AVUG991.SWG.doc

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 1895

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION FOR APPROVAL OF STANDARDS FOR COMPETITIVE PRACTICES RELATED TO THE CONSOLIDATION OF GAS PROCUREMENT OPERATIONS UNDER
AVISTA ENERGY.
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CASE NO. AVU-G-99-1

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure and Notice of Comment/Protest Deadline issued on April 23, 1999, submits the following comments.

BACKGROUND
On April 6, 1999, Avista Corporation dba Avista Utilities - Washington Water Power Division (Avista Utilities; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting approval of proposed Standards for Competitive Practices (Standards).

The proposed Standards are being filed in compliance with the Commissions Order
No. 27908 in Case No. WWP-G-98-4, a case in which the Commission approved an experimental natural gas benchmark mechanism program and the consolidation of the Companys gas procurement operations under an affiliate company, Avista Energy. The proposed Standards, in concert with the proposed Avista Utilities/Avista Energy Agency Agreement (Agency Agreement), will govern the relationship, transactions and dealings between Avista Utilities and Avista Energy regarding gas procurement, storage, and management services.
The Company requests that the Standards be included as part of its Tariff Schedule 163, Natural Gas Benchmark Mechanism.

ANALYSIS
Staff has reviewed the Companys proposed Standards for Competitive Practices. The Standards are substantially similar to those authorized by the Commission for Intermountain Gas Company, Order No. 27799 (November 17, 1998). The Companys Standards and Intermountain Gas Companys Standards differ in several areas including penalty assessment (Standards Section 3.1); gas supply operations oversight (Standards Section 3.2); customer information transfer restrictions (Standards Section 4.1); as well as, deletions of sections on information transfer restrictions, gas supply contracts, and selling of excess gas, transportation and supply. Staff reviewed these differences with Avista Utilities personnel. The Company states that the changes are necessary in order to allow for management oversight. The issues are also addressed in the proposed Agency Agreement.
Staff is in general agreement with the conditions stated in the Standards, when read in conjunction with the terms stated in the Agency Agreement. However, the proposed Standards do not adequately or clearly prohibit the furnishing of market-sensitive non-public information by Avista Utilities personnel to its marketing affiliate, Avista Energy as do the related Standards approved for Intermountain Gas Company. Discussions with Avista Utilities personnel indicate that the Company is concerned that communications among the senior management personnel necessary to evaluate the financial performance of both companies not be prohibited. Staff is concerned that customer-specific non-public information not be shared.

RECOMMENDATIONS
Staff recommends approval of the proposed Standards for Competitive Practices with the following modification. Staff recommends that Avista Utilities modify item 4.1 of the Standards as follows:

4.1 Without the prior written consent of the customer, Avista may not disclose to its gas marketing affiliate or any other market participant any non-public, customer-specific information that it has from any of the following:

A customer or gas supplier
A potential customer or gas supplier
An agent of a customer or gas supplier or potential customer or gas supplier
A marketer or other supply entity seeking to supply gas to a customer or potential customer that is located in the utilitys service territory.

Staff believes this would be a reasonable compromise in that it would allow exchange of aggregated non-public information while it would protect customer-specific, market-sensitive information.
Staff believes the balance of the Standards of Competitive Practices document is acceptable at this time. Review of the conditions specified in this document are subject to modification in the future pending the results of Commission Staff audits.

Respectfully submitted this day of May 1999.

______________________________________
Scott Woodbury
Deputy Attorney General

Technical Staff: George Fink

SW:GF:gdk/misc\comments\avug991.swg

COMMENTS 3 MAY 12, 1999