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HomeMy WebLinkAbout20070312_1857.pdfDECISION MEMORANDUM TO:CO MMISSI 0 NER KJELLAND ER CO MMISSI 0 NER SMITH CO MMISSI 0 NER RED FO RD COMMISSION SECRETARY COMMISSION STAFF LEG AL FROM:CECELIA A. GASSNER DATE:MARCH 7, 2007 SUBJECT:VISTA CORPORATION'S APPLICATION REQUESTING APPROVAL OF A NATURAL GAS TRANSPORTATION SERVICE AGREEMENT, CASE NO. AVU-07- On February 20, 2007, Avista Corporation ("Avista" or "Company ) filed an Application with the Commission requesting approval of a Natural Gas Transportation Service Agreement (the "Agreement") between the Company and Potlatch Forest Products Corporation Potlatch"). This Commission has the jurisdiction over such request pursuant to Idaho Code 61-307, 61-622 and 61-623. The Company requested that the Application be processed by Modified Procedure. THE APPLICATION According to the Application, A vista has been providing natural gas transportation service to Potlatch's Lewiston, Idaho plant under an existing agreement since 1993. During that time, Potlatch has increased its efficiency and reduced its annual natural gas consumption from 64 million therms to 38 million therms.Application at 2.In addition, A vista has seen considerable load growth in the Moscow/Lewiston area and an increased need for pipeline capacity. Id. Avista and Potlatch negotiated a capacity release agreement, and Potlatch expressed its desire to negotiate a new gas distribution agreement as well. Id. at 3. The initial term of the Agreement is ten years, beginning the day following Commission approval and ending November 30, 2016. The parties have agreed on charges based upon Potlatch's desire to pay Avista for distribution service in the future that more reasonably reflects the alternative cost of connecting directly to a different pipeline, and Avista desire to retain a reasonable level of distribution charges. Id. at 3-4. Based on Potlatch's usage DECISION MEMORANDUM in 2006, its annual bill under the existing agreement is $264 000. Id. at 4. Under the Agreement Potlatch would pay: $185 000 through November 2007; $150 000 from December 2007 through November 2008; $111 000 from December 2008 through November 2009; and $74 000 per annum from December 2009 through the end of the Agreement. Id. The Company believes that the current and projected rate of growth it is experiencing in north Idaho should offset a portion of the lost revenue/margin received from Potlatch under the existing agreement. Id. at 4- ST AFF RECOMMENDATION Staff recommends that the Company s Application be processed by Modified Procedure with a twenty-one (21) day comment period. This should allow sufficient time for interested parties to review the Company s Application and file their comments with the Commission. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. COMMISSION DECISION Does the Commission preliminarily find that the public interest may not require a hearing to consider the issues presented in this case, and that this case is appropriate for Modified Procedure pursuant to Commission Rules of Procedure 201 through 204? Does the Commission approve of the recommended comment period? Cecelia A. Gassner M:A VU-O7- DECISION MEMORANDUM