20060228Lafferty direct.pdf

DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
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?FJ r;; :J: 50
JTIL IT!E S'(~6;"S! OJ
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. AVU-05-
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA DIRECT TESTIMONY
UTILITIES , a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
I. INTRODUCTION
Please state your name, employer and business address.
My name is Robert J. Lafferty.I am employed as Manager, Wholesale
Marketing & Contracts, by A vista Corporation and my business address is 1411 East Mission
A venue, Spokane, Washington.
Please state your educational background and professional experience.
I began my career at A vista Corporation in 1974 after graduating from
Washington State University with a Bachelor of Arts degree in Business Administration and
a Bachelor of Science degree in Electrical Engineering. In 1979, I passed the Professional
Engineering License examination in the state of Washington. Over the past thirty-one years I
have served in a variety of positions in engineering, marketing, and energy resources
departments. Since March 1996, I have served in various positions in the energy resources
area (electricity and natural gas) involving the planning, acquisition and optimization of
energy resources. Since December 2003, I have served as Manager, Wholesale Marketing &
Contracts, where my responsibilities include acquisition and management of long-term
electric resources.
What is the scope of your testimony in this proceeding?
My testimony will describe the appropriate approach for measuring project
net output " as defined by FERC. I will demonstrate that TRC and NorthWestern Energy
have represented that the TRC project has a capacity greater than 10 aMW on many
occasions. My testimony will also address the reasons why an "off-system" out-of-state
PURP A project should be required to make power deliveries to the utility s electric system in
Lafferty, Di
Avista Corporation
the state ofIdaho. In that regard, I will discuss Avista s proposed requirements for delivery
ofTRC project power to Avista s electric system. I will also discuss the need for contractual
assurances that TRC is, in fact, relieved of all prior obligations to NorthWestern Energy with
regard to the sale of power from the project.
I am sponsoring the exhibits and schedules listed in the following table, which were
prepared under my direction:
Exhibit No.Description
201 Excerpts from Thompson River Co-Gen LLC Amended Petition For
Acceptance Of Initial Rate Schedule, Waivers, And Blanket Authority;
FERC Docket No. ER02-298-000; December 10 2002
202 Excerpts from Co-Generation Power Sale Agreement Between Thompson
River Co-Gen, LLC and NorthWestern Energy, LLC; Dated Sept, 12
2002
203 Cover Letter: NorthWestern Energy s Electric Default Supply Tracker
Filing; Dated June 4, 2002/Filed June 7, 2004
204 Excerpts from Prefiled Direct Testimony of Mark D. Thompson On
Behalf Of NorthWestern Energy; Filed June 7, 2004
205 Excerpts from materials distributed by TRC at a meeting at A vista offices
on May 12, 2005
206 Excerpts from NorthWestern Energy Form 10-K filing with the Securities
And Exchange Commission For The Fiscal Year Ended December 31
2004; Dated July 15, 2005
207 Excerpts from Montana Air Quality Permit Application For Stationary
Sources; filed by NorthWestern Energy on November 15 2005
208 TRC Response To Avista Production Request No. 41
209 Transmission One-Line Diagram Illustrating Path From TRC to Avista
System
Lafferty, Di
A vista Corporation
II.The Thompson River Co-Gen Project's Capacity Exceeds 10aMW
Please describe the TRC project as initially described to A vista on May
, 2005.
At a meeting on May 12, 2005 , TRC represented to Avista that the project was
a 16 MW generator that was "boiler limited" to approximately 13 megawatts. Under the
TRC proposal, Avista would receive approximately 76% of the project output, or 10 aMW.
TRC further represented that "surplus energy" generated by the project would be sold to
NorthWestern Energy.The "surplus energy" representing approximately 18% of TRC
output, or 2.4 aMW, was to be delivered to NorthWestern Energy under a proposed 20-year
power purchase agreement (PP A). Thompson River Lumber Company would purchase
approximately 6% ofthe TRC output, or 0.75 aMW.
In several instances, has the TRC project been represented as having a
capacity greater than 10 MW?
Yes. The TRC project has been represented as having a capacity greater than
10 MW on a number of occasions by both TRC and by NorthWestern Energy, both of whom
are parties to a 10-year "Co-Generation Power Sale Agreement " dated September 12, 2002.
The following is a brief summary of several statements or representations made by the parties
indicating that the project output is above 10 aMW:
. TRC filed an amended petition with FERC, dated December 10, 2002, for
authority to make wholesale power sales to NorthWestern Energy under a
single rate schedule. (See Exhibit No. 201) In support of this petition, TRC
Lafferty, Di
Avista Corporation
included the 10-year "Co-Generation Power Sale Agreement" dated
September 12, 2002 as the single rate schedule for FERC approval. In its
petition, at p. 3, TRC made reference to a 16 MW project, of which up to 11
would be sold to NorthWestern Energy:
Thompson, a Montana Limited Liability Corporation
proposes to own and operate a 16 megawatt ("MW") wood
waste and coal fired cogeneration plant in Thompson Falls
Montana. Thompson has entered into an agreement with
NWE whereby Thompson will sell no more than 13 MW of
Thompson s output to NWE. The remaining 3 MW will be
sold at retail to a nearby lumber mill, Thompson River
Lumber Company.
Elsewhere in this same petition, TRC referred to 12 average MW to NWE as
part ofNWE's default supply portfolio:
Thompson will sell approximately 12 average MW to
NWE as part of NWE's default supply portfolio. The ratein that contract was negotiated in an arms-length
transaction between Thompson and NWE. This negotiated
rate forms the basis for Thompson Rate Schedule FERC
No.
Section 3.5 of the 1 O-year "Co-Generation Power Sale Agreement" dated
September 12 2002 between TRC and NorthWestern Energy filed with FERC
in Docket No. ER02-298-000 described above, refers to 16 MW as the
maximum purchase obligation of NorthWestern Energy and 13 MW as the
maximum delivery obligation ofTRC:
Capacity Entitlement Amount:Except during
Scheduled Maintenance Outages and Forced Outages
SELLER shall operate the Project during each hour at its
maximum generating capability, consistent with Prudent
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Avista Corporation
Electric Practice, and deliver all available electric output
net of station service requirements and Mill Service
Requirements to BUYER at the Point of Delivery.
Notwithstanding the foregoing, SELLER shall not be
obligated to deliver more than 13 megawatt hours of Power
to the BUYER during any hour and BUYER shall not be
obligated to purchase more than 16 megawatts of Power
during any hour. The Project shall be deemed unavailable
to generate the Capacity Entitlement Amount during any
hour when actual Project generation is less than 8.
megawatts." (See Exhibit No. 202)
In Section 3.8 of this same 10-year "Co-Generation Power Sale Agreement"
the parties referred to the project as being capable of reliably generating 12.
MW:
Successful Proiect Test.While it is estimated that
the Project will be capable of reliably generating 12.
megawatt hours per hour, its capabilities will not
precisely known until it is constructed. Actual Project
generating capability shall be tested during a consecutive
five-day period designated by SELLER prior to the
Contract Operating Date ("Test Period"). SELLER may
schedule as many Test Periods as it chooses prior to the
Contract Operating Date. During any Test Period, the
Project shall be operated at full capability during each hour
in compliance with all laws, rules, regulations, approvals
authorizations orders or other requirements of
governmental or regulatory agencies of authorities.
. An excerpt from the cover letter from NorthWestern Energy s Electric Default
Supply Tracker Filing with the Montana Public Service Commission filed on
June 7, 2004 references, at p. 2, a 16 MW facility with net output of 12 MW
Thompson River Co-gen LLC is a 16 MW thermal
generation facility located near Thompson Falls, Montana.
Net output from this facility is anticipated to
approximately 12 MW." (See Exhibit No. 203)
Lafferty, Di
Avista Corporation
The Prefiled Direct Testimony of Mark D. Thompson on behalf of
NorthWestern Energy filed June 7, 2004 with the Montana Public Service
Commission, at p. 4, also references a 16 MW plant, with net output of
Thompson River Co-gen LLC is a 16 MW thermal
generation facility located near Thompson Falls, Montana.
