20080731AVU to Staff 209, 213-214, 218.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
JiVISTJI"
Corp.
\'"lJ;
July 30, 2008
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83720-0074
Att: Scott Woodbury
Deputy Attorney General
Re: Production Request of the Commission Staff in Case Nos. AVU-E-0,8,.0.i and
A VU-G-08-0l
Dear Mr. Woodbur,
......;,..",
Enclosed are an original and three copies of Avista's responsestöIPtJC Staffs production
requests in the above referenced docket. Included in this mailingåre-',Avista's responses to
production requests 209, 213, 214 and 218. The electronic versiol1s"cr,e,the responses were
emailed on 7/29/08 and are also being provided in electronic format OIl'ihè CDs included in this
mailing.
Also included is Avista's CONFIDENTIAL responses PR-218C. This response contains
TRAE SECRET, PROPRIETARY or CONFIDENTIAL information and is separately filed
under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code, and pursuant to the
Protective Agreement between Avista and IPUC Staff dated March 13, 2008. It is being
provided under a sealed separate envelop, marked CONFIDENTIA.
If there are any questions regarding the enclosed information, please contact me at (509) 495-
8620 or via e-mail atpat.ehrbar~avistacorp.com
Sincerely,(;~~
Patrck Ehrbar
Regulatory Analyst
Enclosures
CC:Brad Purdy, CAP AI (Paper and Email)
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
A VU-E-08-01 1 A VU-G-08-01
IPUC
Production Request
Staff-209
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
07/28/08
Wiliam Johnson
Wiliam Johnson
Power Supply
[phone]
REQUEST:
In reference to the PPM Wind Purchase adjustment shown on line 29 of Exhibit No.6, Schedule 2,
p. 1 of2, (W. Johnson), a wind integration cost is shown on page 44 of the confidential workpapers
of Wiliam Johnson. Please explain the source for the amount of the wind integration cost and
explain whether it is charged explicitly under the Stateline contract with Avista, by BPA, or by
some other utility. If the cost is not charged explicitly and is instead assumed internal to Avista's
system, please explain why it is not captured in other A vista system operational costs.
RESPONSE:
The wind integration cost of $. 73/kW Imo is based on a preliminar BP A wind integration charge.
BPA finally settled on a wind integration charge $.68/kW/mo. The wind integration charge of
$.73/kW/mo works out to a charge of$3.33/MWh for a wind resource with a 30 percent capacity
factor ($.73/kW/mo x 1,000 kWIM 1 730 hours/mo 1 30% capacity factor).
A vista does not explicitly pay a wind integration charge in connection to the PPM Wind Purchase.
The wind integration is a cost that is par of A vista system operational costs. Actual 2007 test year
costs include the cost of providing wind integration for the PPM Wind Purchase. The 2009 pro
forma costs, however, does not include the cost of wind integration. Ths is because the AURORA
model is an hourly model that canot captue the intra-hour varation in the wind resource
generation. Also, the PPM Wind Purchase energy is a known amount in the AURORA model
based on historical hourly generation. There is no generation uncertainty or forecast error. It is
treated like a contract with a known amount of scheduled energy.
Because the AURORA model, used in the pro forma, does not capture the operation cost of wind
integration, it was included in the wind purchase expense. Because it is captued in the actual
2007
operation expenses, it is necessary to explicitly include an estimate of the cost in the pro forma,
because it is not included in the costs in the AURORA modeL. Not explicitly including the cost in
the pro forma would understate the adjustment because it would be in 2007 test year costs but not
in the pro forma.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
A VU-E-08-01 1 A VU-G-08-01
IPUC
Production Request
Staff-213
DATE PREPARD:
WITNSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
07/28/08
Wiliam Johnson
Wiliam Johnson
Power Supply
[phone]
Please provide documentation and support for the adjustment shown on line 65 of Exhibit No.6,
Schedule 2, p. 2 of2, (W. Johnson), Peaker (PGE) Capacity Sale. Workpapers show actual 2007
revenue and 2009 normalized revenue, but do not explain the adjustment in suffcient detail or
provide support for it.
RESPONSE:
The Peaker Capacity Sale is the name of the Portland General Electrc. (PGE) capacity sale after
the 1998 monetization of that contract. The contract amount is 150 MW and the rate is
$1,OOOlMlmo. The contract revenue is $150,000/mo or $1,800,000/year. The contract rate is
fixed and there is no varation in the anual contract revenue, and no adjustment from the test-year
is shown in the pro forma.
An electronic copy of the Peaker Capacity Sale (at the time ofthe contract it was Spokane Energy
LLC and Enron, who owned PGE at the time). The last page of the contract shows the fixed
capacity rate for the term of the contract. See "Staff_PR_213-Attachment A.pdf'
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.SPOKA.NE ENERGY, LLC
AND
ENRON POWER MARTING, INC.
