20150812AVU to Staff 47.docx

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:IDAHODATE PREPARED:08/02/2015CASE NO.:AVU-E-15-05/AVU-G-15-01WITNESS:Bryan CoxREQUESTER:IPUCRESPONDER:Jeff SchlectTYPE:Production RequestDEPARTMENT:Transmission ServicesREQUEST NO.:Staff-047TELEPHONE:[phone]
REQUEST:
Please provide a copy of the Parallel Operation Agreement with BPA (See Cox DI, pg. 23, line 21). What would the value of the capacity be to the Company if it were to withdraw from this agreement? Does the parallel support provided by the Company assist BPA in complying with NERC reliability requirements? If so, which NERC reliability requirements? Please provide the Company’s cost/benefit analysis for providing this service to BPA.RESPONSE:
A copy of the Parallel Operation Agreement between Avista and BPA, dated December 12, 2012 (“Agreement”) is provided as Staff_PR_047 Attachment A. Were the Company to withdraw from the Agreement, no incremental value would arise from the transmission capacity used to provide parallel capacity support under the Agreement. The Company successfully negotiated a unique arrangement with BPA that identified BPA’s over-subscription of its 115kV transmission facilities between the Walla Walla and Lewiston areas and provided for compensation to the Company in lieu of BPA constructing additional transmission facilities to bypass the Company’s facilities. Provided as Staff_PR_047 Attachment B is an internal memo to file, dated January 2, 2013, that provides the basis for why the parallel capacity support under the Agreement does not impact the Company’s posted transmission capacity made available for sale to third parties under its Open Access Transmission Tariff. Accordingly, there is effectively no opportunity cost to the Company to provide parallel capacity support under the Agreement.
The Company is not aware of any specific reliability requirement for which BPA’s compliance with such requirement is aided or supported by virtue of BPA purchasing parallel capacity support under the Agreement.
As noted above, since the Company’s provision of parallel capacity support under the Agreement does not in any way impact its ability to sell transmission capacity to other parties under the Company’s Open Access Transmission Tariff, the Agreement is effectively a 100% benefit to the Company and its retail customers with no offsetting cost.