200406291st Request of Potlatch to Staff.pdf

Conley E. Ward (ISB No. 1683)
GIVENS PURSLEY LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
Telephone No. [phone]
Fax No. [phone]
cew~gi venspursley .com
RECEIVED
. ~_. . .
2f1Uq JUN 28 Pl1 l.,: 55
I U liD f) LIBL
UTiLITiES COMr1lSSl0N
Attorneys for Potlatch Corporation
S:\CLIENTS\54\Potlatch 1st Data Req to Staff.DOC
BEFO RE THE ID AH 0 PUBLIC UTILITIES CO MMISSI ON
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN THE
STATE OF IDAHO.
Case Nos. A VU-04-
A VU-04-
POTLATCH CORPORATION'
FIRST SET OF DATA
REQUESTS TO THE
COMMISSION STAFF
COMES NOW Potlatch Corporation ("Potlatch"), by and through its attorneys of record
Givens Pursley LLP, and hereby requests the Commission Staff ("Staff') answer the following
data requests in accordance with the Idaho Public Utilities Commission s Rules of Procedure.
Definitions and Instructions
The interrogatories and document requests are governed by the following definitions and
instructions:
DEFINITIONS
You" or "your" means the Commission Staff.
Persons" means any and all natural persons, corporations, businesses, firms
companies, partnerships, unincorporated associations, governmental or public agencies, joint
POTLATCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -PageloflO
0 R 181 NAL
ventures and all other entities, including, without limitation, all employees, representatives
consultants and agents of any of the foregoing.
Documents" means any and all written, electronic or graphic matter, of any kind
or description, however created, produced, reproduced or stored, whether sent or received, or
whether originals, copies or drafts, including, but not limited to, every side of every page of all
letters, papers, books, correspondence, bulletins, circulars, instructions, telegrams, cables, telex
messages, facsimiles, memoranda, notes, notations, work papers, transcripts, minutes, reports
recordings of notes or meetings, conferences, interviews or telephone or other conversations
affidavits, statements, summaries, opinions, studies, analyses, evaluations, work sheets
contracts, agreements, journals, statistical records, desk or pocket calendars, appointment books
diaries, lists, tabulations, advertisements, sketches, drawings, blue prints, catalogs, audio or
video records, photographs, computer printouts, e-mail transmissions, data processing input and
output, deeds, microfilm, all other records kept by electronic, photographic or electrical means
and things similar to any of the foregoing however denominated.
Relating to" or "Relate(s) to" means directly or indirectly mentioning, consisting
, evidencing, describing, referring to, pertaining to, being connected with, or reflecting upon
the stated subj ect matter.
The words "any" and "all" shall be considered to include each and every.
The singular of any word shall include the plural and the plural of any word shall
include the singular.
The word "expert" as used herein includes any person who will be offering expert
testimony on behalf of the Commission Staff or who has been consulted or relied upon by any
POTLA TCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 2 of 10
person who assisted in the preparation of the responses to these interrogatories and document
production requests or who will be offering testimony on behalf of the Staff in this matter.
Insfl1lctioDs
In answering these interrogatories and document requests, you are required to furnish all
information that is available to you, or subject to your reasonable inquiry, including the
information in the possession of you, your attorneys or other persons directly, or indirectly
employed by, or connected with, you or your attorneys, and anyone else other wise subject to
your control. In answering each interrogatory and document request:
Identify by title, heading or caption, date, sender, recipient, location and
custodian, each document relied upon, reviewed or which forms a basis for the response given or
which corroborates or relates to the response given or the subject of what is given in response to
these discovery requests;
State whether the information furnished is within the personal knowledge of the
person responding and, if not, the name, if known, of each person to whom the information is a
matter of personal knowledge;
Identify each person who assisted or participated in preparing and/or supplying
any of the information given in response to or relied upon in preparing responses to these
discovery requests;
Where a discovery request calls for a response in multiple parts, each part should
be separated in the response so that the response is clearly understandable and complete;
Where the name or identity of a person is requested, state the full name, business
address, and any telephone numbers of each person;
POTLA TCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 3 of 10
If any of your responses require the production of documents, label the documents
to indicate the discovery request to which you are responding.