AGREEl.NT
FOR LONG TERlVI PURCHASE
AND SALE OF FIRi"l CAP ACHY
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StafCPR _213-Attachment A.pdf Page 1 of 16
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RECITALS
1. DEFINITIONS
2. TERIvI
2.1 Effective Date
2.2 Commencement of Delíveries
2.3 Date of Termination
3. PURCHASE AND SALE OF FIRM CAPACITY
3,1 Firm Capacity
3.2 Return Energy
3.3 Points of Delivery
3.4 Schedules
3.5 Price
3.6 Service Interruptions
4. UNCONTROLLABLE FORCES AND LIABILITY
4. i Uncontrollable Forces
4.2 Liability
4..) Joinder
5. SETTLEMENTS
5.1 Accounting
5.2 Payment Dates
5.3 Method of Payment
6. FIXED RATES
7. NOTICES
8. ASSIGNMENT
9. THIRD-PARTY BENEFICIARIES
10. NO DEDICATION OF FACILITIES
1 i. IMPLEMENTATION
12. OBLIGATIONS SEVERAL
13. SEVERABILITY
14. NO WAIVER
15. ARBITRATION
15.1 Matters to be Arbitrated
15.2 Initiation and Selection of l\Ibitrators
15.3 Procedure
15.4 Costs
16. GOVERi'JING LAW
17. NO NSOL VENCY PETITION AGAIST SE
18. ENTIRE AGREEMENT
19. EFFECT OF SECTION HEADINGS
20. AMENDMENT
21. SIGNATURE CLAUSE
EXHIBIT i
SECTION
TABLE OF CONTENTS
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StafCPR_213-Attachment A.pdf Page 2 of 16
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Tl"rS AGREEÌ\1ENT, dated as of October 1, 1998, is made by fuîd between Spoka.'1e
Energy, LLC ("SE"), a Dela.ware liinited liability compa.'1Y, and Enron Power Marketing, Inc., a
Delaware corporation ("EPMI"), sometimes hereinafter referred to individually as "Pa.-r" and
colJectiveIy as "Parties."
RECITALS
VlHEREAS, EPMI desires to sell and SE desires to purchase finn Capacity at the Point
of Delivery, fuîd EPMl desires to seil and SE may desire to receive Energy at the Point of
Delivery, in accordarice with the terms and conditions set forth below; 8.l1d
WHEREAS, the Paries enter into this Agreement in good faith, so that each wil receive
long-term benefits therefrom;
NOW THEREFORE, the Parties agree as fo11o",,s:
1. DEFINITIONS
In addition to terms defined elsewhere herein, n,ihenever used in this Agreement, the
following terms, when used with irütia! capitalization, shall have the following meanings. The
singuìar of any definition shall include the plural and the plural shall include the
singular..1.1 Agreement means this Agreement for Long Term Purchase and SaIe of Fir
Capacity, as an1cnded or replaced.
1.2 BP A means the Bonneville Power Adminstration, or its successor.
1.3 CaDacitv means fiim electric generating capabilty, expressed in megawatts
(MW), which EPMi is obligated to provide to SE pursuant tosnbsection 3.1 in an
amount not to exceed the Contract Demand.
1.4
1.5
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1.6
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1.7
1.8
1.9.
Contract Demand means 150 MW for the period starting on the Initial Delivery
Date through the teno ofthis Agreement.
Dav means any 24-Hour period commencing at 0000 Hours.
Effective Date lnea.r¡s the date upon wbich this Agreement becomes effective
pursuant to the provisions of subsection 2.1 .
EIectric Power means electric pèaking capacity or electric energy or both.
Energv means electric energy, expressed in megawatt hours (MVv'h), delivered by
EPMI to SE pursuant to subsection 3.1.
FERC means the Federal Energy Regulatory Commission or its successor.
StafCPR_213-Attachment A,pdf Page 3 of 16
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1.10 Hea"V~,: Load Hours means Hours ending 0700 through 2200, Monday through
Saturday, except for Western Systems Coordinating Council (WSCC) designated
holidays.
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! .1 ! Hours or Hourly means hours measured by Pacific Time, Standard or Dayíight,
whichever is in effect at the pertinent time.
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1. i 2 Initial Deliverv Date mea.l1S the date on which the delivery of Capacity and
Energy first occurs pursuant to subsection 2.2.
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I .13 LiEhi Load Hours means all Hours except for Hea'Vì Load Hours.
U4 Point of Deliverv means the poiut(s) of delivery set forth in subsection 3.3.
1.15 Return Energv means energy delivered by SE to EPMl as a return of
Energy
delivered to SE by EPML
1.6 Week means the period of seven consecutive days, beginning each Monday at
0000 Hours.
.1.7 Work Dav means each Day that EPMland SE jointly observe as a regular work
day.
2. TER1\l
2.1 Effective Date
The Effective Date of this Agreement shall be the latest of:
(1) the date on which this Agæemenl has been executed by both Parties; or
(2) the date on which that certain Long Term Services Agreement between
EPMI and The Washington Water Power Company ("WWP"), dated as of
October 1, i 998 (the "W\\rp Contract"), is either accepted for tiing or
permitted to become effective by FERC; or
(3) the date on which the assignment from WWP to SE of
that certain
Agreement for Long Term purchase and Sale of Finn Capacity, between
WV,,'P and Portland General Electric Company ("PGE"), dated June 26,
1992, as heretofore amended (the "PGE ContracC), becomes effective.
2.2 Commencement of Deliveries
Delivery of Capacity and associated Energy will commence on the Effective Date..
