HomeMy WebLinkAbout200407072nd Response of Staff to Avista.pdfSCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-0320
BAR NO. 1895
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
C;~ECE'VED
F:'fLED
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20n~ JUt - 7 Pr; 3: 2'"
i!U 1 U
UT ILITIES COrlHJSSfON
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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-
COMMISSION STAFF
RESPONSE TO THE
SECOND PRODUCTION
REQUEST OF A VISTA
CORPORATION
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record
Scott Woodbury, Deputy Attorney General, hereby responds to Avista Corporation s (Avista;
Company) First Request for Production to the Idaho Public Utilities Commission Staff filed
June 29, 2004.
Request No. 10: At page 7, line 13 of Mr. Hessing s direct testimony he writes
, "
Staff
concluded that appropriate safeguards were not in place or followed to protect customers when the
regulated utility does business with its affiliate ? Please provide copies of the statute, order, rule or
guideline upon which Mr. Hessing was basing his statement regarding "appropriate safeguards.
Response No.1 0: Because A vista Utilities assured Commission Staff that there would be no
regulated electric utility business dealings with affiliates, and because no notice or filing was made
with the Commission proposing such transactions, there are no written statutes, orders, rules or
ST AFF RESPONSE TO THE SECOND
PRODUCTION REQUEST OF A VISTA JULY 7, 2004
guidelines that address this issue. No case was initiated and no Commission direction regarding such
transactions was produced. However, in a similar situation, when A vista Utilities requested that it be
allowed to purchase natural gas for its gas customers from its affiliate A vista Energy, a case was
initiated and rules of conduct were established that allowed the business transactions and protected
customers. Had the Commission been informed that the Company s regulated electric business
intended to do business with an affiliate a similar process would have occurred.
Request No. 11: At page 7, line 15 of Mr. Hessing s direct testimony he writes
, "
Safeguards
could include a proper Code of Conduct or a requirement for lower-of-cost-or market pricing." What
statute, order, rule or guideline was Mr. Hessing relying on that requires Avista Utilities have a Code
of Conduct in place covering natural gas purchases or financial transactions with its affiliate A vista
Energy for fuel supply for electric generation? Please provide a copy of all relevant documents.
Response No. 11: Again, there are no written statutes, orders, rules or guidelines for this
specific situation for the reasons stated in response No.1 O. Because of self-dealing questions , the
prudence of transactions between affiliates is examined. A filing with the Commission before such
transactions occur allows the Commission to establish the rules under which cost recovery may
occur. In that process the Commission also considers customer safeguards.
Request No. 12: At page 7, line 15 of Mr. Hessing s direct testimony he writes
, "
Safeguards
could include a proper Code of Conduct or a requirement for lower-of-cost-or market pricing." What
statute, order, rule or guideline was Mr. Hessing relying on which requires A vista Utilities to receive
a price for physical or financial natural gas transactions at the lower of cost or market when securing
fuel supply for electric generation from its affiliate A vista Energy? Please provide a copy of all
relevant documents.
Response No. 12: Again, there are no written statutes, orders, rules or guidelines for this
specific situation for the reasons stated in Response No.1 O. Because of self-dealing questions, the
prudence of transactions between affiliates is examined. Staff s proposal to give customers the lower
price, cost or market, in Deal "B" transactions safeguards customers in this situation where serious
self-dealing questions have been raised. Staff believes that FERC established the lower of cost or
STAFF RESPONSE TO THE SECOND
PRODUCTION REQUEST OF A VISTA JULY 7, 2004
market guideline when addressing affiliate transactions. If Staff can locate that reference it will be
provided to the Company in a supplemental response to this question. Other FERC comments
regarding affiliate transactions and the potential for self-dealing have also been reviewed by Staff.
Reference Boston Edison Company re: Edgar Electric Energy Company, FERC Docket No. ER91-
243-000, 55 FERC ~ 61 382 (1991); Southern California Edison Co. on behalf of Mountainview
Power Co., LLC, FERC Docket No. ER04-316-000, 106 FERC ~ 61 183 (2004).
Request No. 13: At page 16, line 2, of Mr. Hessing s direct testimony he writes
, "
It is Staffs
position that the Company violated both the intent and the written requirements of its own Energy
Resources Risk Policy." What portions of, or wording from, the Company s Risk Policy did Mr.
Hessing rely upon to support his conclusion that A vista violated the written requirements of its own
Energy Resources Risk Policy?
Response No. 13: Section E of the Company s Energy Resources Risk Policy contains four
subsections. It is Staffs position that Avista s Deal "B" violated one or more of the written
provisions under each of the four sections. For example: The Company did not transact toward zero.
During the period that the deal was priced at index, the Company did not properly calculate the
imbalance. V olumetric limits were exceeded and the time to cure was ignored. (Staff Confidential
Exhibit No. 139, Page 32-34 of 50).
Dated at Boise, Idaho, this 7h day of July 2004.
Scott Woodbury
Deputy Attorney General
Technical Staff: Keith Hessing
T em Carlock
i:umisc:prodreq/response/avueO4.avugO4.1sw staff response 2 to av
STAFF RESPONSE TO THE SECOND
PRODUCTION REQUEST OF A VISTA JULY 7, 2004
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 7TH DAY OF JULY 2004 SERVED
THE FOREGOING COMMISSION STAFF RESPONSE TO THE SECOND
PRODUCTION REQUEST OF A VISTA CORPORATION, IN CASE
NO. A VU-04-lIA VU-04-, BY MAILING A COpy THEREOF POSTAGE
PREPAID TO THE FOLLOWING:
DAVID J. MEYER
SR VP AND GENERAL COUNSEL
VISTA CORPORATION
PO BOX 3727
SPOKANE WA 99220-3727
E-mail dmeyer~avistacorp. com
KELLY NORWOOD
VICE PRESIDENT STATE & FED. REG.
AVIS T A UTILITIES
PO BOX 3727
SPOKANE WA 99220-3727
E-mail Ken y .norwood~avistacorp. com
CONLEY E WARD
GIVENS PURSLEY LLP
PO BOX 2720
BOISE ID 83701-2720
E-mail cew~givenspursley.com
DENNIS E PESEAU, PH. D.
UTILITY RESOURCES INC
1500 LIBERTY ST SE, SUITE 250
SALEM OR 97302
E-mail dpeseau~excite.com
CHARLES L A COX
EV ANS KEANE
111 MAIN STREET
PO BOX 659
KELLOGG ID 83837
E-mail ccox~usamedia. tv
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH ST
BOISE ID 83702
E-mail bmpurdy~hotmail.com
CERTIFICATE OF SERVICE