20120727Avista to Clearwater 17-23.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
July 26, 2012
RECEIVE
7012JUL27 At1O:2I
TI iT
L) I ILl
AVISTK
Corp.
Richardson & O'Leary, PLLC
Mr. Peter Richardson
515 N. 27' Street
Boise, ID 83702
Re: Production Request of Clearwater Paper Corporation in Case Nos. GNR-E-1I-03
Dear Mr. Richardson,
Enclosed are an original of Avista's responses to Clearwater Paper Corporation's production
requests in the above referenced docket. Included in this mailing are Avista' s responses to
production requests 17 - 23. The electronic versions of the responses were emailed on 7/27/12.
If there are any questions regarding the enclosed information, please contact me at (509) 495-
4584 or via e-mail at pau1.kimbal1avistacorp.com
Sincerely,
Paul Kimball
Regulatory Analyst
Enclosures
CC Dr. Reading, IPUC
CC (Email): All parties electronic
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO DATE PREPARED: 7/9/2012
GNR-E-1 1-03 WITNESS: Clint Kalich
Clearwater RESPONDER: Clint Kalich
Production Request DEPARTMENT: Energy Resources
CW-17 TELEPHONE: [phone]
REQUEST:
REQUEST FOR PRODUCTION NO. 17:
Reference Rebuttal Testimony of Mr. Kalich at pages 17-18, purporting to respond to a portion
of Dr. Reading's Direct Testimony on page 65, beginning at line 10, by stating that "Avista's
Schedule 62 contains a standard offer for non-firm QF power."
(a)Please provide a copy of the referenced "standard offer."
(b)Please reference page 65 of Dr. Reading's Direct Testimony, stating "I recommend that
Avista and Rocky Mountain Power also file a nonfirm standard contract similar to Idaho Power's
Schedule 86." Please admit or deny that Avista's Schedule 62 does not contain a standard contract
for non-firm energy sales.
(c)Please explain why Avista' s tariff does not contain a standard contract, and whether
Avista would be willing to provide a standard tariff contract for nonfirm or "as available"
deliveries. If not, please explain why.
RESPONSE:
a)Avista has a standard non-firm rate published in its "Schedule 62." Schedule 62 may be
found on the IPUC website, beginning at page 52, at the following URL:
http://www.nuc.state.id.us/tariff/approvedlElectric/AvistaElectric.pdf . Specifically,
Schedule 62 states, in relevant part:
Short-Term Rate - The Short-Term Rate shall be applicable when the Customer
chooses to supply output including energy and capacity at market-based rates under
contract. The Short-Term Rate shall be the lower of the applicable Non-Levelized
Non-Fueled Rate or the Market Rate. The rate is subject to a Seasonal Factor, a
Daily Shape Adjustment, and Integration Charges. The resultant rate shall be
applied to the Facility output for all kilowatt-hours up to the Eligibility Cap in any
given month.
b)As stated in Mr. Kalich's rebuttal testimony submitted in this proceeding, Avista's
Schedule 62 contains a standard offer for non-firm QF power. Avista's Schedule 62 does
not contain a standard contract for non-firm energy sales.
c)While Avista does provide a standard offering for non-firm energy in its Schedule 62, the
unique nature of each QF project requires a contract customized to fit its requirements. As
noted in Mr. Kalich's rebuttal testimony submitted in this proceeding, Avista does support
the adoption of a tariff similar to PacifiCorp's Schedule 38 to specify contracting
Response to Staff Request No. 349
Page 2
procedures and rules for QF contracts. Because such tariff would need to address issues
specific to each utility, Avista also support's Staff's recommendation that a separate docket
be opened in which each utility submits a proposed tariff for review and comment. See
Rebuttal Testimony of Clint Kalich at 8:18-9:8.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
GNR-E-1 1-03
Clearwater
Production Request
CW-18
DATE PREPARED
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
7/9/2012
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Please provide copies of all Schedule 62 standard offer contracts Avista has entered into.