StafCPR_213-Attachment A.pdf Page 4 of 16
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? .._."Date of Termination
This Agreement shall terninate at 2400 Hours on December 31, 2016. All
liabilities accrued under this Agreement prior to termination shail be preserved
until satisfied.
3. PURCHASE AND SALE OF FIR1\ CAPACITY
3. i Firm Canacitv
From the Inital Delivery Date through the remaining term of this Agreement,
EPMI shall make available to SE, and SE shall purchase, Capacity in an arncmnt
equal to the Contract Demand. At SE's request, EPMI shall deliver Energy to SE
at up to the maximum rate of delivery in any Hour equal to the Contract Demand.
Energy may be scheòu1ed for delivery during:
a) all Light Load Hours;
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b) all Heavy Load Hours, provided however Heavy Load Hour Energy
deliveries shall not exceed i ,500 MWh per day and 7,500 MVv'h per week
for the period stârting the Initial Delivery Date through the termination of
this Agreement.
3.2 Return Energy
Within 168 I-ìours of receiving Energy from EPMI, SE shaH deliver an amount of
Return Energy to EPMI equal to such Energy received. SE may deliver Return
Energy at any rate of delivery up to a maximum rate of delivery in any Hour equal
to the Contract Demand. SE shall not accrue a cumulative obligation to deliver
Return Energy in excess of 7,500 MWh staring the Initial Delivery Date through
the term or this Agreement (parial weeks shall be pro rated).
3.3 Points of Deliverv
Unless otherwise agreed by the Parties' schedulers or dispatchers:
(a) the Point of Delivery for Energy shall be the point of delivery for Energy
designated from time to time pursuant to Section 3.3(a) of the WWP
Contract as in effect on the date hereof;
(b) the Point of Delivery for Retur Energy shall be the point of delivery for
Return Energy designated from time to time pursuant to Section 3.3(b) of
the ll,,!WP Contract as in effect on the date ht.reof; and
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StafCPR_213-Attachment A,pdf Page 5 of 16
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(e) either Part may request an alternative Point of Delivery. Neither Pany
shaH be obligated to accept deliveries at such an alternate Point of
Delivery, however, acceptance of an alternate Point of Delivery shaH not
be unreasonably withheld. SE shall be responsible for all transmission
costS and losses associated with transmitting Energy and Return Energy
behveen any Point of Delivery and SE, except that EPMT shall be
responsible for any additional transmission costs and Iosses (in excess of
what would have been incured with respect to the primary Point of
Delivery) associated with transmitting Energy and Return Energy with
respect to an alternate Point of Delivery designated by EPMl.
3.4 Schedule'S
SE or its scheduling agent (collectively, the "Scheduler") shall submit
preschedules to EPMI for delivery of Energy or Return Energy by i 000 Hours on
the last Work Day prior to delivery, or at such other times as mutual!y agreed by
the Scheduler and EPMI. The Scheduler shall endeavor to avoid excessive
requests for changes from the prescheduled amounts of Energy or Retur Energy.
The Scheduler may change Energy or Return Energy schedules at any time up to
30 minutes prior to the Hour on which deliveries are scheduled to occur. The
Parties agree that amounts of Energy and Return Energy scheduled hereunder
shall be identicaI to the amounts of Energy and Return Energy scheduled pursuant
to the PGE Contract.
3.5 Price
SE shall pay EPMI for Capacity a monthly amount equal to the Contract Demand
expressed in MW multiplied by the rates shown in Exhibit 1, less the amount of
all Administrative Expense incurred by SE during such month provided, that in no
event shall thc sum of the Capacity Price and the Administrative Expenses ever
exceed a monthly amount equal to the Contract Demand expressed in MW
multiplied by the rates specified in Exhibit 1 and provided further that the actual
amount to be paid to EPMl shall be determined in accordance with Sections
2.01(c) and (d) of the Account and Control Agreement dated as of December L
1998, among SE, EPMl, WWP, Spokane Energy Funding Trust and Wilmington
Trust Company.
For puroses of this Agreement, "Administrative Expense" mean all expenses
and disbursements both reasonably incurred by SE and necessary to the operation
of its business, and includes \vithout limitation the following items of expense: all
payroll costs for employees and oftìcers of SE, office rent, utilities, telephone
charges, costs to comply with FERC regulations and requirements of state law,
legal fees, accounting fees, taxes (but excluding ta-xes on the income of SE),
payments and expenses to third pary providers (including WWP) for services
such as scheduling, purchasing, biling and management of accounts payable and
accounts receivable.
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StafCPR_213-Attachment A.pdf Page 6 of 16
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3.ó Service Interruptions
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.A.11 deìiveiÌes of Energy and Return Energy sìi.al1 be deemed to be made during
the Hours and in the ai'1ount schcduIed; provided that, if scheduled deliveries are
interrupted due 10 uncontroilable forces, as described in Section 4, such schedules
sh?Jl be adjusted to reflect such interruptions. Any scheduied àeJiveries so
interrupted shall be rescheduled at a later daie as mutually agreed by the Partics'
dispatchers or schedulers.