Net output from this facility is anticipated to
approximately 12 MW." (See Exhibit No. 204)
As previously discussed, at the May 12, 2005 meeting with Avista, TRC
distributed written materials that proposed 13.2 MW ofproject net output; 10
MW delivered to Avista; 2.4 MW delivered to NorthWestern Energy; and
79MW delivered to Thompson River Lumber Company. (Values were
derived by Avista based on data supplied by TRC.) (See Exhibit No. 205)
In NorthWestern Energy s 2004 Form 10-K as filed with the Securities And
Exchange Commission, NorthWestern discusses new resources that were
acquired by it, including 14 MW from the Thompson River Co-Gen project:
We have secured additional contracts from Thompson
River Co-gen, LLC for up to 14 megawatts of base-load
coal/waste-coal supply and Tiber Montana for 5 megawatts
of seasonal baseload hydro supply." (see p. 10) (Exhibit
No. 206)
On November 15, 2005, TRC filed an "Application For Air Quality And
Operating Permit Modifications with the Montana Department of
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Avista Corporation
Environmental Quality (MDEQ). At page 8 of the Application, TRC states
that the "Maximum Rated Design Capacity" is 16.5 Megawatts/hr and that the
Average Process Rate or Process Weight" is 12.5 Megawatts/hr (See
Exhibit No. 207)
What recent representations have been made by TRC representatives?
In response to Avista s Production Request No. 41 , TRC states that the
estimated range of (power) delivery (to Avista) on an hourly basis is between 8.5 MW and
11.5 MW" from the project. (See Exhibit No. 208) In determining the eligibility of the
project for published avoided cost rates, one must add back to those quantities the
NorthWestern 4% transmission losses of approximately 0.4 aMW and Thompson River
Lumber load of approximately 0.75 aMW in order to estimate the "net output" range of the
project. Based on TRC's statement in response to this Production Request, the "net output"
from the project would range between 9.65 MWand 12.65 MW.
In addition, TRC Witness Mr. Busch indicates, at page 6 of his testimony, that TRC
has investigated the potential to increase generating capacity (estimated up to an additional 2
MW) at an estimated cost in excess of $1.3 million. This suggests that TRC could, therefore
also increase capacity in the future beyond even the above levels.
What are some of the other factors that the Company considered as part
of determining the capacity of the TRC project?
The Company reviewed the stated nameplate of certain equipment including
the 16.5 MW steam turbine and the 17.65 MV A electric generator. The Company also
Lafferty, Di
A vista Corporation
reviewed the net output test data from the TRC project, which demonstrates the performance
of the combined boiler, steam turbine and electric generator equipment. Company Witness
Perks has explained that the TRC project has only operated in a "testing and tuning" mode
throughout its nine-month period of operation, and therefore the project output has been
intermittent and variable. However, as Mr. Perks further explains, the net output level
sustained by thermal generating plant equipment, even during the testing phase, for a period
of 16 hours a reasonable representation of the capacity of that thermal generating project
over the period of a month. The Company reviewed daily average test data from the TRC
project and found that the project was capable of operating during the testing and tuning
period at net output levels greater than 10 aMW. Based on all of the above factors, the
Company made the determination that the TRC project has a capacity exceeding 10 aMW.
III.Determination of Net Output" of a PURPA Project
How should the "net output" of a PURPA project be measured?
The net output of aPURP A (Public Utility Regulatory Policy Act) project
should be measured in a manner consistent with FERC methods of determining "net output."
FERC has consistently defined the "net output" of a PURP A project as follows:
The net output of the facility is its send out after subtraction of
power used to operate auxiliary equipment in the facility
necessary for power generation (such as pumps, blowers, fuel
preparation machinery, and exciters) and other essential uses in
the facility from gross generation output."
Connecticut Valley Electric Company lnc, v. Wheelabrator Claremont Co" LP et. aT.; Federal Register-
February 11 1998; 82 FERC61 116 atp.417 (1989)
Lafferty, Di
A vista Corporation
Therefore, net output is the gross generation output minus the load for equipment
needed to produce the power. Other uses of power, such as the Thompson River Lumber
Company load and transmission losses, are not considered in the determination of project net
output.
The following electrical one-line diagram illustrates the metering arrangement to
measure the net output for the TRC project. In this case, net output is determined
subtracting the Thompson River Lumber Company load from the energy delivered to the
NorthWestern Energy system on an hourly basis. This formula is shown on the diagram as:
Net Output Measurement
=(
MI-M2)
This formula is consistent with the FERC definition of net output, since it will effectively
measure the gross generation output minus the TRC station service load and minus any losses
associated with the step-up transformer.
Lafferty, Di
A vista Corporation
Illustration 1: TRC Project One-Line
NorthWestern Ener Transmission S stem
Thompson River Co-Gen Facility
...-A.-13.2 kV/115 kV
Transformer
13.2 kV
Thompson
River Lumber
Load
Thompson
River Co-Gen
Station
Service Load
Net Output" Measurement (Ml M2)
Taking this definition of "net output" into account, what is the "net
output" of the TRC project?
The net output capacity of the project exceeds 10 aMW on a monthly basis.
Company Witness Perks explains that, because this is a thermal-fired generation project, the
net output capacity maintained for a 16-hour period can be sustained as well for a month long
period.Company Witness Dempsey, for his part, further concludes that the levels of
emissions controls contained in the Montana Department of Environmental Quality
Lafferty, Di
A vista Corporation
(MDEQ) Preliminary Determination are achievable, with generation levels above 10 aMW.
Therefore, the project net output, as demonstrated by TRC's own test data, is above 10 aMW.
Does the Company pay for "delivered energy" at it's system point of
delivery, or does it pay for "net output" energy, in the case of an off-system, out-of-state
PURPA project?
The Company pays delivered energy at its system point of delivery. The "net
output " as defined by FERC, is used only to determine project size on a consistent basis
regardless of whether a project is on-system or off-system. Therefore, the "net output"
determination is only used to establish a project's eligibility for certain rates that are based
upon project size.
Once the rate for the project is determined, the Company then will pay that rate for all
energy delivered to its system from the project. The Company does not take title to the
power until it reaches its system.
IV.Responsibility of the Project for Deliverv of the Project's Output to
A vista s System in the State of Idaho
Should an off-system, out-of-state PURP A project be required to make
power deliveries to the utility's electric system in the state of Idaho?
Yes. A PURP A project is entitled to Commission-approved rates in cases
where the power from the project is delivered to the utility system in the state of Idaho. An
on-system, in-state project provides power deliveries over a direct interconnection managed
by the Company. The utility is not required to arrange for, or schedule, transmission to
Lafferty, Di
Avista Corporation
primary or alternate delivery points. The risks and responsibilities for delivery of power to
the point of interconnection is solely that of the project sponsor.
In the case of an off-system out-of-state PURP A project, there are important
responsibilities that reside with the project operator, associated with securing and managing
transmission, scheduling, and ancillary service functions, and providing transmission losses
associated with moving power to the point of delivery at the utility company s electric system
in the state of Idaho. Those responsibilities include the assumption of risks associated with
that delivery of power. Accordingly, the delivery of power from the project to the point of
delivery in Idaho, along with the associated cost, ultimately is the responsibility of the project
operator, not the purchasing utility.
Please describe the transmission paths from the TRC project to Avista
electric system in the state of Idaho.
The TRC project is interconnected with the NorthWestern Energy
transmission system. TRC has indicated that the primary point of delivery of TRC power
would be over NorthWestern Energy s transmission system to the Avista electric system at
the Company s Burke substation located near Burke, Idaho. Exhibit No. 209 contains a
simplified transmission one-line diagram that shows the TRC project interconnected to the
NorthWestern transmission system and the transmission path to the Company s Burke
substation. The only other interconnection between the NorthWestern Energy transmission
system and the A vista transmission system is located at the Hot Springs substation in the
state of Montana. If power deliveries for some reason could not be made a either Burke or
Hot Springs, then TRC would need to arrange for additional transmission across the
Lafferty, Di
A vista Corporation
Bonneville Power transmission system to reach the A vista electric system at some other point
of delivery.
Has the TRC project demonstrated that it has acquired a firm
transmission path to the Company s electric system in the state of Idaho?
It is the Company s understanding that TRC has yet to execute an agreement
for a firm transmission path for power deliveries to the Company s electric system in Idaho.
TRC's response to Avista s Data Request No. 18 to produce evidence of having secured such
a firm transmission path to the Company s system consists of only an unsigned agreement for
certain services apparently provided by the NorthWestern Energy merchant function. Based
on the wording of the unsigned agreement, the Company understands that it may be the case
that NorthWestern Energy merchant holds a firm 10 MW path to the Company s Burke
substation in Idaho for the purpose of providing transmission as well as possibly scheduling
and/or shaping services for TRC.Additional coordination between TRC, A vista and
NorthWestern Energy will be needed in order to arrive at agreeable terms and conditions that
can be put into place to ensure firm delivery to the primary point of delivery at the
Company s Burke, Idaho substation.
What is the Company s expectation concerning power deliveries when the
transmission lines on either side of the primary point of delivery are out of service due
to either planned or unplanned outages?
