG
Mr. Simon Dawes RK Harrison on behalf of Lloyds Underwriters
Mr. Paul Carnovale –AEGIS
Mr. Rabindranath Rajkumar –Starr Tech
Ms. Ann Joslin -Energy Insurance Mutual
Mr. David Bocan –RKMC
Mr. William Webster -RKMC