4. UNCONTROLLABLE FORCES AND LIABILITY
Uncontrollable Forces
Neither Party to this Agreement shall be considered to be in default in
performance of any obligation other than the payment of money hereunder if
failure of performance shall be due to uncontrollable fOTces. The term
"uncontrollable forces" means any cause beyond the control of the Pary affected,
including, but not limited to, failure or loss of facilities, flood, earthquake, storm,
fìrc, lightning, epidemic, war, riot, civil disturbance, labor disturbance, sabotage,
and restraint by court order or public authority, which by exercise of due foresight
such Party could not reasonably have been expected to avoid, and which by
exercise of due diligence it shat! be unable to overcome. A Paity shaH not,
however, be relieved of liability for failure of perfonnance if such failure be due
to causes arising out of its own negligence or to removable or remediable causes
which it fails to remove or remedy with reasonable dispatch. Any Pary rendered
unable to fulfìll any obligation by reaSon of uncontro!iable forces shan exercise
due diligence to remove such inability with all reasonable dispatch. Nothing
contained herein, however, shall be constmed to require a Party to prevent Or
settle a strike against its wilL. Damage to the electrical system of either EPMls
supplier or WWP caused by or arising out of an electrical disturbance shall be
governed under subsection 4.2 and not under the provisions of subsection 4.1.
4.2 Liability
Subject to applicable state and federal jaw which specifically limits a Part's
ability to enter into this Agreement. a.!1d except for any damage, loss, claim, cost,
charge, or liability resulting from action knowingly or intentionally taken, or
failed to be taken, with intent that injury or damage be inflcted, or which action is
wantonly reckless or grossly negligent, no Pary ("First Par") shall be liable
whether in contract, warranty, tort, or strict liabilty, to the other Part ("Second
Partv") for damage to the Second Party's electric system or facilities caused by or
arsing out or actions taken by the First Party or out of any electric disturbaiïce
originating on the electric system utilized by the First Par, whether or not such
actions or electric disturbance constituted or resuIted from the First Pary's or tIie
First Party's supplier's negligent act or omission. Each Party releases the other
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StafCPR_213-Attachment A.pdf Page 7 of 16
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Party from any such liability. This limitation and release does not apply to
liabilty for a breach of any obligation to delivery Capacity, Energy, or Return
Energy under this Agreement or any obligation to pay money u11der this
Agreement, in wlich event, a Party may pursue any remedy available at law or
equity.
Notwithstanding any provision in this Agreement to the contrary, EPMI agrees
tliat it shall be liable for any damages, including \-vithout limitation, compensatory
or consequential da,.'nages resulting from a failure of EPMI to perform under this
Agreement, including a.riy loss of revenues by SE that would have been obtained
from the resale of Capacity or Energy that would have been provided or delivered
under this Agreement, including, without limitation, (x) monetaìy damages,
incIuding aIiy damages relating to any debt obligations of SE, whether at stated
maturity or by acceleration, \-vhich arise due to the failure of PGE to ma.1(e
Capacity payments under the PGE Contract due to EPMI's failure to make
Capacity and Energy available to SE and (y) any Losses arsing from a violation
by EPMl of any Laws (including banking or securities laws).
For the purposes of this Agreement, "Losses" means liabilities, losses, darnages,
judgments and costs (including reasonable attorneys fees), and "Laws" means any
law, treaty, statute, rule regulation, ordinance, order, directive, code, policy,
interpretation of common law, now or hereafter in effect and any judgment
decree, injunction, 'WTit, determination, administrative interpretation, award,
permit, license, authorization, direction, requirement or decision of, or agreement
with or by any governmental authority,
4 ~. ._)¡pinder
in the event that POE claims that SE has failed to deliver Capacity or Energy
under the Capacity Contract, or any other dispute arises under the Capacity
Contract that, due to the similarity between the provisions of this Agreement and
thc Capacity Contract, SE desires to have a consistent resolution of such issue, SE
shaH have the iÍght to require EPMI to be joined as a third party to any arbitration
or litigation brought by POE or SE with respect to such dispute and EPMI agrees
that aì1Y such litigatJon or arbitration shall be binding upon it.
5. SETTLEMENTS
5.1 Accounting
All transactions shall be accounted for on the basis of scheduled Hourly
qua.ritities. The Paries shall maitain records of Hourly energy schedules for
accounting and operating purposes. Except as othet\vise agreed by the parties, the
accounting period for transactions hereunder shall be tbe calendar month.
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Staff_PR_213-Attachment A.pdf Page 8 of 16
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5.2 Payment Dates
By the lOlh day of each calendar month, EPMI shall submit invoices for the doliar
arnount due for services provided under this Agreement during the previous
month. SE shall pay the amount by electronic wire transfer on Or before the last
business day of the month. Amounts due shall be paid pursuant to subsection 5.3.
Simple interest shali accrue on any unpaid a.l11ounts at a rate of fifteen percent
(15%) per year until paid, or the highest rate allowed by law, whichever is lower.
Interest shall be accrued from the due date to the date of payment, a.T1d shaH be
computed on the actual number of days elapsed.
5.3 Method of Payment
Payments shall be made by electronic fund transfers to:
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EPMl: NationsBank ofTexa.c;-G!obal Finance for
Enron Power Marketing, Inc.