As stated earlier, the Company does not have title to the power until it reaches
its electric system at Burke, Idaho.Therefore, TRC is the party responsible to make
Lafferty, Di
A vista Corporation
arrangements to move power to an alternate point of delivery under planned or unplanned
transmission outage conditions.
Non-firm transmission to an alternate delivery point is acceptable. The Company is
also willing to accept power deliveries at Hot Springs, as an alternate delivery point, if
capacity is available and the Company can receive the power at that point, since it is the only
other direct interconnection that the Company has with the NorthWestern Energy
transmission system, even though that point of delivery is located in the state of Montana.
The Company disagrees with Mr. Thompson s testimony, at pages 12-13 of his
testimony, where he appears to suggest that A vista should be responsible to re-direct
transmission from TRC to the alternate point of delivery in the case of either planned or
unplanned outages. TRC has title to the power until it reaches the A vista system and
therefore, as is customary, TRC should be responsible to manage changes to the transmission
path and the scheduling thereof, as well as for the associated costs.
Mr. Thompson also appears to suggest, at page 13 of his testimony, that Avista should
re-market the power to a buyer in Montana when a transmission path may not be available at
the primary delivery point. Again, TRC has title to the power until it reaches the Company
system, and there should be no obligation on Avista s part to "re-market" power that TRC
cannot deliver to A vista s system.
Transmission circumstances may occur when the Burke primary point of delivery is
unavailable and at the same time non-firm transmission may not be available, or the
Company cannot otherwise receive power at the alternate Hot Springs delivery point. Again
it remains TRC's responsibility to make alternative delivery arrangements to reach the Avista
Lafferty, Di
A vista Corporation
system. (The most probable transmission path would be through the Bonneville Power
transmission system.TRC should have sole responsibility for arranging the path
scheduling, and paying all costs associated with power deliveries in those circumstances as
well.
Are transmission and scheduling arrangements simplified by TRC'
proposal to dynamically integrate the TRC project into Avista s control area?
No. In fact, some very complex situations are created by such an arrangement.
While dynamic scheduling may be possible under certain circumstances, the complexities
should be well understood before pursuing that type of approach for such a small project.
The Company has some experience with dynamic scheduling, as it has put in place several
contracts based on dynamic services. Even under such an arrangement, however, TRC must
keep in mind that it still has title to the power until that power reaches the A vista system.
What is meant by dynamic scheduling?
In order to dynamically schedule the TRC project into the Avista control area
A vista would need to receive the instantaneously metered quantity of power flowing from the
TRC substation to the NorthWestern Energy transmission system, adjusted for NorthWestern
transmission losses. The effect of this arrangement is that the instantaneous output of the
project would appear just as any other generator interconnected directly with Avista s own
electric system.
What issues would require further study, and resolution, before dynamic
scheduling could be offered?
Lafferty, Di
A vista Corporation
What follows is a partial list of issues that would require further examination
and resolution as part of the development of a contract that included dynamic path scheduling
of power from TRc.
TRC must have a firm path sufficient to handle the maximum hourly amount
of power that could be generated. Based on a review of current project testing
data, the Company believes that TRC would need to acquire a least a 12 MW
firm path;
TRC must have a real-time scheduler, or agent, available that can be made
aware of when the Burke line goes out of service suddenly. The TRC real-
time scheduler must put in place a new 12 MW path to an alternate point of
delivery and schedule that path in coordination with the A vista real-time
scheduler.The alternate point of delivery could be at Hot Springs, if
available, or at one of the Company s many interconnections with Bonneville.
If the alternate point at Hot Springs is not available, then the real-time
scheduler must buy a 12 MW dynamic path through a another party
transmission system (such as Bonneville s) to reach the Avista system.
What might an alternative be to a dynamic interconnection with the
Avista control area?
The Company believes it would be much simpler for TRC, given the relatively
small size of the project, to remain in the NorthWestern control area. TRC could initiate an
agreement with NorthWestern Energy to act as scheduler for TRC to handle normal and
abnormal transmission situations. NorthWestern Energy could also provide a limited
Lafferty, Di
A vista Corporation
balancing servIce to allow TRC to best optimize its use of transmission.Under this
approach TRC could better optimize its use of transmission because power could be
scheduled in advance. A vista would require that the Company be made a party to the
balancing service contract for tracking and accounting purposes. The Company previously
suggested just such an approach in its August 2005 contract proposal to TRc.
Why has the Company objected to TRC's inclusion of a specific amount
of 4% for transmission losses in the proposed PURPA contract?
TRC Witness Mr. Thompson indicates, at page 12 of his testimony, that TRC
was simply quoting the NorthWestern Energy FERC tariff for the amount of losses on its
transmission system that are required in order to deliver power to the A vista system at Burke
Idaho. However, TRC is responsible to pay for all transmission losses necessary to delivery
power to the Avista electric system. While it is correct that NorthWestern Energy s FERC
transmission tariff currently states that system losses are 4%, NorthWestern could file a new
tariff, including changes in losses, at any time during the proposed 20-year term of a TRC
PURP A contract. If the loss percentage increases, TRC should be obligated by the contract
to pay the full amount. Therefore, a specific amount of losses should not be stated in a long-
term contract where conditions could easily change.
Finally, is the Company satisfied that TRC has no further obligation to
provide power under the 10-year "Cogeneration Power Sale Agreement" to
NorthWestern Energy?
TRC has represented to Avista that both TRC and NorthWestern Energy
believe that the 1 O-year power sale agreement between them terminated on May 13 , 2004.
Lafferty, Di
Avista Corporation
The Company, however, simply would require that as part of the terms of any PURP
agreement, that TRC must represent and warrant that there are no ongoing obligations
pursuant to the Cogeneration Power Sale Agreement between TRC and NorthWestern
Energy.
Does that conclude your pre-flIed direct testimony?
Yes it does.
Lafferty, Di
A vista Corporation
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DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
jriUTiL~t
':,- -
dSSiG:J
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 201
UTILITIES, a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from Thompson River Co-Gen LLC Amended Petition For Acceptance Of
Initial Rate Schedule, Waivers, And Blanket Authority; FERC Docket No. ER02-298-
000; December 10, 2002
(Note: Any handwritten notations or calculations are those of A vista and are for the purpose of ernphasizing
certain items.
FERC-Generated PDF of 20021217-0381 Received b FERC OSEC 12 /13/2002 in Docket#: ER03-270-000
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Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Thompson River Co-Gen, LLC ) Docket No. ER02-298-000
AMENDED PETITION FOR ACCEYfANCE OF INITIAL
RATE SCHEDULE, WAIVERS AND BLANKET AUTHORITY
On November 7, 200 1 , Thompson River Co-Gen. LLC ("'Thompson") submitted to the
Federal Energy Regulatory Commission ("Commission") a petition for acceptance of initial rate
schedule, waivers, blanket authority under Rules 205 and 207 of the Commission s Rules of
Practice and Procedure, and regulations ~ 38.205, ~ 38.207 and ~ 35.12 of the Commission
regulations. Thompson proposed to sell electric energy from its cogeneration to Montana Power
Company ("MPC") at market-based rates. Subsequently, on January 16 2002, the Federal
Energy Regulatory Commission ("Commissionj approved Thompson s Rate Schedule No.
granting Thompson permission to seJl power to MPC at market-based rates.
Several events have tranSpired since the Commission s action approving Thompson
petition, which have prompted the filing of this amended petition. First, on January 31 , 2002
the Montana Public Service Commission ("MPSC'1 approved the sale ofMPC to NonhWestern
Corporation, which subsequently renamed MPC as NorthWestern Energy, LLC ("NWE"
Second, on June 21 , 2002, the MPSC reJected the Thompson-MPC contract which was to be
Page 1 Exhibit No. 201 Page 2 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
used to serve NWE's customers who currently are unable or unwilling to choose an alternative
energy sernces provider. ~ M.A. ~ 69-8-210. However, foHowing the MPSC's rejection
of the Thompson-MPC contract, Thompson and NWE were able, on September 12 2002, to
consummate a new agreement that now appears as Exhibit ")" to Appendix "A~ to this
Agreement. Third, as the Commission knows, its recent ruling in Southern Company ServicC$.
Inc., Docket No. EROO-2998-001 (September 25 2002) rejected Thompson s request for
confidential treatment of the price terms and conditions in the original Thompson-MPC
agreement, thus necessitating the filing of an unredacted agreement. Since the original
Thompson-MPC agreement is now moot in any event, Thompson has submitted the new
Thompson-NWE agreement in its entirety consistent with the Commission s decision in
Southern Company Services
For these reasons, Thompson respectfully petitions the Commission to act promptly to
approve Thompson s amended Petition, accept its amended Rate Schedule, and grant the
requested waivers of certain Commission regulations, consistent with the Commission s actions
with respect to market based rate authorizations generally. In support hereof: Thompson
respectfully states as follows:
SERVICE AND COMMUNICATIONS
All communications and service related to this application should be directed to the
following:
Thompson River Co-Gen LLC
A IT: Barry A Bates
285 -r Ave. W N
KalispeIJ, Mt. 5990
[phone] (phone)
[phone] (fax)
Michael J. Ucla
Doney, Crowley, Bloomquist & Ucla.. P.
