20030225Order No 29200 Notice of Hearing.pdf

Office of the Secretary
Service Date
February 25, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
POTLATCH CORPORATION,
Respondent.
NOTICE OF SCHEDULING
CASE NO. A VU-02-
Complainant
NOTICE OF HEARING
VISTA UTILITIES,
ORDER NO. 29200
COMPLAINT
On December 24, 2002, Potlatch Corporation (Potlatch) filed a Complaint with the
Idaho Public Utilities Commission alleging that A vista Corporation dba A vista Utilities has
failed and refused, and continues to fail and refuse, to purchase the cogeneration output of
Potlatch's qualifying facilities (QFs) at its Lewiston facility. Reference Public Utility
Regulatory Policies Act of 1978 (PURPA).
Potlatch is a forest products company that operates wood pulp, paper board, tissue
and wood products manufacturing plants at Lewiston, Idaho. Potlatch states that it owns and
operates four separate qualifying facilities at its Lewiston facility capable of generating
approximately 95 MW of energy. From 1991 through December 31 , 2001 , Potlatch sold the
electric energy produced by its QFs to Avista pursuant to the provisions of an Electric Service
and Purchase Agreement between Potlatch and A vista dated January 3 , 1991. Reference Case
No. WWP-91-, Order No. 23858.
On October 2, 2001 , Potlatch contends that it filed with Avista, in the manner
required by applicable Commission Orders, its written request for a firm quote for A vista
purchase of its qualified facility s generation after the expiration of the 1991 Agreement. The
parties have been unable to negotiate a PURP A contract. The meetings between the parties
Potlatch contends, have served only to establish the fact that Potlatch and A vista have
fundamental and irreconcilable differences that will not be resolved through further negotiations.
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ORDER NO. 29200
Potlatch contends that A vista has failed and refused to offer Potlatch a PURP A
contract that complies with PURPA's requirements and this Commission s Orders. Specifically,
it states, the purchase power rates proposed by A vista are well below A vista s avoided costs as
defined in 18 C.R. 9292.101 and the Commission s Order establishing a methodology for
avoided cost rate negotiations for QFs larger than 1 MW. In addition, Potlatch contends that
A vista is attempting to impose unreasonable contract terms and conditions as a prerequisite to
any purchase from Potlatch.
ANSWER
On January 27, 2003 , Avista filed an Answer, affirmative defense, and Request for
Deferral of Hearing. A vista contends that Potlatch has never unconditionally offered a quantity
of power to Avista that it desired to supply, the period of time that it desired to supply such
power or the non price-related features of the contract that it desired. A vista contends that
Potlatch has not been "ready, willing, and able" to enter into a contract for the sale of power that
sets forth specific obligations of the parties and that conforms with the requirements of the
Commission.
REQUEST FOR DEFERRAL OF HEARING
A vista requests that the Commission defer any action on the Complaint for a period
of 90 days and encourage the parties to engage in further settlement discussions, with Staff s
active participation. In support of its request, A vista submits that there have been no substantive
communications for nearly a year respecting the possible sale of power by Potlatch to A vista.
Furthermore, A vista contends that wholesale market conditions have changed subsequent to the
last discussion, which may improve the opportunity for A vista and Potlatch to reach agreement
on a sale of power from the Lewiston facility. If the Commission defers action upon the
Complaint, A vista states that it will endeavor to initiate settlement discussions with Potlatch for
the purpose of attempting to resolve disputed matters without the necessity of hearing. A vista
notes that it has requested the participation of the Commission Staff to help facilitate settlement
discussions, and Commission Staff has agreed to participate.
On February 7, 2003, Potlatch filed a response to Avista s Request for Deferral of
Hearing. Potlatch opposes A vista s request. Potlatch contends that despite roughly two years of
off and on negotiations, the parties have been unable to come to any type of meeting of the
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ORDER NO. 29200
minds regarding the sale of Potlatch's cogeneration to Avista. Without debating the merits of its
case, Potlatch contends that all of Avista s purchase proposals essentially amount to little more
than an offer to purchase Potlatch's output at short-term market prices. This, Potlatch contends
is unacceptable. Potlatch concludes that the parties are at an impasse that can only be resolved
by a Commission decision.
With respect to Avista s argument that proceedings should be continued to allow
further negotiations in the light of recent conditions, Potlatch states that it is always willing to
entertain a legitimate and reasonable proposal. The suggestion that such a proposal might be
forthcoming is not, however, Potlatch contends, a reasonable ground for delaying these
proceedings. If A vista has a new proposal to make to Potlatch, Potlatch contends that it should
submit it in writing and Potlatch will respond in good faith. In the meantime, Potlatch contends
that there is no reasonable basis for delaying these proceedings.
COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. A VU-02-08 and
has considered Avista s Request for Deferral of Hearing and Potlatch's related response. The
Commission sees no reason that negotiation cannot proceed on a simultaneous path with a
schedule for hearing.Establishing a hearing date, we find, establishes a date certain for
resolution of this matter. That being said, however, the Commission strongly encourages
Potlatch and Avista to negotiate towards a proposed settlement of this case. We accordingly find
it reasonable to deny Avista s request to stay proceedings and establish the scheduling set forth
below.
YOU ARE HEREBY NOTIFIED that the parties and the Commission have agreed to
the following scheduling:
Friday, April 25 , 2003
Friday, May 23, 2003
Friday, June 6, 2003
Prefile deadline-Potlatch direct testimony
Prefile deadline-AvistaiStaff direct testimony
Prefile deadline-Rebuttal testimony
YOU ARE FURTHER NOTIFIED that discovery is available in Case
No. AVU-02-08 pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.221-234.
NOTICE OF SCHEDULING
NOTICE OF HEARING
ORDER NO. 29200
YOU ARE FURTHER NOTIFIED that technical hearing in Case
No. AVU-02-08 is scheduled to commence MONDAY. JUNE 16. 2003. IN THE
COMMISSION HEARING ROOM. 472 WEST WASHINGTON STREET. BOISE.
IDAHO.continuing to June 17 and 18 at the same location if necessary.
YOU ARE FURTHER NOTIFIED that all hearings in this matter will be held in
facilities meeting the accessibility requirements ofthe Americans with Disabilities Act (ADA).
Persons needing the help of a sign language interpreter or other assistance in order to participate
in or to understand testimony and argument at a public hearing may ask the Commission to
provide a sign language interpreter or other assistance at the hearing. The request for assistance
must be received at least five (5) working days before the hearing by contacting the Commission
Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
Mail: jjewell~puc.state.id.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and the Public
Utilities Regulatory Policies Act of 1978 (PURP A) and that the Commission may enter any final
Order consistent with its authority.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED that Avista s Request for Deferral of Hearing in Case No. AVU-02-
is denied.
IT IS FURTHER ORDERED and the Commission does hereby adopt the scheduling
and hearing dates set forth above.
NOTICE OF SCHEDULING
NOTICE OF HEARING
ORDER NO. 29200
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this J./
day of February 2003.
~JJ~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
vld/O:A VU-O2-08 sw
NOTICE OF SCHEDULING
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ORDER NO. 29200