20230831AVU to Staff 1-7.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/31/2023 CASE NO: AVU-E-23-08 WITNESS: Kevin Holland REQUESTER: IPUC RESPONDER: Cheryl Kettner TYPE: Production Request DEPARTMENT: Resource Accounting
REQUEST NO.: Staff – 001 TELEPHONE: [phone] REQUEST:
Regarding the Company's confidential response to Audit Request No. 3, please provide invoices, journal transaction, or supporting documentation for each sample selected in the confidential spreadsheet attached to these discovery requests.
RESPONSE:
Please see Avista’s response Staff_PR_001C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code.

Please refer to the following confidential attachments for the requested information by account number:
• Staff_PR_001C Confidential Attachment A – 447 Sales for Resale
• Staff_PR_001C Confidential Attachment B – 501 or 547 Fuel Sales
• Staff_PR_001C Confidential Attachment C – 456 Transmission Revenues of Others
• Staff_PR_001C Confidential Attachment D – 555 Purchased Power
• Staff_PR_001C Confidential Attachment E – 557 Expense Broker Fees and Resource Optimization
RECEIVED
2023 AUGUST 31, 2023 4:12PM
IDAHO PUBLIC
UTILITIES COMMISSION
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/31/2023 CASE NO: AVU-E-23-08 WITNESS: Kevin Holland REQUESTER: IPUC RESPONDER: C. Kettner/K. Schultz TYPE: Production Request DEPARTMENT: Resource Accounting
REQUEST NO.: Staff – 002 TELEPHONE: [phone] REQUEST:
Please provide the following in Excel format with all formulas intact: a. Actual monthly mega-watt hours ("MWhs") and costs for Avista's generation resources and purchases from July 1, 2022, through June 30, 2023; b. Authorized monthly MWhs and costs for Avista's generation resources and purchases
from July 1, 2022, through June 30, 2023;
c. Actual monthly MWhs and revenues for Avista's sale transactions from July 1, 2022, through June 30, 2023; and d. Authorized monthly MWhs and revenues for Avista's sale transactions from July 1, 2022, through June 30, 2023.
RESPONSE: Please see Avista’s response Staff_PR_002C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is
separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. a. See Staff_PR_002 Attachment A – Dec2022Gen&Purch – Snapshot, which contains actual monthly megawatt hours (MWhs) and costs for the Company’s generation resources and
purchases for the period of January 2022 through December 2022 and Staff_PR_002 Attachment
B – June 2023Gen&Purch – Snapshot, which contains actual monthly megawatt hours (MWhs) and costs for the Company’s generation resources and purchases for the period of January 2023 through June 2023.
b. & d. Staff_PR_002C Confidential Attachment A is the Company’s dispatch model results per
AVU-E-21-01, with tab Schedule 5 revised for the inadvertent error identified by the Company in its September 2021 monthly report, that provides monthly MWhs and dollars for Avista’s generation resources, market purchases and market sales. In the monthly September 2021 report filed on October 15, 2021, the Company notified the Commission that while the total Authorized
Power Supply Base is correct for the year, the monthly values were off one month. This model was
effective for September 1, 2021 through August 31, 2023, which includes the PCA review period. c. See Staff_PR_002 Attachment C – SALES 2022 – Snapshot, which contains actual monthly MWhs and revenues for Avista’s third party sale transactions for the period of January 2022
through December 2022 and Staff_PR_002 Attachment D – June SALES 2023 – Snapshot, which
contains actual monthly MWhs and revenues for Avista’s third party sale transactions for the period of January 2023 through June 2023.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/25/2023 CASE NO: AVU-E-23-08 WITNESS: Kevin Holland REQUESTER: IPUC RESPONDER: Ryan Finesilver TYPE: Production Request DEPARTMENT: Energy Supply
REQUEST NO.: Staff - 003 TELEPHONE: [phone] REQUEST:
Does the Company include kilowatt-hours (“kWh”) generated and consumed for all on-site customer-generators in the PCA? If so, please provide the impact to the 2022-2023 PCA, if removed.
RESPONSE:
The PCA load is based on metered retail customer load. On-site customer generators are netted against total load. While there may be a slight amount of on-site customer-generators which impacted the total load, the amount is immaterial.

The authorized PCA base is based on historical load. As such, any impact (although not material) would be included in this base, effectively resulting in no variance, or a very immaterial amount, as compared to the actuals.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/24/2023 CASE NO: AVU-E-23-08 WITNESS: Kaylene Schultz REQUESTER: IPUC RESPONDER: Kaylene Schultz TYPE: Production Request DEPARTMENT: Regulatory Affairs
REQUEST NO.: Staff – 004 TELEPHONE: [phone] REQUEST:
Please quantify the monthly sales and purchases between the Company and Clearwater Paper Corporation in dollars and MWhs from July 1, 2022, through June 30, 2023. RESPONSE:

Please see Avista’s response Staff_PR_004C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/30/2023 CASE NO: AVU-E-23-08 WITNESS: Kevin Holland REQUESTER: IPUC RESPONDER: Annette Brandon TYPE: Production Request DEPARTMENT: Energy Resource
REQUEST NO.: Staff - 005 TELEPHONE: [phone] REQUEST:
Please explain the Company's acceleration toward dispatching natural gas fueled generation in late 2022 (i.e., Sept., Oct., Nov., and Dec.) compared to the amount of coal-fired generation considering the higher dispatch cost of natural gas generation relative to coal generation during this period
RESPONSE: Regarding total expense, a comparison between resource types is not a relevant comparison as total capacity for Colstrip is approximately 220 MW, whereas Coyote Springs and Lancaster
(natural gas-fired generation) is approximately 597 MW. As such, volume is by far the primary
contributor to any variance between resource types. The dispatch of resources is a decision that is made on a forward, daily, hourly, even 5-minute increment. The Company utilizes a variety of resources when making these decisions. As such, it
is not appropriate to compare the dispatch of two resources based on fuel cost alone. The Company has scheduled an overview of Electric operations and trading on September 7, 2023 to review factors taken into account in order to provide additional insight into this comparison. Operationally, the Company dispatches to the most economical resource absent any other factor
such as maintenance, outages, weather, or other resource availability.
In comparison to authorized, natural gas-fired generation was approximately 20 aMW less than authorized, whereas coal-fired generation was approximately 7 aMW higher than authorized. All else held equal, this would indicate coal was dispatched more than natural gas during the last six
months of 2022. In conversations with Staff, the Company understands there may be some questions regarding coal quality during 2022. There were no issues with coal during 2022 (or at any other time) which would have resulted in any deviations in price from the contract, impacting dispatch decisions.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/24/2023 CASE NO: AVU-E-23-08 WITNESS: Kevin Holland REQUESTER: IPUC RESPONDER: R. Finesilver/I. McLelland TYPE: Production Request DEPARTMENT: Energy Supply/Resource
Accounting REQUEST NO.: Staff - 006 TELEPHONE: [phone] REQUEST:
Please explain why the Company had a ($5,464,169) expense for “CT Fuel” in January 2023. Schultz Workpapers_2, tab “Act-Auth- Proposed”. Please provide a detailed description of the circumstances that led to the expense.
RESPONSE: Avista’s response is intended to provide an initial, high-level explanation of how activity is recorded within the “CT Fuel” account when accounting for fuel and fuel related expenses. Avista
provided further information, as needed, on this request while Staff was on-site August 28, 2023 –
August 29, 2023 for an audit of the PCA. The monthly activity in account 547 “CT Fuel” contains resource expense for fuel used at CT plants. The expense in this account includes both the purchase of physical gas, as well as financial
deals that “lock in” the natural gas price for fuel used in generation. These financial transactions are typically entered into on a forward basis and not all gas purchased has a financial hedge associated with it. On the month that the fuel is delivered or “flowed”, the actual price is known and the financial deals settle, which can result in an increase or decrease to fuel expense depending
on what the market price of gas is during that flow period.
In January 2023, the settled activity resulted in a decrease to expense, which is entered in account 547 as a negative value. This decrease was large enough that it exceeded the overall actual physical purchases, which led to the negative value for the month.
Focusing on 547 “CT Fuel” alone does not fully capture the impact because also during this month Avista incurred a net out-of-the-money position which was reflected in account 447 “Sales for Resale” that was greater than the in-the-money position on the purchase side. As such, those costs should also be considered when looking at the total net cost of fuel for the month of January 2023.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/24/2023 CASE NO: AVU-E-23-08 WITNESS: Kaylene Schultz REQUESTER: IPUC RESPONDER: Tiffany Adams TYPE: Production Request DEPARTMENT: PFA Accounting
REQUEST NO.: Staff – 007 TELEPHONE: [phone]
REQUEST:
Please explain the $120,073 expense for the EIM in March 2023. Schultz Workpapers_2, tab “Act-
Auth- Proposed”. Please provide a detailed description of the circumstances that led to the expense. Please provide supporting documentation.
RESPONSE:
Please see Avista’s response Staff_PR_007C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code.

Please see Staff_PR_007C Confidential Attachment A, tab Expend Cognos Report 03'23, for the detail supporting the $120,073 March 2023 expense. Supporting invoices are contained in Staff_PR_007C Confidential Attachment B.
The March 2023 expenses include incremental labor by Avista staff who perform work under the
Energy Imbalance Market (EIM). In March 2023, ten employees charged time to the EIM project in support of the EIM program including the Manager, IT Operations, System Operations at the EIM desks, and analysts.
Additional charges include fees for software, software as a service (SAAS), and work time by a
contracted software development engineer. The software is utilized by the EIM system, which incurs a monthly expense for the software, hosting fee, support and maintenance. Labor charges = $120,188.48
Overhead Labor Burdens = $85,261.71
Vendor charges = $52,514.49 Total = $257,964.68 P/T Ratio @ 35.60% of Total = $91,835.43
Total EIM incremental costs @ 35.60% P/T Ratio since March 2022 (post go live) = $990,356.00
90% costs deferred through ID PCA since EIM go-live = $891,320.40 ($990,356.00 x 90%) Total Deferred Costs to ID PCA since EIM go-live, March 2022 = ($783,254.70) March 2023 deferred Costs………………………………………… $108,065.70 March 2023 EIM deferred costs reported @ 100%........................ $120,073.00 ($108,065.70/90%)