PO Box 1185
44 W. 61it Ave., Suite 200
Helena, MT 59624
(406) 443-221 J (phone)
[phone] (tax)
Page 2 Exhibit No. 201 Page 3 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021211-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-210-000
DESCRIPTION OF APPLICANT AND ITS AFFILIATES
Thompso~ a Montana Limited Liability Corporatio~ proposes to own and operate a
~ \~')
megawatt ("MW) wood waste and coaJ fired cogeneration plant in Thompson Falls. Montana.
Thompson has entered into an agreement with NWE whereby Thompson will sell no more than
/~~. ~- --- .. -
13 MW 0 Thompson s output to NWE. NWE, in will resell that electricity to its .
-- .. .. ..
. jf
res. entia! and commercia! customerS. The remaining approximately ~!Je sold at reblil - - _
: \
to a nearby lumber milt, Thompson River Lumber Company.
For the Commission s edificatio~ NWE as MPC's successor is continuing to implement
the transition of its utility nom a traditional vertically integrated utility to a
transmission/distribution entity under Montana $ Electric Restructuring and Customer Choice
Act adopted in 1997. M.A ~~ 69-101 through -702. That law and others impose a
continuing obligation on NWE to provide electric supply to customers that are either unable or
unwilling to pW"Chase an electric supply from the competitive retail market place. E., M.
~ 69-201.1 In Montana, residential and commercial customers do not currently have the
ability to choose their electricity supplier, and thus NWE is obligated to provide a reliable
affordable supply of electricity to those customers.
As part of its default supply obligation, NWE has proposed to purchase power tTom
Thompson. The MPSC will scrutinize this and other JX)wer purchase anaDgements made by
NWE to detennine whether these transactions are just arid reasonable for Montana s consumers.
PIU'tI1en Barry Bates and Lawrence Underwood will manage Thompson s day-to-day
affairs. No other LLC members will have the right to direct, control, or manage Thompson
NWE. as the .. distribution servi ces p rovi dm-. ,. bas it duty to serve these cust omcrs, ere rr eel to as
the "defAult supplyobligatioo." M.A. n 69-8-102(10) and 69-8-201(2).
Page 3 Exhibit No. 201 Page4of5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021211-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-210-000
daily activities. The LLC members are merely passive investors in Thompson. Mr. Bates and
Mr. Underwood have no legal affiliation with any power company or power marketer, nor do
any of Thompson s LLC members. Apart from their interest in Thompson, no members of the
LLC, including the Partners, are in the business of owning generation facilities. Other than the
transactions described herein, the members of the LLC do not otherwise produce or sell
electricity. Nor are any members of the LLC a public utility company or a holding company of
a public utility company.
III.DESCRIPTION OF RATE SCHEDULE AND SERVICES FOR WHICH
MARKET-BASED RATE AUTHORITY IS REQUESTED
A. Sales DreaDacitv and Ener2V
. . ." .
Thompson win sen approximateIY(~O NWE as part ofNWE's default
supply portfolio. The rate in that contract was negotiated in an arms-length transaction between
~_.
Thompson and NWE. This nego~ed rate forms the basis for Thompson Rate Schedule FERC
No.1. Appendix A. As mentioned previously, an unredacted version of the Thompson-
NWE contract is attached hereto as Exhibit "In to Appendix "A'" Thompson has no current
intention to sell at wholesale any electricity in the bulk electricity market. Should it wish to do
so in the future, Thompson will make appropriate application at that time.
Thompson does not currently propose to sell any ancillary services. including operating
reserves, energy imbalance service, reaCtive supply voltage contro~ or regulation or frequency
response service. If Thompson in the future should desire to sell any ancillary services, it will
duly notify the Commission as required by Commission regulations.
Page 4 Exhibit No. 201 Page 5 of5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
~ iJ
" ,
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
UfiLI! IcSJ C
Ci"ii S~;! 0,
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 202
UTILITIES , a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from Co-Generation Power Sale Agreement Between Thompson River Co-Gen
LLC and NorthWestern Energy, LLC; Dated Sept, 12 2002
(Note: Any handwritten notations or calculations are those of A vista and are for the purpose of emphasizing
certain items.
Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
Thompson River aHJen. LL. C.
Rate &:heduJc FHRC No. I
Supcucdc8 PERC EJcctric Original Volume No.
Original Sheet No.
CO-GENERA nON POWER SALE AGREEMENT
B E1WEEN
TIlOMPSON RIVER CO-GEN. LLC
AND
NORTHWESTERN ENERGY. LLC
Pof1IDd3-1408464.1 00 1
Issuing Officer: Micbac11. Uda
Attorney
Issuing Dale: SeplI2. 2002
DRAFT: 1:zIIOI2OO2 3:01 p),l
Eft'c:divc Date: No later than 60 days after filing
Exhibit No. 202 Page 1 of 5
Case No. A VU-O5- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#:ER03-270-000
Thompson River ~ L.L. C.
Rate Sc\Icdule FERC No.
(Supersedes FERC Electric Tariff; 0rigiDaI Volume No.
0rigiDa1 Sbcct No.
Section 1:
Section 2:
Section 3:
Section 4:
Section
Section 6:
Section 7:
Section 8:
Section 9:
Section 10:
Section 11;
Section 12:
Section 13:
Section 14:
Section 15:
Section 16:
TAD LE 0 F CONTENTS
Page
Definitions. .................".... ........... ....................... ............. ..........
.... ........ ... .'."" ...
Term and Termination ........................................................................................
Purchase and Sale of Power ...............
...............................................................
Project Operation ............... ...... .....
.............................. ........... ........... ............ ... .
Pricing....... ...... ......... ......................... ...... ......... .............
....... .... ".""""'.". ........
Project Log ............ ......................... ...... ......................... .............. ....
..... .... ...... ..
Metering. Telemetry and Transmis8ion .............................................................
Billing and Payment...... ...... ........ ......,.......
...................... .... ............... ... ........... .
Notices. ... ...... .......................... .....
... ... ............ ...... .......... .... ....... ... .... .... ....... .... .
Uncontrollable Forces... ........ ...
........ ........... ... .......... "..". ... .... ...... ............ .... .... .
Remedies ......... ......." ... ........... ........... ...
".".""" ............ ........ ... '.."" .... .... ........ ..
Waiver.... ......... .............. ......
.""."""""'" ............ .... ........................ ..."" ........ ...
Arbitration. ...... ........... ......
........ ...... .'. .............. ...... ....... .... ...... ........... ....... ........
Assignment........ ................. .....
... ...... ... ............ ......... ........... ...... ........ .....,........ .
Covenants .......... ......... ........ ... ...........
........................................................ ........
Miscellaneous.... ............ .....
........ .......................... ....... .............. .'."'" ...............
INDEX TO EXHIBITS
Project Description
J'ortInd3.1408464.1 00 19436-00003
Isming Officer: Michael 1. Ucla
Auomcy
Isming Date: Sept. 12, 2002
DRAFT: 12110f.2002 3:01 PM
Effective Date: No laJtr than 60 days after filing
Exhibit No. 202 Page 2 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
'I'OOw~D Rivet ~ LL.
Rate ~n~FERC No. 1
(Supcracdcs PEIlC Electric Tariff. 0rigI.0a1 Volume No.
Qrisina1 Sheet No.
CO-GENERATION POWER SALE AGREEMENT
This Co-generation Electric Power Sale Agreement, dated this 12th day of September, is
between Thompson River Co-geD, LLc. a Montana Limited Liability Company ("SELLER"
and NorthWestern Energy, LLC. a Delaware Limited Liability Company ("BUYER"
).
SELLER
and BUYER are sometimes referred to herein collectively as the "parnes" and individually as
Party.
Section 1: Definitions
As used herein. the following terms have the following mcaningswhen used with initial
capitalization, whether singular or plural:
1.2 Affiliate" means, with respect to any person. any other person (other than an
individual) that, directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such person. For this purpose
, "
control" means
the direct or indirect ownership of 50 percent or more of the outstanding capital stock or other
equity interests having ordinary voting power.
1.3 Ancillary Services" means all ancillary products associated with the generation
of Power including. without limitation, spinning reserves. non-spinning reserves, reactive power
and voltage control.