K )'vu v bjv\.It tv the-pmda\.lt~ou of ~1l' doGmnGnt caHed-foI ill these d6etln1eM
requests, for each such document state the following: (1) the reasons for the objection and any
facts supporting the objection; (2) give a description of each document including, without
limitation, the date, sender, recipient(s), persons to whom copies have been furnished, job titles
of each of the persons, subject matter of the document, number of pages of the document, the
number(s) of the request to which such document is responsive and the identity of the person in
whose custody the document is presently located.
If any document is withheld under claim of privilege or work product, furnish a
list identifying each document for which the privilege or work product is claimed, together with
the following information for each such document: date, sender, recipient(s), persons to whom
copies were furnished, job titles of each of those persons, subject matter of the document
number of pages of the document, the bases on which the privileges or work product is claimed
the paragraph(s) of these requests to which the document responds, the person in whose custody
the document is presently located, and whether any matter that is not privileged or is not work
product is discussed or mentioned in each document.
If any document requested was, but is no longer in the possession or subject to the
control of the Staff, or is no longer in existence, state whether it: (1) is missing or lost; (2) has
been destroyed; (3) has been transferred voluntarily or involuntarily to others and state the
identity of the persons to whom it has been transferred; (4) has otherwise been disposed of, or in
each instance explain the circumstances surrounding such disposition, state the date or
approximate date thereof and the identity of the persons with knowledge of such circumstances;
POTLATCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 4 of 10
(5) identify the documents that are missing, lost, destroyed, transferred or otherwise disposed of
by author, date, subject matter, addressee(s), and the number of pages.
ff yuu du llUt \.Irem.y WIJt;l;:)tallJ;-or'ilavv all)' 4Ut;;:)t~Ull;:) al.,vut, tlIC,sC, definitions
instructions interrogatories or requests, contact counsel for Potlatch promptly for clarification.
These discovery requests are continuing in nature and require supplemental
responses upon the discovery or receipt of new or additional information.
The following data requests refer to the Direct Testimony of Terri Carlock.
order to enable Potlatch to prepare for the hearings in this case, Potlatch requests a
response by July 14 2004.
REQUEST NO.Please provide all testimony, exhibits and working papers in their
original computer formats on CD-ROM.
REQUEST NO.Page 5 at 1 to 3: Please describe Ms. Carlock's understanding of
the three standards.
REQUEST NO.Page 5 at 8 to 12: Please explain how Ms. Carlock considered the
standards in her analysis.
REQUEST NO.Page 6 at 8 through page 10 at 6:
(a)Please exactly describe the Comparable Earnings Method and how Ms. Carlock
applied it.
(b)Please describe exactly how Ms. Carlock calculated her 10% to 11 % cost of
equity range using the Comparable Earnings Method.
(c)Please describe exactly how Ms. Carlock used the consumer price index, the
prime interest rate, the Dow Jones Utility Average, and the Dow Jones Industrial
Average to arrive at the 10% to 11 % cost of equity range.
POTLA TCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 5 of 10
(d)Please provide evidence that "The lower risk level associated with utilities is
attributable to many factors even though the difference is not as great as it used to
(see page g at 7 to 9). Does Ms. CM~ieT e that utility ris~eefl
increasing and over what time period does she believe any such increase has
occurred?
(e)Please describe the measure of risk Ms. Carlock used in her Comparable Earnings
method and how she used it (see page 8 at 23 through page 9 at 1).
(f)Ms. Carlock indicates that many of the risks experienced by Avista (Corp.) have
been and continue to be primarily due to non-regulated operations and decisions
that were made to expand those affiliate activities (see page 8 at 21 to 24). She
also indicates that due to various risk components, A vista Utilities continues to
experience a high cost of debt. To what extent did Ms. Carlock account for
Avista Utilities' additional risk due to the risks caused by Avista Corporation
non regulated operations?
REQUEST NO.Page 11 at 17 to 19: Please provide the evidence on which Ms.
Carlock relied to calculate the 4% figure for A vista Corporation and explain how she derived a
2% figure for the utility operations.
REQUEST NO.Page 11 at 17 to 19: Please indicate whether Ms. Carlock
considered flotation costs incurred under any Employee Stock Ownership Plan or Dividend
Reinvestment Plan issuances.
REQUEST NO.Page 12 at 1 to 2: Please provide the theoretical derivation and
support for treating the flotation costs in the manner employed by Ms. Carlock. Please provide
any journal articles or texts supporting any derivation.
POTLATCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 6 of 10
REQUEST NO.Page 12 at 6 to 8: Please explain how Ms. Carlock calculated the
8% to 11.3% range. Please explain what Ms. Carlock means by "during various time
il1ter;ab" Mld-tfttiieate .~O~t intervah .vere. Plea~t demonstrate exaet~s. Cadeek
calculated the dividend yield.
REQUEST NO.Page 12 at 8 to 11: Please describe how the need for ongoing
capital requirements including refinancing maturities affected Ms. Carlock's belief that the
projected dividend yield is 3.5% to 3.7% and the growth rate is 6%.
REQUEST NO. 10: Page 12 at 13 to 19: Please describe how Ms. Carlock calculated
the 5% expected growth rate for the DJUA and indicate by reference to the working papers how
the Value Line West and DJUA expected dividend yields were calculated.
REQUEST NO. 11: Page 13 at 3 to 9: Please describe exactly what historical and
projected growth indicators were used, what their figures were, and how the 6% to 6.
expected growth rate range was calculated from them.
REQUEST NO. 12: Page 14 at 11 to 13: Please explain how the 9.5% to 10.9% range
was derived from the results of Ms. Carlock's Comparable Earnings Method and DCF method
results.
REQUEST NO. 13: Page 14 at 16 to 25: Please explain how the 10.4% point estimate
was chosen based on the 9.5% to 10.9% range and exactly how Ms. Carlock based it on a review
of the market data and comparables, including the past and current impact from non-regulated
operations and the capital structure to select her 10.4% point estimate.
REQUEST NO. 14: Please provide all rate of return testimony filed by Ms. Carlock
within the last five years.
POTLATCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF-
Page 7 of 10
DATED this 28th day of June 2004.
GIVENS PURSLEY LLP
POTLA TCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION STAFF -
Page 8 of 10
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 28th day of June 2004, I caused to be served a
tftlt and t6ITCCt C6~ICg6il1g dOCtt111Gnt by-thc nlGthod-indicatcd-bdovv , at'ld
addressed to the following:
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
) U.S. Mail
( fI Hand Delivered
) Overnight Mail
) Facsimile
Scott Woodbury
John Hammond
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720-0074
swoodbu~puc. state. id. us
jhammon~puc.state.id.
) U.S. Mail
(v') Hand Delivered
) Overnight Mail
) Facsimile
) E-Mail
David J. Meyer
Senior Vice President and General Counsel
A vista Corporation
O. Box 3727
1411 E. Mission Ave., MSC-
Spokane, WA 99220-3727
david.meyer~avistacorp. com
(JJ U.S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
) E-Mail
Kelly Norwood
Vice President, State and Federal Regulation
Avista Utilities
O. Box 3727
1411 E. Mission Ave., MSC- 7
Spokane, W A 99220-3727
kelly .norwood~avistacorp.com
(j)
S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
) E-Mail
Dennis E. Peseau, Ph.
Utility Resources, Inc.
1500 Liberty Street SE, Ste. 250
Salem, OR 97302
dpeseau~exci te. com
(j)
S. Mail
) Hand Delivered
) Overnight Mail
) Facsimile
) E-Mail
POTLA TCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION
STAFF - Page 9 of 10
Charles L.A. Cox
EV ANS, KEANE
111 Main Street
O. Box 659
~o~~, 1B-83 837
ccox~usamedia. tv
(/J U.S. Mail
J Hand Delivered
J Overnight Mail
J Facsimile
E--+E-MMI
Michael Karp
147 Appaloosa Lane
Bellingham, W A 98229
michael~awish.net
(/J U.S. Mail
J Hand Delivered
J Overnight Mail
J Facsimile
J E-Mail
( .I) U.S. Mail
J Hand Delivered
J Overnight Mail
J Facsimile
J E-Mail
Brad M. Purdy
Attorney at Law
2019 N. 17th Street
Boise, ID 83702
bmpurdy~hotmail.com
Anthony J. Yankel
29814 Lake Road
Bay Village, OH 44140
( .;J U.S. Mail
J Hand Delivered
J Overnight Mail
J Facsimile
J E-Mail
POTLATCH CORPORATION'S FIRST SET OF DATA REQUESTS TO THE COMMISSION
STAFF - Page 10 of