ABA Routing # J 110000 i 2
Account #375-046-9312
Confirmation: Enron Power Marketing, Inc.
Credit and Collections
[phone]
SE: Seattle First National Bank
(ABA # 125000024), for credit to the
Washington Water Po\-ver Compa.riy,
Account # ì 3972203
Either Party may change is transfer account specified in this subsection by giving
the other Party notice of such change as provided in Sectitm 7.
6. FIXED RATES
The rates for service specified in this Agreement shall remain Ín effect for the term ofthe
Agreement and shall not be subject to change absent the agreement of both Partíes hereto.
NOTICESI7.
Any notice provided for in, or served, given or made in connection with this Agreement,
shan be in writing and shail be deemed properly served, given or made and shaH be effective if
deUvcred iii person or sent by certified United States mail, as follows:
Ifto EPMi:
Enron Power Marketing, Inc..
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Staff_PR _ 213-Attachment A.pdf Page 9 of 16
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P. O. Box 4428
Houston. Texas 77210-4428
Attn: Power Contract Documentation Manager
FAX #: [phone]
If to SE:
Spokane Energy, LLC
P.O. Box 3727
Spokane, Washington 99220-3727
Either Party may change its address specified in this subsection by giving the other Party notice
of such change as provided herein.
8. ASSIGNl\iIENT
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This Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the Parties. SE shall not assign this Agreement or fu,y of its rights or
obligations hereunder other than to a Iender or lenders (or collateral agent, tnistee or similar
agent on behalf of such lender or lenders) providing senior financing (including the refinancing
thereof) to SE and, in the event that such lender is a special purpose trust or other special purpose
entity, to the lender or lenders (or collateral agent, trustee or similar agent or behalf of such
lender or lenders) to such specìal purpose entity. EPMI may, without the need for consent from
SE (and "vîthaut relieving itself from liability hereunder), (a) trfu'1sfer or assign this Agreement to
its AffiIiate; or (b) transfer or assign this Agreement to any person or entity succeeding to all or
substantially aU of the assets of thereof; provided, however, that in each such case (i) any such
assignee shall a¡;ïee in wTiting to be bound by the terms and conditions hereof, (ii) that certain
Performance Guaranty dated as October 1, 1998 of Enron Corp. ("Enron") relating to tIiis
Agreement shall remain in effect after such assignment and (iii) an opinion from Liddell, Sapp
ZivIey, Hill & LaBoon, L.L.P. or other counsel satisfactory to the Majority Purchasers (as
defined in a Note and Certificate Purchase Agreement (the "NPA") dated as of December 1,
1998 between Spokane Energy Funding Trust and the Purchasers named therein) Slating that the
Performance Guaranty shall remain in full force and effect to guarantee the obligations of such
assignee under this Agreement. Any attempted or purported transfer of this Agreement other
than in accoràance with this Section 8 shall be void and of no effect.
9 . THIRD-PARTY BENE:FICIARIES
The parties hereto expressly acknowledge and agree that Spokane Energy Funding Trust
and each of the Purchasers (as defìned in the NPA) are third part beneficiaries hereuri.der.
Except as proviàed in this Section 9 and as set forth in Section 20 hereof, there are no third,.pany
beneficiaries of this Agreement. Except as to the pa.rties mentioned as third pa.'1y benericíaries in
this Section 9. this Agreement shall not confer any right or remedy upon any person or emity
other than the Paries and their respective successors and assigns permitted under Section 8. No
action may be commenced or prosecuted agaInst any other Party by any such other third party
claiming to be a third-party beneíìcíar of this Agreement or the tranactions contemplated.
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StafCPR_213-Attachment A.pdf Page 10 of 16 i
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hereby. Tnis Agreement shall not release or discharge any obligation or liability of a."lY third
pa."iy to any Party or give any Lliird part any right of subrogation or action over or against any
Par.
10. NO DEDIC\ nON OF FACILITIES
(a) No undertaking by one Party to the other Party under any provision of this
Agreement shaH constitute a dedication. of the electric system of such Party (or
any portion thereof) to the public or to the other Pary.
tb) EPMI at all times shaH either (i) have contracts which provide EPMI Capacity
and Energy at least equal to the entire amount of Capacity and Energy required to
be delivered to SE under this Agreement or (ii) enter into hedging, swap or other
agreements which wil provide EPMI with the entire amount of Capacity or
Energy required to be delivered to SE under this Agreement; provided, that this
provision shall not be deemed to require EPMI to dedicate any particular contract
to the servicing of this Agreement.
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11. IMPLEMENTATION
The Parties shall take such action as may be reasonably required for t.rie implememation
and performance of this Agreement in accordance with its terms.
12. OBLIGA nONS SEVERAL
The duties, obligations and liabilities of the Parties are intended to be severa! and not
joint or collective. Nothing in this Agreement shall be construed to create an association. trust.
partnership or joint venture or to impose a trust or partnership duty, obligation or ¡iability on or
with regard to either Party. Each Party shall be individually and severally liable for its o\"In
obligations under this Agreement.