1.4 Base Power" means. in respect to the Initial Tenn, the first 13 megawatt hours
Power delivered to BUYER in any hour and in respect tD any Extended Term, the first five
megawatt hours of Power delivered to BUYER in any hour.
1.5 Base Rate" means a per annum rate equal to 125 percent of the rate announced
publicly from time to time by Morgan Guaranty Trust Company of New York in New York,
COGENERATION POWER. SALE AOREEMaIT BETWEEN 1HOMPSON RIVER CO-GEN. LLC AND
NOR1HWESlERN ENERGY. LLC
I'or1!Dd3 -140&464.1 00 1 M36-OOOOJ
Issuing Officer: Michael J. Ucla
Attorney
Issuing Date: Sept 12, 2002
DIlAFT: 12/10n002 3:01 PM
PJrective Date: No 1aIt:r than 60 days after filin8Exhibit No. 202 Page 3 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021217-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
1bompeon River Co-(Jeo. L~.
Rate Schcduk: FERC No.
(Supc:rscdcs PERC Electric Tariff, 0rigiDa1 Volume No. I)
Original Sheet No.
c.pacity Entitlement Amount. Except during Scheduled Maintenance Outages
and Forced Outages, SELLER shall operate the Project during each hour at its maximum
generating capability, consistent with Prudent Electric Practice. and deliver all available electric
output, net of station service requirements and Mill Service Requiremcnta to BUYER at the
Point of Delivery. Notwithstanding the foregoing, SELLER shall not be obligated to del~_.
__.__._-,:-~'\-----._----'------~-------_.-"-_. '-...... "
more than egawatt POW to the B
~~_~y ~~.
B~ ~a11 not be -
obligated to parchase mare fPaw.:r during any hour, The Project ohaIl be
deemed unavailable to generate the Capacity Entitlement Amount during any hour when actual
Project generation is less than 8.5 megawatts.
Scheduled Maintenance Outages.Subsequent to the Contract Operation Date
SELLER shall comply with all operating, repair and maintenance standards as are required to
permit the enforcement of all material warranty claims with respect to the Project or any part
thereof. In consultation with BUYER, SELLER shall schedule Scheduled Maintenance Outages
including major overhauls, consistent with, Prudent Electric Practice. Project wamnties and
manufacturers' maintenance recommendations. Except under unusual circumstances, Scheduled
Maintenance Outages shall be scheduled when requested by BUYER. To the extent that Lost
Generation Hours usociated with Scheduled Maintenance are less than the Scheduled
Maintenance Target Amount, they shall constitute Bonus Lost Generation Hours. Lost
Generation Hours in excess of 110 percent ofthc Scheduled Maintenance Target Amount shall
constitute Excess Scheduled Maintenance Hours; provided.however, SELLER shall be allowed
to carry forward up to 120 Bonus Scheduled Maintenance Hours each Year, not to exceed a total
accumulation at the end of any Year of3oo Bonus Scheduled Maintenance Hours, for use in
connection with future Scheduled Maintenance Outages that exceed the Scheduled Maintenance
COOENERA nON POWER SALB AGREEMENT BE1WEEN 1HOMPSON RIVER CQ..GEN, LLC ANDNORTIiWESTERN ENERGY ILC
PonIDcD -140J.46.4.1 00 19436-00003
IIsuing Officer: Michael J. U
Attorney
IJ8uing Date: Sept. 12. 2002
DRAFT: 121101J002 ):()1 PM
Effective Date: No 1aIcr than 60 days after filingExhibit No. 202 Page 4 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Unofficial FERC-Generated PDF of 20021211-0381 Received by FERC OSEC 12/13/2002 in Docket#: ER03-270-000
ThompIoo River Co-Gco, L.L.
Rate Schedule FERC No. 1
(SupcrxdeI FERC EJcctric Tarlff: Origiml Volume No.
Original Sheet No. 18
Target Amount. In addition, ftom time to time, with the consent ofBUYE~ required Scheduled
Maintenance Outages may be shifted among Years with corresponding adjustments made to the
Scheduled Maintenance Outage Target Amount. Excess Scheduled Maintenance Hours that arc
not offset by Bonus Scheduled Maintenance Megawatt Hours, shall constitute Penalty Hours.
Forced OutRics; At such times 88 Forced Outages occur, 8FT.T .HIt shall promptly
determine. in its reasonable judgment, and 80 inform BUYER, whether such Forced Outages
were reasonably attributable to Uncontrollable Forces.
Successful PrQjoot Test.While it is estimated that the Project will be capable of
~~et1~n 12. mega~~~~~~of.~ capability will not be precisely known until
it is constructed. Actual Project generating capability shall be tested during a consecutive five-
day period designated by SELLER prior to the Contract Operation Date ("Test Period").
,,:
RI.T .F.R may schedule as many Test Periods as it chooses prior to the Contract Operation Date.
During any Test Period, the Project shall be operated at its full capability during each hour in
compliance with all laws. rules, regulations, approvals, authorizations, orders or other
requirements of governmental or regulatory agencies or authorities. SELLER may terminate any
such test prior to ita completion and schedule a future Test Period. S~T T RR.shall promptly
notify BUYER as to whether it nominates any completed test as the Successful Project Test.
SELLER does not nominate a Test Period as a successful Project Test, it shall promptly schedule
a future Test Period. Any Project test conducted for purposes of this Subsection shall be
supervised by an independent Registered Professional Engineer reasonably acceptable to
BUYER and the results of any test, nominated by SET J .rot to be the Successful Project Test
shall be certified by such Registered Professional Engineer.
COOENERA nON POWER. SALE AGREEMENr BE1WEEN 1HOMPSON RIVER Co.oEN, u.c AND
NOR1HWESTERN ENERGY, tiC
PortIDcD-1401464.10019436-00003
I ssui.ng Officer: Mi cbacl J. Uda
Attorney
Is&uing Date:: Sept. 12, 200 2
DRAFT: 1211M002 3:01 PM
Etrcctive Date: No later than 60 days after filing
Exhibit No. 202 Page 5 of 5
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
..- .
c. ;; I.1' '. IDAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
;.iTI!j'!ii~i/(;o, J~;Sil;;
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 203
UTILITIES, a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Cover Letter: NorthWestern Energy s Electric Default Supply Tracker Filing; Dated June
, 2002/Filed June 7 , 2004
(Note: Any handwritten notations or calculations are those of Avista and are for the purpose of emphasizing
certain items.
N(~J)rth Western
d/b/a NorthWestern Energy
" ov. I - _IY 0 I
40 East Broadway St.
Butte, MT 59701
Telephone: [phone]
Facsimile: 406-497-2535
www.northwestern.com7rVJ 11 i~J
\! '. ,. . "'
0'
--'" ,, ', '
r-.' r '
- _
:-L,J ,0!=r:v ICE
,.-";, .
jic,r " I.fr'
!;'
,';lu0.,JI\
June 4 , 2004
Ms. Kate Whitney
Administrator
Montana Public Service Commission
1701 Prospect Avenue
PO Box 202601
Helena, MT 59620-2601
RE:NorthWestern Energy s Electric Default Supply Tracker Filing:
1) Electric Supply Deferred Cost Account Balance as of June 30, 2004, and
the projected Electric Cost for the 12-Month period July 1 , 2004 through
June 30, 2005;
2) Continued Request for Authority to Change the Electric Cost Rate
Adjustment from Annual to Monthly;
3) Request for Authority to Recover Costs and Corresponding Lost Revenues
Associated with Demand Side Management (DSM) Programs and Costs
AssoCiated with Tiber Montana Hydro Project and Thompson River Co-gen
LLC; and
4) Request for Authority to include Montana Public Service Commission
(MPSC or Commission) and Montana Consumer Counsel (MCC) fees in the
Electric Default Supply Cost.
Dear Ms. Whitney:
Pursuant to Montana law, the MPSC rules , and the Deferred Accounting Electric
procedure approved by the Commission in Docket No. 02001.10.144 on June 26
2002 , NorthWestern Energy (NWE or Company) hereby transmits its annual
Application for approval of electric rates which:
Reflects rate treatment for the balance in Electric Supply Deferred Costs, for
the 24-month period ending June 30 , 2004; and
Reflects the projected load , supply and related electric costs for the 12-month
tracker period July 1 , 2004 through June 30, 2005 , 'including continued
request for monthly electric adjustments.
Exhibit No, 203 Page 1 of 4
Case No, A VU-OS- 7
R. Lafferty, Avista Corporation
Whitney Letter
June 4 , 2004
Page 2 of 4
The Company purchases wholesale electricity from suppliers and passes the cost
directly to customers without mark-up. Annually, the Company estimates how much it
will cost to purchase electricity for the upcoming annual tracker period. At the same
time , the difference between revenue from the estimated electric cost and the actual
electric cost for the prior tracker period is computed.
