20180316AVU to Staff Attachment 14 R.PDF

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AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: MONTANA DATE PREPARED: 01/08/2018
CASE NO.: D2017.9.71 WITNESS: Mark T. Thies
REQUESTER: Public Service Commission RESPONDER: D. Machado / J. Thackston
TYPE: Data Request DEPT: State & Federal Regulation REQUEST NO.: PSC – 007(AVA) TELEPHONE: [phone] / 8550
EMAIL: [e-mail]
[e-mail]

REQUEST:
a. Please provide the remaining useful life, or depreciation schedules, associated with all Avista
generating assets sited in Montana.

b. Can Joint Applicants at this time conclusively state that they will not commit, as part of the regulatory conditions associated with this transaction, to alter the retirement date or the remaining useful life for
ratemaking purposes in Montana or other jurisdictions, adopted for any of its generating assets in
Montana?

RESPONSE:
a. PSC_DR_003(AVA) Attachment A includes a table from the Company’s most recently completed
depreciation study (completed in 2012). This table details the probable retirement year assessed for
each of the Company’s generating facilities. This table includes the Company’s Colstrip 3 and
Colstrip 4 Steam Production plants and its Noxon Rapids Hydro Production plant, which are all of Avista’s generating assets sited in Montana. As discussed in PSC_DR_003, a new depreciation study
is in process and nearly complete, but is not expected to change the assumptions concerning Colstrip
Units 3 and 4. That study will be provided when complete.

This table details estimated probable retirement years of 2034 for Colstrip Unit 3, 2036 for Colstrip Unit 4, and 2079 for Noxon Rapids.

Additionally, PSC_DR_007(AVA) Attachment A includes detail, at the FERC account level, of the
composite remaining lives associated with the capital investment at each generating unit. These rates are informed by the probable retirement years previously mentioned.
b. The Ownership and Operating Agreement for Colstrip Units 3 & 4 does not provide for a single owner
– or any combination of owners other than all six owners collectively – to commit to a retirement date
for the Colstrip generating units. Therefore, Joint Applicants cannot unilaterally commit to alter the
retirement date of the Colstrip units. With respect to the other Avista-owned generating facility in Montana, Noxon Rapids, Joint Applicants do not intend to commit to an alteration of the retirement
date or the remaining useful life for ratemaking purposes in Montana or other jurisdictions, as part of
this process.

With respect to the depreciable life of the Colstrip units for ratemaking and/or accounting purposes, Joint Applicants have not proposed to commit to an alternative depreciation schedule as part of this
merger application process. The depreciation schedule is distinct and separate from any ultimate
Staff_PR_014(AVA) Attachment R Page 1 of 2

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operational end-of-life for the Colstrip units. Were it to do so, however, in other jurisdictions, it would
only impact depreciation rates and expense in Washington and Idaho – not Montana.
Staff_PR_014(AVA) Attachment R Page 2 of 2