20040831Avista Answer to Motion to Compel.pdf

DAVID J. MEYER, Esq.
, CHIEF COUNSEL
for REGULATORY AND GOVERNMENTAL AFF AIRS
VISTA CORPORATION
O. BOX 3727
1411 E. MISSION AVE., MSC-
SPOKANE, W A 99220-3727
david.meyer~avistacorp. com
Attorney for Avista Utilities
[phone]
[phone] (FAX)
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA 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. AVU-O4-
A VU -O4-
ANSWER OF A VISTA
CORPORATION TO
POTLATCH CORPORATION'
MOTION TO COMPEL
Avista Corporation, by and through its attorney of record, David J. Meyer, hereby answers
Potlatch Corporation s Motion to Compel Discovery Responses, dated August 24 2004.
In its Sixth Set of Discovery Requests served upon A vista Corporation, Potlatch requested
various information pertaining to the possible purchase, by Avista, ofMirant Corporation s one-
half ownership interest in Coyote Springs 2. (Potlatch's Sixth Set of Data Requests were appended
to Potlatch's Motion as Exhibit A.) Avista objects to these requests on the following grounds: The
possible purchase of Mirant' s interest in Coyote Springs 2 is not at issue in these proceedings;
A vista has asked for no rate relief or other regulatory treatment with respect to this potential
transaction in this docket. Should A vista consummate this purchase, any request for associated rate
reliefwill be the subject of future proceedings, which will afford all parties the opportunity for
discovery.
A VISTA'S ANSWER TO POTLATCH'
MOTION TO COMPEL Page
Moreover, it should be recognized that only a confidential non-binding letter of intent has
been executed. A definitive purchase and sale agreement has yet to be executed. Unless and until
such an agreement is reached, any such purchase remains indefinite.
Therefore, contrary to Potlatch's assertions, the information requested is not relevant
to the subject matter involved in the pending action. Nor will it suffice to argue that the "price and
terms of the potential purchase" are somehow relevant to the plant's fair market value. (See para. 4
of affidavit of Conley Ward.First of all, a definitive purchase agreement has not been executed
between A vista and Mirant, governing all essential terms; only a non-binding letter of intent exists.
More importantly, at issue in this rate case are the facts and circumstances known to Avista at the
time it decided to initially acquire Coyote Springs 2 - not the terms of a potential purchase several
years later of Mira nt's share.
Potlatch also asserts that this potential acquisition "calls into question the prudence of
Avista s resource acquisition strategies.
" (
Id.Should Avista actually acquire Mirant's share of the
plant, and at such time as A vista seeks regulatory cost recovery, Potlatch and other interested
parties will have ample opportunity to examine this purchase and explore A vista s resource
acquisition strategies. It has not been this Commission s practice to pre-determine the prudence of
a potential transaction involving the possible acquisition of a utility plant.
For the foregoing reasons, Potlatch's Motion to Compel should be denied.
Respectfully submitted this 27th day of August, 2004.
~~-II
idJ.Meyef
VP and Chief Counsel for Regulatory
and Governmental Affairs
A vista Corporation
A VISTA'S ANSWER TO POTLATCH'
MOTION TO COMPEL Page 2