13. SEVERA.BILITY
If it appears that any Section, subsection, paragraph. clause, or provision of this
Agreement may be finally adjudicated by a court of competent jurisdiction to be invalid or
unenforceable then: 1) the remaining terms of this Agreement shall remain in fcilI force and
effect to the maximum extent permitted by law. and 2) the Parties shall meet and negotiate in
good faith to substitute or supplement provisions to preserve the intent and benefits of the
Agreement so that the trarisactions contemplated hereby are fùlfilled to the extent possible
14. NO WAIVER
Except as otherwise provided herein, no provision of this Agreement may be waived
except in writing. No failure by either Party to exercise, and no delay in exercising, any right,
power or remedy under this Agreement shall operate as a \Naiver thereof. Any waiver at any
time by a Party of its right with respect to a default under this Agreement, or with respect to any
StafCPR_213-Attachrlent A.pdf Page 11 of 16
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other matter arising in connection therewith, shall not be deemed a waiver with respect to any
subsequent default or matter.
15. ARBITRA, TION
1 5.1 Matters to be Arbitrated
The determination of any disputed matters benveen the Parties arising out of or
relating to this Agreement shall be subject to resolution by binding arbitration in
accordance with subsections 15.2, 15.3, and 15.4 below.
i - ").).~Initiation and Selection of Arbitrators
.
The Party calling for arbitration shall serve notice in v,Titing upon the other Part,
setting fortIi in detail the question or questions to be arbitrated, the relief sought,
and the arbitrator appointed by such Party. The other Part shall, within tventy-
five business days after the receipt of such notice, appoint the second arbitrator by
notice in \-\-Titing to the Party calling for arbitration, and the two so appointed shall
choose and appoint a third (¡fthe Paries have not agreed upon and appointed a
third). If such other Pary fails to appoint the second arbitrator within said
twenty-five business days, or if a third arbitrator has not been appointed by
agreement between the Paries within twenty-five business days after receipt of
notice of appointment of the second arbitrator (or, in the absence ùf such
agreement, by the two arbitrators who have been appointed), either Party, upon
five business days' written notice delivered to the other Party, may apply tathe
Chief Justice of the Supreme Cour of the State of Washington for appointment of
the second or third arbitrator, as the case may be. Neither Pary may discuss any
matter to be arbitrated with any arbitrator after such arbitrator is appointed but
príor to the arbitrators' determination, without providing notice to the other Pary
and reasonable opponunity to paricipate. The Parties intend that every arbitrator
be an unbiased person with experience in the subject matter to be arbitrated.
ì 5.3 lrocedure
Unless otherváse agreed by the Paries and except as othervri.se provided herein,
the arbitration shall be conducted pursuant to the Washington lubitration Act,
Chapter 7.04 of the Revised Code of Washington, as the same may have been or
may be amended. The rules of procedure for the conduct of the arbitration shall
be determined by a majority of the arbitrators. Such rules of procedure shall
diíCct the expeditious evaluation of the merits or the matter and rendering of
decision consistent with the complexity of the matter being arbitrated. In any
such arbitration, each Pary thereto shaH have:
(a)fuB access to the records of the other Party that pertain to the subject
matter or the controversy;.
10
StafCPR_213-Attachment A. pdf Page 12 of 16
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(b) the power to call for testimony of any director, oficer, employee, agent, or
representative ofthe other Pary havingk.nowledge relevant to the
controversy, and
(c) all other rights of discovery afforded to Parties in civii actions under the
then applicable Federal Rules ofCivIí Procedure (or rules or laws
applicable to Federal Court proceedings adopted in lieu thereor).
Disputes regarding the extent of discovery shall be resolveà by the arbitrators.
Unless otherwise agreed upon by the Parties, utie Parties hereby instrct the
arbitrators that they should render a determination of the matters submitted and
the relief awarded within thirt calendar days of the completion of the arbitration
proceeding. In determining matters submitted for arbitration, no arbitrator shall
be required to adhere to or advance the position of any paricular Part. The
determination ofthe matters submitted for arbitration shaH be made by a majority
of the arbitrators, and shall be binding as between the Parties. The determination
shall be in v"TIting and shall affirm or deny each contention ofthe Parties and
shaH set forth the reasons therefore. Tne detern1ination of the arbitrators shall be
final and binding and shall be enforceable by a court of competent jurisdiction at
the request of either Party..15.4 Costs
Each Part shall pay for the services and expenses of the arbitrator appointed by
or for it, and for all ofits O\vn costs including its own attorney fees. and
compensation for its witnesses and consultants. The costs for the services and
expenses of the third arbitrator and all administrative costs of the arbitration sha! ¡
be paid equally by the Parties.
16. GOVERNING LAW
This Agreement shaH be interpreted, constmed and enforced in accordance with the laws
of the State of Washington or the laws oftlie United States of America, whichever is applicable,
as if executed and to be performed wholly within the State of Washington.
17. NO INSOLVENCY PETITIONAGAINSTSE
EPMI hereby covenants and agrees that, until the date which is at least 9 i days following
payment in full of any evidence of indebtedness or certficates of beneficial ownership or other
s.~curities of a,riy kind issued by a trust with which SE enters into any arangement for the
Clisposition, pledge or other assignment of any assets of SE or from which SE borrows any
money, EPÌvfI wil not institute against, or join with any other person in instituting against, SE,
any proceeding under the U.S. Bankiptcy Code, or any similar insolvency proceeding. This
Section 17 shaH survive the tern1iI1ation ofthis Agreement.