NWE continues its efforts to manage actual electric supply costs for default supply
customers. NWE filed its first biennial Electric Default Supply Resource Procurement
Plan in January of 2004 , is in the process of submitting several supply contracts and
proposed DSM activities to the MPSC for approval, and is developing Requests for
Proposals for future procurement activities.
The supply costs in the 2004/2005 projection include the addition of power from two
small independent projects under development within Montana and costs of new
demand side management programs that reduce the default supply re uirements b
533 MWh's during the period. Thompson River Co-gen , LLC is a 16 MW thermal
generation facility located near Thom on FalisL Montan a. Net output rom this facility
. .
is antici~ated to be approximately 12 M TiberKifom ro proJecriSaT51VfW---~
hydro eneration--facTlitiTocatea .. Qximately 90 miles north of Great Falls in
Chester, Montana at an existing dam on the Marias River.. The annual output from
this "run-of-river" hydro facility is estimated to average approximately 4 MW Novemberthrough April only.
NWE has become aware of the possibility that Commercial Energy choice customers
may return to Electric Default Supply. This filing does not reflect the addition of any of
these customers in projected loads. If and when customers actually return to default
supply, NWE will reflect this change in the monthly tracker filings.
NWE is proposing to include MCC and MPSC fees based on electric default supply
revenues. When NWE filed its last general rate case (Docket No. 020'00.113), thecost of service for the MPSC and MCC tax were based on test year 1999
Transmission and Distribution revenue only. The Electric Supply Buy-back Contract
rates did include recovery of the MPSC and MCC fees until their expiration on June
, 2002. Electric Default Supply rates since that time have not included recovery of
the MPSC and MCC fees. NWE has been and will continue to pay these fees based
on total revenue, including supply.
With this filing, NWE continues its Docket No. D2003.77 request for a modification
of the annual electric supply cost adjustment procedure allowing more timely reflection
of electric cost changes in rates by converting from annual to monthly rate changes.
The monthly rate change is based on annual forecasted electric costs using the
current wholesale market price of electricity on a normalized basis for the most recent
12-'month forecast.
Appendix A to this letter presents a summary of the current tariff rates and the
proposed rates in this filing, as well as the resulting dollar and percentage changes.
The projected Electric Supply Cost & Supply Deferred Cost increase for a typical
Exhibit No. 203 Page 2 of 4
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Whitney Letter
June 4, 2004
Page 3 of 4
residential customer using 750 kWh per month will be $.52 per month or $6.24 per
year on the total bill. This results in an overall 1.71 % increase for supply-related costs
only.
The typical bill calculation shows the combined effect of the proposed July 1 , 2004
rate changes for the decreased Competitive Transition Charge for Qualifying Facilities
(CTC-OF), and the increase of the BPA Residential Exchange Credit. The total effect
of the Electric Supply Cost and the Deferred Supply Costs increase along with the
CTC-QF and BPA Credit rate adjustments on the typical residential customer s bill is a
projected increase of $.20 per month or $2.40 per year. The total overall bill increase
is estimated to be .32%. The actual increase will depend on each customer s type
and usage. The typical bill computations are included in Appendix B.
Other documents submitted with this filing are:
1. Application for interim and final approval of hew monthly Electric supply rates;
2. Notice of Filing attached as Appendix C;
3. Notice of Interim Rate Adjustment Request; and
4. Prefiled Testimony and Exhibits of Kevin J. Markovich, Cheryl A. Hansen
William M. Thomas and Mark D. Thompson.
Given that the prior year s filing, Docket No. 2003., has not been finalized due to
bankruptcy proceedings, NWE proposes that the prior filing and this year s filing be
processed simultaneously under a combined procedural schedule.
Three copies of this letter and documents submitted herewith will be delivered to the
Montana Consumer Counsel.
The NWE employee responsible for answering questions concerning this rate change
request or for inquiries to the appropriate members of the Utility Staff is:
Mr. Patrick R. Corcoran
Regulatory Affairs Department
NorthWestern Energy
40 East Broadway
Butte , MT 59701
[phone]
pat. co rcoran(g2 northwestern. com
Exhibit No. 203 Page 3 of 4
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Whitney Letter
June 4 , 2004
Page 4 of 4
Applicant's attorney in this matter is:
Mr. Ross Richardson
Henningsen , Vucurovich & Richardson PC
116 W. Granite
Butte MT 59701
[phone]
rossrichardson(g1qwest. net
Along with Pat Corcoran and Ross Richardson please add Nedra Chase to the official
service list in this docket to receive copies of alI documents. NWE also requests thatall electronic correspondence related to this filing be sent
reg u lato ryaffai rs(g1 northwestern. com.
Ifthere are any questions in this regard, I can be reached at [phone].
Sincerely,
/1
/-?Jtd I( 0~~
Patrick R. Corcoran
Regulatory Affairs
Enclosures
cc: Montana Consumer Counsel
Exhibit No. 203 Page 4 of 4
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
.' " ..
:':O r::; ~) S 1
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
)TiLiiiESjCiJ,;;Ti3 ;iO;i
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 204
UTILITIES, a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from Prefiled Direct Testimony of Mark D. Thompson On Behalf Of
NorthWestern Energy; Filed June 7, 2004
(Note: Any handwritten notations or calculations are those of A vista and are for the purpose of ernphasizing
certain items.
Department of Public Service Regulation
Montana Public Service Commission
Docket No. D2004.2Q.
NorthWestern Energy
PREFILED DIRECT TESTIMONY OF MARK D. THOMPSON
ON BEHALF OF NORTHWESTERN ENERGY
Please state your name and business address.
My name is Mark D. Thompson. My business address is 40 E. Broadway,
Butte MT 59701.
How are you employed, Mr. Thompson?
I am a consultant on energy supply planning and procurement. My primary
eng~gement at the present time Energyis with NorthWestern
(NorthWestern or NWE). Until May 1 , 2004 , I was Executive Director of
Energy Supply with NWE. I received that assignment in June of 200:2. For
approximately six months prior to that, I was a consultant to Northwestern
focused ' on a variety of issues related to the acquisition of The Montana
Power Company (MPC). These were primarily energy supply issues
including mo"nitoring of the initial .electric default supply application to the
Montana Public Service Commission (MPSC or Commission) in Docket No.
02001.10.144.
Exhibit No. 204 Page 1 of7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Please describe your current assignments.
I advise NWE on strategies for securing energy for NorthWestern s natural
gas and electric customers in Montana , South Dakota and Nebraska. While
our South Dakota electric system is vertically integrated with sufficient
owned generation to meet our customers ' annual load requirements , the
balance of our customers' energy supply in the three states is secured
through contracts with third party suppliers.I develop strategies for
optimizing the load resource balance for the default supply, including
integrated energy services such as electric capacity, electric transmission
natural gas transportation and natural gas storage facilities.
Please describe your day-to-day work in more detail.
My energy supply responsibilities are focused on two areas. The first is the
reliable and efficient delivery of the energy commodities. This requires a
thorough understanding of load fluctuations and transportation limitations.
Beyond an understanding of customers' needs and physical utility plant that
serves them , my work in this area is assisted by strong working
relationships with suppliers.Finally, the ability to work with computer
models that simulate resource alternatives to meet our shifting loads
throughout the year, and computerized optimization scheduling systems are
critical skills.
Exhibit No. 204 Page 2 of 7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
projects offer to default supply customers , and their role in the electric
default supply portfolio. The agreements are included as Exhibit _(MDT-
2).
---/ ,
Please describe the Thompson River Co-generation project.
, '
Thompson River Co-gen , LLC is a 16 MW thermal generation facility located
""',""
near Thompson Falls, Montana. Net output from the facility is anticipated to "
-:\-----~._--,-"',...._.- ".. _,,, ." ',-~,. '"""-"'-"----""-"-'--. ;
be approximately(12 MW.)The facility will burn coal , with up to thirty percent -----
of the input energy coming from wood waste from an adjacent lumber mill.
State of the art emission controls are being installed and steam from the
project will be delivered to the lumber mill , permitting retirement of old
inefficient boilers. Construction began in December 2002 and commercial
operation is anticipated for mid-year 2004.
Please explain the how the TR resource will fit into the overall energy
supply portfolio.
TR will be a base-load , fixed price energy resource , such as the QF or other
unit-contingent contracts.This resource is anticipated to provide
approximately 100 000 megawatt hours of energy per year, or less than 1.
percent of the total annual default supply energy requirements.
