20110822Avista 001- 007 to Clearwater.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
RE-C.t:I\lFf)¡" ",.. ". ;'...c.',
~'V'STA.
Corp.
2011 AUG 22 PH 2: 30
August 17,2011
Richardson & O'Lear, PLLC
Mr. Peter Richardson
515 N. 27th Street
Boise, ID 83702
Re: Production Request of Clearater Paper Corporation in Case Nos. A VU-E-II-0l and
fA VU-G-ll-Ol
Dear Mr. Richardson,
Provided electronically are an original of Avista's responses to Clearater Paper Corporation's
production requests in the above referenced docket. Included in the email are Avista's responses
to production requests 001- 007.
Also included is Avista's CONFIDENTIAL response to Clearwater 005C. 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. It
is being provided under a sealed separate envelope, marked CONFIDENTIA.
If there are any questions regarding the enclosed information, please contact me at (509) 495-
4584 or via e-mail atpau1.kimabll(Ðavistacorp.com
~fi
Paul Kimball
Regulatory Analyst
Enclosures
CC (Email): all paries electronic
.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
AVU-E-11-Ol / AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-OO 1
REQUEST FOR PRODUCTION NO.1
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
08/16/2011
Tara Knox
Patrck Ehrbar
State & Federal Regulation
[phone]
On page 10 of Patrck Ehrbar's Direct Testimony he sttes:
Upon evaluation of the cost of service results, it was determined that an across the board
unform percentage movement towards unty (e.g., a 50% movement) would cause some
schedules to receive a rate decrease, while others would receive an increase twice as large
as the overall request.
Pleae provide an electronic copy, with all formula and links intat, of the cost of serice stdy
referenced above. Please include, also in electrnic format where possible, all work papers and
other documents used in the development of the cost of serce study.
RESPONSE:
The requested cost of serce study was provided in the Ms. Knox's electronic workpaper which
were included on the CD that accompanied the case.
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A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
08/16/2011
Patrck Ehrbar
Patrck Ehrbar
State & Federal Regulation
[phone]
IDAHO
AVU-E-11-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-002
REQUEST:
REQUEST FOR PRODUCTION NO.2
On page 10 of Patrick Ehrbar's Direct Testimony he states:
Application of a unform percentage across rate Schedules results in a sligbt movement
toward unty for Schedules 1, 11/12,21/22, and 25, and small movement away frm unity
for the other schedules, none ofwhicb I would consider materiaL.
In Table 5, on page 11 of Patrck Ebrbar's Direct Testimony indicates Clearater Paper
Schedule 25P is the only customer class with a rate of retur at present rates over 1.00 that shows
an increas in the rate ofretu with the Company's proposed rate increae.
Pleae explai fully why the Company considers ths not material especialy given the fact it is
proposing Cleaater's rates increa by more than $1.5 millon.
RESPONSE:
As Mr. Ehrbar stated in his direct testimony, the Company believed that substantial movement
towards unity for rate schedules, which would result in some schedules receiving an overall rate
decrease while others would receive a rate increase, was not appropriate given the size of the
revenue requirement.
We also took into consideration the fact that the Company's cost of serce study filed in the case
included some new proposals that affects where the retu for each class is in relation to unity. For
example, A vista proposed a new peak credit method base on the system load factor, and also
included a new proposal using a weighted, 12-coincident peak to allocate transmission
demand-related transmission costs.
Specifically, with regard to the Clearater Schedule 25P, under the prior cost of serce
methodology adopted by the IPUC, the Clearater retu would be below unity, which would
indicate a need for a rate increase higher than the system average increase.
.JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
AVU-E-11-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearwater-003
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
08/16/2011
Tara Knox
Patrck Ehrbar
State & Federal Regulation
[phone]
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
REQUEST:
REQUEST FOR PRODUCTION NO.3
The Company is adding the following tarff language to the 25P taff:
The anual minimum will also be proted ifbase rates change durng the 12-month
period. The annua minimum is based on 916,667 kWh's per month (11,000,000 kWh's
anually), plus twelve months multiplied by the monthly mimum demad chage for
the fit 3.000 kVa of demand. The anual minimum reflected above is based on base
revenues ~nly. Any other revenues paid by customers in their biled rates (such as the
DSM Tarff Rider Schedule 91) do not factor in to the anua minimum caculation.
Please provide a numerical exaple of a base rate change durng a 12~month period tht would
impact Clearater Papr's bils in the prorated maner suggeste in the aded langue to the
25P taff.
. RESPONSE:
By way of background, the anual minimum for Schedule 25P is based on 11,000,000 kWhs
anually. In 2010, Clearwater used approximately 890,000,000 kWhs. Clearater's anual bil is
multiples higher than the anual minimum, and therefore is unaffected by it. That being said,
below is an example using 2010 rates of how the Company would prorate the anual minimum:
Number of
Months in 2010
9
3
12
Annual Pro Rated
Minimum Amount
SSS,6(.();$ .... 4l~,7().() i
..$.§Q~!leQ:QQ..:...$.. ,..,".lSQ!.~~~:QQ"
. $ .. ...~~?~~~~.OQ
Annual Minimum in effet on January 1, 2010
Anriu-,~I.l\iri.il1tlm in effct on Oeto~~r.l,2g1() .