.
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StafCPR_213-Attchment A.pdf Page 13 of 16
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18. ENTIRE AGREEl\lENT
This Agreement, including the exhibits hereto, constitutes and expresses the entire
agreement between the Parties concerning the subject matter hereof fuid shall not be amended or
modified except by v.,TÌtten agreement of SE and EPMI, provided ho\vever, the Parties may
establish operating procedures.
19. EFFECT OF SECTION HEADINGS
Section headings and subheadings appearing in this Agreement are inserted for
convenience only and shaH not be construed as interpretations of text.
20. AMENDjVIENT
TIlÎs Agreement may be amended onIy by a wTiting signed by the parties hereto and
consented to by the Trustee (with the consent of a majority of the Purchasers) for the Spokane
Ënergy Funding Trust.
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StafCPR_213-Attachment A.pdf Page 14 of 16
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SIGNATURE CLUJSE
The signatories hereby represent that they have been appropriately authorized to execute
this i\grcement on behalf of the Party for whom they sign.
SPOKA.NE ENEH.GY, LLC ENROl\ POWER MARKTING, INC.
11 ,() () Q
"', Bv: t Lt,l-i i \ . f ~__
M,) N;Lme: R~;;;id'~;son ---
l--- Tille: Vice President and Treasurer
fkZzL ~Namt:Mco8 S -¡r/o¿J.~5 ' ~
Title: I9GE.Ni A'NO ¿ÇrroR~ -l YA?C.
o "Je ~~a¡ "0 j ~ 'OnS\i~~pn i \n c\\'coag m: Strack chg:, doc
StafCPR_213-Attachment A.pdf Page 15 of 16
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Calendar
Year
.
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
20 ì3
2014
2015
2016
.
EXHIBIT 1
2
StafCPR_213-Attachment A.pdf
Rates
S/Mw-Mo
$1,000
51,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
Si,OOO
$1.000
$1,000
$1,000
$1,000
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Page 16 of 16
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A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITNSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
07128/08
Wiliam Johnson
Wiliam Johnson
Power Supply
[phone]
IDAHO
A VU-E-08-01 / A VU-G-08-01
IPUC
Production Request
Staff-214
REQUEST:
Please provide documentation and support for the adjustment shown on line 72 of Exhibit No.6,
Schedule 2, p. 2 of 2, (W. Johnson), Spokane Energy Services Pee - Peaker Sale. Workpapers
show actual 2007 revenue and 2009 normalized revenue, but do not explain the adjustment in
sufficient detail or provide support for it.
RESPONSE:
The Peaker Capacity Sale is the name of the Portland General Electrc (pGE) capacity sale after
the 1998 monetization of that contract. A vista serices the contract, and charges fees for its
services. Most of the fees are for Avista serices and some of the fees are cash expenses paid to
third paries. The service fee reduces Account 447 (Sale for Resale) revenue by $57,000 in the pro
forma. The amount of the service fee that A vista receives as compensation for servicing the
contract is included in Account 456 (Other Electrc Revenue) in a non power supply pro forma
account. The amount of that revenue in the 2007 test year was approximately $51,000.
There was no adjustment between the 2007 test year and the pro forma for either the reduction in
Account 447 revenue or the Account 456 revenue related to the Peaker Capacity Sale. The net
cash third party expense for servicing the Peaker Capacity Sales was approximately $6,000
($57,000 Account 447 revenue reduction minus $51,000 Account 456 other electrc revenue) in
the 2007 test year. No adjustment was made in the pro forma for either of the items, so the net
revenue reduction for the Peaker Capacity Sale Service Pee is $6,000 in the pro forma.
An electronic copy of par of the Service Pee contract for the Peaker Capacity Sale is provided as
"StafCPR_214-Attachment A.pdf'.
.CONFIDENTLAL
AND PROPRIETARY
SERVICE AGREEMENT
dated as of Decem ber 1. 1998
among
THE WASllINGTON WATER PO\lo/ER COMPANY,
Individually and as Servicer.
SPOKß..NE ENERGY, LL.C.,.
and
SPOKi\NE ENERGY FUNDING TRUST
H;Q(i'~A ~~"_~I.)~k~':
1';.(.;1:- ':A!l¡.
.
StafCPR_214-Attachment A.pdf Page 1 of3~
.CONFIDENTIAL
AND PROPRIETARY
SERVICE AGREEMENT
TH ISS ER VI CE A G REErviENT (as amended, supplemented and restated. this '"AgreemenC),
dated as of December 1. 1998, is among THE \VASHINGTON WATER PO\\lER COMPANY. a
\Vashingwn corporation (índividually."WWP:' or. in its capacity as the servicer hereunder. the
"Servicer"). SPOKANE ENERGY. L.L.c.. a Delaware corporation ("Sooka'1e Enemv") and
SPOKJ\NE ENERGY FUNDING TRUST. a Delav.iare business trust (the "Tru~f). acting by and
through \Vilmington Trust Company. a bank and trust company under the i aViS of the State of
Delaware. not in its individual capacity' bm solely as Trustee (the "Trutee").