Please explain the price and term of the TR contract.
The contract with TR is for a term of ten years with a price of $40 per
megawatt hom (MWH), with escalation during the term. Thus ' NWE will
Exhibit No. 204 Page 3 of7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Gl.
assume no fuel risk or operational cost adjustments. The annual anticipated
cost under the TR contract is approximately $4 million, or approximately 2.
percent of the total annual cost incurred to serve the default supply. TR is
compensated on an energy basis only, meaning if the unit does not perform
no payment is required.Additionally, the contract provides for TR to
schedule planned outages with the Buyer and maintain the project under
prudent independent power producer industry-accepted practices.
A number of these beneficial provisions were added as the contract was re-
negotiated in the months following the Commission s orders in Montana
Power Company s original default supply docket.
What is the opportunity for power purchases after the initial ten-year
contract term?
TR and NWE have committed to communicate regarding term extensions at
an economically beneficial price to the Buyer. To date, TR does not have a
long-term coal contract; therefore , it is reluctant to lock in prices until such
costs are known. NorthWestern believes that the delay in fixing a price is to
the benefit of the Buyer and believes a better price will be available , as fuel
costs are known. TR will also maintain the right to bid into any competitive
Request for Proposals (RFP) process issued by NWE.
Explain the economic value of the TR project to the default supply.
Exhibit No. 204 Page 4 of7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
..........
NorthWestern structured an energy-based . contract in order to avoid the
fixed cost expense of capacity payments for base-load units. Many of the
base-load projects proposed , including existing QF contracts, included
capacity payments, which place a certain amount of performance risk on the
Buyer.NWE compared the cost for TR with four larger coal facilities
proposed to NorthWestern in recent RFPs. TR was competitive with all of
these facilities , despite the economies of scale inherent in the larger
facilities. Secondly, TR's price is in-line (within 2.5%) of Northwest Power
and Conservation Council (NWPCC) price estimates for new coal-fired
generation.
Was NorthWestern prudent in entering the TR contract? .
Yes NWE had in hand substantial and virtually contemporaneous price
information from competitive bid processes , and used this information to
guide its negotiations with TR. As previously explained , the TR price closely
tracked the NWPCC price for new coal generation.This "opportunity
purchase" acquisition (i.e., an "opportunity" in the sense that the product
was offered outside the timeframe and context of a planned RFP process)
provided economic benefit to the default supply. This was substantiated by
wholesale market prices available at the time. Due to the substantial price
discovery and small size of the TR project, a separate competitive bid
process was not warranted.In addition , NorthWestern conducted an
independent, third party engineering design review to ensure that the project
Exhibit No. 204 Page 5 of7
Case No. A VU-OS- 7
R. Lafferty, Avista Corporation
was sound. NorthWestern and TR have maintained communication during
the construction of the project and have conducted numerous site visits.
NWE'portfolio modeling demonstrates the value of the resource in the
context of the entire portfolio. The modeling substantiates that the inclusion
of TR provides a benefit by reducing the overall expected cost to the
portfolio.
What other issues were considered during the acquisition review of
this project?
In accord'ance with the Default Supply Procurement Guidelines adopted by
the MPSC , NorthWestern considered the economic and environmental
impacts of this project. The development of the project creates over 125
construction jobs and approximately 14 permanent new jobs. In addition
the efficient steam supply will enhance the economic stability of the adjacent
lumber mill, which employs over 100 persons. The project will also provide
approximately $1 million in new prop~rty tax revenues over the life of the
project.
In addition, the project provides certain environmental benefits. First, the
steam supply from the project will offset steam currently produced by
inefficient auxiliary boilers at the lumber mill , reducing fuel consumption and
emissions. Secondly, the project is designed to efficiently burn wood-waste
Exhibit No. 204 Page 6 of 7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
for up to 30% of the total fuel requirements , reducing the need to burn coal
and providing additional environmental benefits.
Another contract signed at approximately the same time as TR was the
Tiber Montana hydro project. Please describe that project.
Tiber is a 7.5 MW hydro generation facility located approximately 90 miles
north of Great Falls in Chester, Montana (in Liberty County) at an existing
dam on the Marias River. The average annual output from this "run-ot-river
hydro facility is estimated at 4 MW. The Bureau of Reclamation (BaR)
regulates the river stage to meet downstream demands.The project
qualifies as a renewable resource since it is a run-of-river hydro with no
environmental or fishery Issues as a result of the power generation.
Construction began in December 2002 with commercial operation
commencing in June 2004.
Please explain the how the Tiber resource will fit into the overall
energy supply portfolio.
Tiber will be a base-load , fixed price energy resource, such as the QF or
other unit-contingent contracts. To assist with winter load requirements
NorthWestern agreed to a seasonal supply structure in which NWE would
accept energy from the resource during November through December and
January through April each year during the term ot the agreement. During
the other six months ot each calendar year, Tiber will sell the net output to
Exhibit No. 204 Page 7 of7
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
- . ~_
- I
. ';-) j
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
' ,
T \L \T\~::~ CU ;;'ii':)SiO;;
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 205
UTILITIES, a Washington Corporation
ROBERT 1. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from materials distributed by TRC at a meeting at A vista offices on May 12, 2005
(Note: Any handwritten notations or calculations are those of A vista and are for the purpose of emphasizing
certain items.
Thompson River CoGen, LLC
Project Location:
. Thompson River CoGen, LLC
249 Airport Road
Thompson Falls, MT 59873
Contact Information:
Thompson River Co-Gen, LLC *
Attn: Mike Underwood
1610 Wynkoop St, Suite 100
Denver, CO 80202
Phone: [phone]
Thompson River Co-Gen, /LC is a Colorado /LC.
TRC Project Description:
Thompson River Co-Gen ("TRC") is a coal and biomass cogeneration facility located
approximately four miles outside of Thompson Falls, Montana (on Highway 200).
Project commissioned in December 2004.
Permits
FERC compliant.
Air Quality Permit in effect issued by the MT Department of Environmental Quality.
Water Permit
Waster Water Permit
Energy Products
Electricity.
Proposed twenty-year . PURP A electric energy sales agreement to A vista
(Idaho serVice territory) for 87 600 MWHs per year. (10 MW per Hour, firm)
Via fl1TIling, shaping and transmission agreement with NorthWestern.
Surplus energy sold to NorthWestern under twenty-year PPA.
Electric energy sale to Thompson River Lumber under 35-year PP A.
Steam Sales
Extraction steam sale agreement (66MM lbs) to Thompson River Lumber.Fuel Supply
a Long-term, fixed price coal agreement with Roundup Trading International
from the Bull Mountain Mine, located in Eastern Montana, which meet all
permit and unit specifications.
a . Long-term coal transportation agreement with Montana Rail Link, including
dedicated lease cars from Savage Companies, Inc.
Various waste wood supply agreements with Thompson River Lumber and
other suppliers in the area.
IOMW
+ ';I..,YMIA/to.7"1MIA./
13.'J...MW
~~+
Ocl:!.:i"
Exhibit No. 205 Page 1 of 4
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
Exhibit No. 205 Page 2 of 4
Case No. A VU-05- 7
R. Lafferty, Avista Colporation
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C
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
, .. '
fe. i
)TiL flfCS CUi ;;;iSSfn;!
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 206
UTILITIES, a Washington Corporation
ROBERT 1. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from NorthWestern Energy Form 10-K filing with the Securities And Exchange
Commission For The Fiscal Year Ended December 31 2004; Dated July 15, 2005
(Note: Any handwritten notations or calculations are those of Avista and are for the purpose of emphasizing
certain items,
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.c. 20549
Form to-KIA
Amendment No.
(Mark One)
lEI ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission File Number: 0-692
NORTHWESTERN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware . 46-0172280
. (State or other jurisdiction of (I.R.S. Employerincorporation or organization) Identification No.
125 S. Dakota Avenue, Sioux Falls, South Dakota 57104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 605-978-2908
Securities registered pursuant to Section 12(b) of the Act:(Title of each class) (Name of each exchan~e on which re~istered)None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15( d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days. Yes (gJNo 0 .
Indicate by check mark if disclosure of delinquent filers pursuant to Itern 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form lO-K or any arnendment to this
Form 10-(gJ
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes (8) No
As of June 30, 2004, the aggregate market value of the voting comrnon stock held by nonaffi1iates of the
registrant was $753,602 computed using the last sales price of $0.02 per share of the registrant's common stock
on June 30, 2004, the last business day of the registrant's most recently completed second fiscal quarter.
As of March 12 2005, 35 614 158 shares of the registrant s common stock, par value $0.01 per share, were
outstanding.
