20150812AVU to Staff 44.docx

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:IDAHODATE PREPARED:08/10/2015CASE NO.:AVU-E-15-05/AVU-G-15-01WITNESS:Bryan CoxREQUESTER:IPUCRESPONDERS:J Schlect/K DillonTYPE:Production RequestDEPARTMENT:Transmission ServicesREQUEST NO.:Staff–044TELEPHONE:[phone]
REQUEST:
Please describe Peak’s services to the Company (See Cox DI, pg. 9, line 4), and respond to the following:
Does the Company utilize additional services from Peak including the Advanced Applications or the Enhanced Curtailment Calculator?
Please compare the Company’s costs under the previous funding framework (i.e., under Section 215) and the newly adopted Alternative Funding Agreement.
Please provide a copy of the Company’s current agreement with Peak.
Please describe the Company’s input to the current Peak Section 21 review.RESPONSE:
1.Pursuant to applicable reliability standards and the NERC functional model, the Company is obligated to procure the services of a Reliability Coordinator (“RC”). Under current funding arrangements, Peak’s services include performing the RC Function for the Company, as well as maintaining the Tag Authority Service and Western Interchange Tool. Peak is currently the only RC alternative available to the Company.At this time, the Companyis utilizing Peak’s Hosted Advanced Applications. It is the Company’s understanding that the Enhanced Curtailment Calculator is still in the development stage and is not yet ready to be used.
2.Performance under the newly adopted Reliability Coordinator Funding Agreement (“Agreement”) does not begin until January 1, 2016 (see Section 5.1, p. 18 of the Agreement) and, to the Company’s understanding, Peak continues in discussions with additional prospective Funding Parties. Assuming all prospective Funding Parties execute the Agreement per the recently approved 2016 Peak budget of $44,594,311, the Company would expect to be allocated approximately 1.6%, or about $715,000. Notwithstanding the apparent impermissibility of Section 215 funding for reliability coordination activities, it appears thatthe Company’s allocated Peak costs under a Section 215 frameworkwould be comparable to its allocated costs under the Agreement. Heretofore, WECC has implemented its cost allocation practices under Section 215 by invoicing Balancing Areas and Load Serving Entities (“LSEs”) within the WECC footprint. Per a recent FERC ruling (see RC13-4-000 and RC13-4-001), a significantnumber of former LSEs have de-registered with NERC. Even were Section 215 funding for reliability coordination activities permissible, it is not clear how an equitable allocation to end users under Section 215 might be implemented; neither WECC, Peak or the Company have any current contractual or other means by which to allocate or sub-allocate any assessed Section 215 amounts to end users served by, or otherwise represented by, any unregistered load-serving entity. Since none of the twelve wholesale utility customers of the Bonneville Power Administration that lie within the Company’s Balancing Area – making up approximately 20% of the Company’s Balancing Area load – are registered LSEs with WECC/NERC, it is not clear that Peak cost allocations under either a Section 215 framework or the Agreement would differ substantially.
3.A copy of the Reliability Coordinator Funding Agreement between Peak Reliability, Inc. and Avista Corporation, executed by the Company on July 16, 2015, is included as Staff_PR_044 Attachment A. Note that the Company has not yet received a return copy of the agreement executed by Peak.
4.The Company has not provided any formal comment in Peak’s Section 21 review process.