RECITALS
Spokane Energy and the Trust have executed that certain Loan and Security Agreement of
even date herewith (as amended. supplemented and restated. the "Loan Agreement"),
Spokane Energ~and the Trèlst desire to have \V\VP 3Ct :::s servicer of the Collateral pledged
hy Spokane Energy as security for the LLC Note !including but not limited to the Capacity COnlraCl
and the EPr\:!i Cn11raci) on the ¡(:nns and conditions set forth belov,',
AGREEMENTS.For gùod and valuable consideration, the receipt and suffciency of which arC' hereby
acknowledged. WWP. the Servicer, Spokane Energy and the Trust hereby agree as foHows:
ARTICLE 1
DEHNITIONS AND GOVERNiNG PROVISIONS
Section!.O J Del~ni,tions. The capitalized terms referenced in this Agreement and noi
otherv,:Ise specifically defined herein shall have the meanings ascribed to such terms in the Glossary
attached as ADDeridix A. to the Loan Agreement.
Section 1 Jf2 Govemim! Prm'isions. The Governing Provisions set forth in Appendìx B to
the Loan Agreement shall apply to. be incorporated by reference herein and govem this Agreement
for an purposes.
.; 1 i 'No;.\ _;~~. :..,ii..:,":
~ J j,..; ~ iiü I P
StafCPR_214-Attachment A.pdf Page 2 of3
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CONFIDENTIAL
AND PROPRIETARY
Sccrion 2,03 à,ervice Fee: Payment of Certain Expenses.
(a) As compensation for the performance of its obligation under this Agreement,
the Servicer shall receive on each Payment Date. a servicing fce equal to the Administrative
Expenses (as detìned in the EPMI Contract) due 10 Spokane Energy under the EPMl Contract for
such month (the "Senrice Fee"), The Servicer shall be entitled to payment of the Service Fee only
to the extent amounts on deposit in tlie Collection Account are sufficient fòr payment pursuant !O
the Comroi Agreement
(b) The Servicer shall payout of its 0\"11 funds and not as a separte charge to the
Tmsi Or to Spokane Energy all expenses incurred by it in connection with its servicing activities íòr
the CoUmeral (including but not limited to the Capacity Coi1ract and the EPMI Comract) as herein
provided. including paymem of expenses incurred in connection with distributions and reports to
PurcÌì:.sers, Notwithsranding the foregoing the Tm51 shall noi be charged for any increased costs
of trunsmissìon from Tbe poini ofddivcry by EPr'l!! under ¡he EPl\H Contract to the point of delivêry
to Portland General under the Capacity Comra;:!.
Ie) Subjeciio Sectíön 2.0I(c) ofihe Control Agn~ement. aiiy Service Fees payabl.:
to the Servícer pursuant iO tim Section that were not paid because of a deficiency in the Collection
Account on any Puymem Date shall accrue ("Accrued. Service Fees") and be payable on an:;
subsequent Payment Date on which moneys on deposit in the Collection Account are suffìcient
iheretòr as provided in the Control i\greement.
Sèction 2.04 Jerm ofAureemenr. lìus Agreemeni snail remain in full furce and effect until
the Final Retirement Date. subject to Articles 5 or 6 hereof
ARTICLE 3
REPRESENTAT10NS AND WARRANTIES
SecTion 3.01 Serviceror \\'WP Representations and Warramies. WWP. individually and
;1s Servicer. hereb~ represents and v,arrams to Spokane Energy and the Trust as of the Closing Date:
\3) Oruaiiizâtion.and Authorit\ W\VP is a corporation duly incorporated and
\'ulidiy existing under the laws of the State of \Vashington, The Servìcer or WWP has all corporate
powers and all mmerial gO\ ernmental licenses. authoriz.:nions. COnsems. anà appro\ nis required in
each case to carryon business as no"'.. conducted,
(bl Authorization. The execution. delivery. and performance by W\VP of each
of L'1è Capacity Contract. the Transtèr Agreement and any other Operative Document, either in its
capacìt: a:; WWP or as Servícer_ to \vhich it is a pary are within its corporate powers: have been
dul: authorized by all necess3.l) corporate aciion. require no action by or in respect of. or tì!ing with.
! i"." ,\ :',"" ,.
,): ~.ll :. ".1'1"
StafCPR_214-Attachment A.pdf Page 3 of3
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
A VU-E-08-01 / A VU-G-08-01
IPUC
Production Request
Staff-218
DATE PREPARD:WISS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
07/25/08
Wiliam Johnson
Wiliam Johnson
Power Supply
[phone]
In reference to the adjustment shown on line 32 of Exhibit No.6, Schedule 2, p. 1 of2, and on line
70 of Exhibit No.6, Schedule 2, p. 2 of2, (W. Johnson), please provide a narative explanation,
along with contract excerpts, workpapers, spreadsheets or any other documentation explaining the
SMU sale. Discuss the requirements for RECs, pricing for those RECs, and pricing for the
energy provided in the sale.
RESPONSE:
Please see Avista's response 218C, which contains TRAE SECRET, PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAP A 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code, and pursuant to the
Protective Agreement between Avista and IPUC Staff dated March 13,2008.