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
08/16/2011
Patrck Ehrbar
Patrck Ehrbar
State & Federal Regulation
[phone]
IDAHO
AVU-E-11-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-004
REQUEST:
REOUEST FOR PRODUCTION NO.4
Avista's filing proposes that Schedule 25P's over all biled rates should. incree is 3.3%. Please
explain fully why the Company is proposing the ::3,000 kVarate increas by 4.2% frm. $12,000
to $12,500; and the "3,000 kVa rate is increasing by 12.4% - from $4.00 to $4.50 - tht 1S nealy
four times the overall increase, while the other rate elements ar less th the overall increae.
RESPONSE:
On pages 19-20 of Mr. Ehrbar's testimony, he states:
The system allocated demand cost from the cost of service study is approximately $18.26
per kilowatt (kW) month. The Company's present monthy demand charges range from
$4.0o-$4.75/kW, depending on serce schedule. While the exact level of costs classified
as demand-related can be debated, clearly the levels of demand charges wil continue to be
well below demand-related costs.
In addition, the Company's transmission and distrbution system is constrcted to meet the
collective peak demand of its customers. Furher, the Company must have adequate
resources available to meet peak demand. If customers reduce their peak demand, it wil
reduce the need for additional investment in these facilties and resources. Customers need
to receive the proper price signal to encourage a reduction in their peak demand, i.e., higher
demand charges.
As the Company explained in testimony, we believe that it is important to increase the demand
charge in this case for Schedule 11/12, as well as for Schedules 21/22 and 25, by a percentage
greater than that applied to the energy rates, in order to move the demand charges closer to the cost
of servng demand.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
AVU-E-11-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-005
REOUEST FOR PRODUCTION NO.5
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
On pages 18 and 19 of Clint Kaich's Direct Testmony he sttes:
08116/2011
Clint Kalich
Patrck Ehrbar
State & Federal Regulation
[phone]
The Company modeled Cleaater Paper's generation and loads in line with our
contrts. Clearwter's entire load is included in the proforma. Its genertion is included
as a portfolio resource. Generation is represented as 2010 actuls.
Pleas provide Clearater Paper's the loads and generation usd in ths fiing along with any
supportng documents and work papers.
RESPONSE:
Please see the Company's response Clearater-005C.
Please note that the Company's response Clearater-005C contains TRAE SECRET,
PROPRIETARY or CONFIDENTIAL information and are separately fied under IDAPA
31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code.
.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
AVU-E-11-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-006
REOUEST FOR PRODUCTION NO.6
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
08116/2011
Tara Knox
Patrck Ehrbar
State & Federal Regulation
[phone]
Plea provide an electrnic copy, with all formula and links inta supportng Exhibit 12
atthed to Tara Knox's Direct Testiony. Please include, also in electronic format where
possible, all work paper and other documents used in the development of Exhibit 12.
RESPONSE:
The requested Exhibit was provided in the Ms. Knox's electronic workpapers which were included
on the CD that accompanied the case.
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
AVU-E-ll-Ol 1 AVU-G-11-Ol
Clearater Paper
Production Request
Clearater-007
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
08/16/2011
Bil Johnson
Ron McKenzie
State & Federal Regulation
[phone]
REQUEST:
REQUEST FOR PRODUCTION NO.7
Reference the Settlement Stipulation approved in A VU-E-IO-OI, at ~ 8. Has Avista included aU
fixed costs for the Lacaster Plat in base rates in this filing? Please explai where in the curent
fiing the fixed costs for the Lancasr Plant appear. Please explai why the Company has
requested recovery of$3.15 millon in "Lancasr Fixed Costs" in the power cost adjustment in
A VU-E-II-03. Reference Johnson, DI, p. 3, A VU-E-II-03. Pleas explain how it is appropriate
to request recovery affixed costs in both cases.
RESPONSE:
A vista has included all fixed costs for Lancaster in the present rate fiing. The power purchase
agreement charges are included in Account 555 - Purchased Power Expense, gas transportation is
included in Account 547 - Fuel Expense, and BP A transmission charges are included in Account
565- Transmission of Electrcity by Others Expense.
Lancaster fixed costs are included in the Power Cost Adjustment (PCA) rate fiing, A VU-E-II-03,
for the three months of July, August, and September of 2010. Please see the direct testimony of
Willam Johnson in that case, on page 2, lines 13-16. The peA deferral period in A VU-E-I1-03 is
the twelve month perod of July 2010 through June 2011. Since the Lancaster fixed costs were not
included in base rates until October 1, 2010, and since IPUC Order No. 30856 dated July 17, 2009
allowed for 100% deferral of fixed costs in the PCA (see footnote 2 on page 2 of Wiliam
Johnson's testimony in A VU-E-11-03), the Lancaster fixed costs were defered for the
thee-month period of July, August, and September of2010.
It was appropriate, and allowed by Order No. 30856, to recover Lancaster fixed costs through PCA
deferals until the costs were recovered in base rates on October 1, 2010. It is appropriate to
continue to recover Lancaster fixed costs in base rates by including those costs in the present rate
filing.