RESPONSE:
Although Avista's Schedule 62 provides standard rates and identifies many of the terms for a
published firm and non-firm QF contract rates, Avista does not offer a standard offer contract.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 7/9/2012
CASE NO: GNR-E-1 1-03 WITNESS: Clint Kalich
REQUESTER: Clearwater RESPONDER: Clint Kalich
TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: CW-19 TELEPHONE: [phone]
REQUEST:
At page 4 of his rebuttal testimony, Mr. Kalich states, "Although it might be difficult to
disaggregate other types of projects, it is possible that developers will find similar ways to
arbitrage published rates to their favor at the expense of utility customers." Please define and
explain what Mr. Kalich is referring to by the word "arbitrage."
RESPONSE:
As recent experience indicates, when the published avoided cost rates exceed the utilities actual
avoided costs QF developers are incented to take creative steps to take advantage of the higher
rates (see generally GNR-E-1 1-01). When QF developers are compensated for QF output at rates
that exceed the utility's actual avoided cost, the utility's customers absorb that expense. Mr.
Kalich was referring to the potential that QF developers will be able to take such creative measures
when published rates are high relative to the cost of their development.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
GNR-E-1 1-03
Clearwater
Production Request
CW-20
DATE PREPARED
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
7/9/2012
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Li1'J afi
To Avista's knowledge, has the Idaho Commission ruled on the concept of "arbitrage" in relation
to developers seeking published avoided cost rates? If so, please provide citations to relevant
rulings.
RESPONSE:
Not specifically. However, in Order No. 32262, the Commission maintained the eligibility cap for
published avoided cost rates for wind and solar QFs at 100 kW to prevent further disaggregation of
large wind and solar QFs. The Commission stated: "it would be erroneous, and illegal pursuant to
PURPA, for this Commission to allow large projects to obtain a rate that is not an accurate
reflection of the utility's avoided cost for the purchase of the QF generation." Order No. 32262 at
8.
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO DATE PREPARED: 7/9/2012
GNR-E-1 1-03 WITNESS: Clint Kalich
Clearwater RESPONDER: Clint Kalich
Production Request DEPARTMENT: Energy Resources
CW-21 TELEPHONE: [phone]
REQUEST:
Please explain how it might be "difficult to disaggregate other types of projects" as referenced in
Mr. Kalich's quoted testimony in No. 19 above. In doing so, please identify the "types of
projects" he is referring to and how developers might "disaggregate" their projects.
RESPONSE:
Mr. Kalich cannot speculate on the means by which QF developers might find creative ways to
take advantage of published avoided cost rates that are high relative to cost. He was only pointing
out in his rebuttal testimony that absent a reduced eligibility cap, the possibility exists for QF
developers to disaggregate their projects to benefit from published rates where IRP-Methodology
rates are lower, and that the incentives to disaggregate are larger to the extent a larger eligibility
cap exists.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO
CASE NO: GNR-E-1 1-03
REQUESTER: Clearwater
TYPE: Production Request
REQUEST NO.: CW-22
DATE PREPARED: 7/9/2012
WITNESS: Clint Kalich
RESPONDER: Clint Kalich
DEPARTMENT: Energy Resources
TELEPHONE: [phone]
REQUEST:
On page 8 of Mr. Kalich's testimony, he states that the Langley Gulch plant "will be completed
in approximately two years." Please provide all documents relied upon by Mr. Kalich supporting
that statement.
RESPONSE:
Mr. Kalich based his statement on a telephone call with Mr. Randy Allphin of Idaho Power. A
project timeline for the Langley Gulch plant showing a roughly two-year schedule from the start of
construction to commercial operation can also be found on Idaho Power's website at:
http://www.idahopower.comlpdfs/AboutUs/PlanningForFuture/ProjectNews/LangleyGulchlLaflg
leyGulch_Timeline_07- 11 .pdf
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 7/9/2012
CASE NO: GNR-E-1 1-03 WITNESS: Clint Kalich
REQUESTER: Clearwater RESPONDER: Clint Kalich
TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: CW-23 TELEPHONE: [phone]
REQUEST:
When did Idaho Power place deposits for construction of the turbines used in Langley Gulch?
RESPONSE:
Mr. Kalich does not have this information. His testimony referred to the time when construction of
Langley Gulch commenced, not when specific components were procured.