Indicate by check mark whether the registrant has filed all documents required to be filed by Section 12, 13
or 15( d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes (gJ No
Documents Incorporated by Reference
None Exhibit No. 206 Page 1 of 3
Case No. A VU-OS- 7
R. Lafferty, Avista Corporation
Electricity Supply
Montana
Pursuant to Montana law, we are obligated to provide default supply electric service to those
customers who have not chosen or are unable to choose their electricity supplier. In this role, we purchase
substantially all of the capacity and energy requirements for the default supply from third parties. We
current1y have power purchase agreements with PPL Montana for 300 megawatts of firm base-load and
150 megawatts of unit-contingent on peak energy through June 30 2007. We also purchase power from 13
qualifying facility" contracts that The Montana Power Company was required to enter into under the
Public Utility Regulatory Policies Act of 1978, which provide a total of 101 megawatts of winter eak
capacity. We have secured additional contracts from Thompson River Co-gen, LLC for up to 4 megawatts
of base-load coal/waste-coal supply and Tiber Montana for 5 megawatts of seasonal base10ad hy ro supp y.
These purchases account for approximately 72% of our customer load requirements on average. The
remaining customer load requirements are met with market purchases. In January 2004, we submitted an
Electric Default Supply Resource Procurement Plan to the MPSC, which fully details the resource
requirements, analysis and identified resources to best meet current and future default supply load
requirements, while mitigating market price risk. These contracted and proposed resources include
conservation, baseload, gas fired dispatchable, wind and the post 2007 base10ad resources. In addition, we
have entered into short-term fIXed price energy purchases to fulfill the default obligation and provide rate
stability. For more information about our obligations as a result of deregulation in Montana during the
statutory transition period, see "Utility Regulation-Montana.
The MPSC approved base-load supply, along with open market purchases, are being recovered
through a monthly electricity cost tracking process pursuant to which rates are based on estimated
electricity loads and electricity costs for the upcoming twelve month period and are reviewed and adjusted
by the MPSC for any differences in the previous tracking year s estirnates to actual information. This
process is sirni1ar in many respects to the cost recovery process that has been utilized in Montana, South
Dakota and other states for natural gas purchases for residential and commercial customers. The MPSC
reviews our ongoing responsibility to prudently administer our supply contracts and the energy procured
pursuant to those contracts for the benefit of ratepayers.
Consistent with the Resource Procurement Plan, in July 2004, we issued a Montana electric default
supply request for proposal (RFP) for baseload, dispatchab1e, wind and other electric supply resources.
Several resources were selected for contract negotiation and a nurnber of these contracts were presented to
the MPSC for advanced approval in a filing made on February 7 2005. Our Co1strip Unit 4 division
submitted an offer in the RFP to supply a certain amount of energy to the default supply. After being
short-listed, the Colstrip Unit 4 Division and the default supply group commenced discussions regarding
the ultimate terms of the supply arrangement. As a result of these discussions, the Co1strip Unit 4 Division
agreed to offer the default supply 90 megawatts of unit contingent, base10ad energy for a term of n.5
years, commencing on July 1, 2007, at an average price of $35.80 per megawatt hour. Further procurement
activities will coI1tinue, focusing on replacement of significant baseload contracts that expire in June 2007.
In addition to our Colstrip Unit 4 division, our affiliate, Montana Megawatts I, LLC (MMI), the
owner of a partially constructed, 260 megawatt, natural gas-fired, combined-cycle electric generation
facility, submitted numerous bids in response to the dispatchable component of the RFP. In
November 2004, the default supply group notified MMI that one of its bids had been placed on the short
list of offered products. After further discussions between MMI and the default supply group, MMI agreed
to supply the default supply with approximately 240 megawatts of capacity from its Great Falls location for
a term of 20 years (commencing no earlier than January 2007) at an all in cost per megawatt that was lower
than the short-listed price. This resource is being processed in accordance with the affiliate transaction
rules established by the MPSc. Upon completion of the affiliate transaction review, final acceptance by the
default supply group, and approval of our internal energy supply board we will amend our February 7,2005
-;:-
Exhibit No. 206 Page 2 of 3
Case No- A VU-05- 7
R. Lafferty, Avista Co'1JOration
Exhibit 32.
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of NorthWestern Corporation (the "Cornpany ) on
Form 10-KlA for the fiscal year ended December 31 , 2004, a!J filed with the Securities and Exchange
Commission on the date hereof (the "Report ), I, Brian B. Bird, Chief Financial Officer of the Company,
certify, pursuant to 18 U.c. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that to my knowledge:
1) The Report fully complies with the requirements of Sections 13(a) or 15 (d) of the Securities
Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all rnateria1 respects, the financial
condition and results of operations of the Company.
Date: July 15, 2005 /s/ BRIAN B. BIRD
Brian B. Bird
Chief Financial Officer
Exhibit No. 206 Page 3 of 3
Case No. AVU-05-
R. Lafferty, Avista Corporation
" "
U .-,,
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
, ;"
rrjUTjL~3 C: ;i::~;SIO;;
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 207
UTILITIES, a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Excerpts from Montana Air Quality Permit Application For Stationary Sources; filed by
NorthWestern Energy on November 15 2005
(Note: Any handwritten notations or calculations are those of A vista and are for the purpose of ernphasizing
certain items.
f' Department ofs='~ :gn vironmen:taI QtJaJIty 'N"
~,.."""
"""M'
_.._'...'
Air and Waste Management Bureau. O. Box 200901 . Helena MT 59620-0901 . (406) 444-34.90
MONTANA AIR QUALITY PERMIT APPLICATION FOR STATIONARY SOURCES
For State of Montana Use Onl
Permit Application Number .-
Application Fee Paid with Application?
Yes 0 No Amount Paid
Montana Department of Environmental Quality
Air and Waste Management Bureau
Permitting Section Supervisor
1520 E. Sixth Avenue
O. Box 200901
Heleria , MT 59620-0901
Phone: ~06) 444-3490 AREV Facility #FP 10 #FPJ( [phone]
Four complete copies of the application, any associated fees, and the affidavit
of publication of the attached public notice must be mailed' to' the above
address. Instructions for filling out this form a!e contained in the Instructions
and Suggested Format document available from the Department of
Environmental Quality (department). Some information requested in this
application may not be applicable to all facilities. Please contact the Air and
Waste Management Bureau if you have any questions.' A final permit will be
issued within 76 days of the department's receipt of a complete application
barring any appeals to the Board of Environmental Review (Board).
FACILITY NAME AND ADDRESS
1--Thompson River Co-Gen, LLC
Facility Name
8 1 5t Street East
MaDing Address
Kalispell 59901
Citv Slate lia
,:!::,.
PERMIT TYPE
f2J Air Quality Preconstruction Permit
f2J
New Facility
Alteration to Existing Permit # 3175-
Permit Number
Synthetic Minor (major source using federally enforceable permit conditions to avoid MACT, PSD
NSR, or Title V Operating Permit requirements)
A permit application fee and an affidavit of publication must be submitted to DEQ at the above
address (for air quality preconstruction permit applications only)
f2J
Affidavit of Publication of Public Notice
Permit Application Fee
Air Quality Operating Permit
f2J
Attached
Attached
Initial Air Quality Operating Permit - - New Construction
Initial Air Quality Operating Permit - - Existing Source
Renewal of Air Quality Operating Permit
Modification of Air Quality Operating Permit
Name of DEQ Contact Eric Merchant
f2J Forthcoming
Forthcoming
If yau have been dealing with Department af Environmentat Quailly personnel
7710 estimaled limo 101 tho department to procoss and ael 011 a COlrectly completed application 101m Is 60 days. 7710 department has 30 days 10 natily an applicant /hat theit applk:atian is incomplete, n... dopanmon' "'aa make a
plelimina", de'olminat/OII within 40 days aher IOCOiYing comole'e and HIed aoaliealian. A departmant deci:;ian mu" !Ie made w/lhin 60 days alt8llOceiving camoleto aooliealion.Tho depanment decision is no' final unlo.. 15 days
have elapsed 110m Ino dote aI the department decisiOll anet Ihola is no loquo., lar a hearing /Jalare tho Board all:Iw;'OIImonlai Rovh!w. (Cilletent ,imo ltames apply ff an Envi/anmontallmpa" Sta,emon' is ""'Uired 01 illno Major
Facility Siring Ael is appllcatJIo. PlOvisians also axisOn rule lar extending tho time lari..uing a depanmant decision/. PleasolOlotta ARM 17.706(2), ARM 17.7/0 and 75-Z./11 MCA.
USI Updated: Novembo/l'. ZOOS G:lPlOjeoulThampsan River Ca-gen TCGITCGZOS830 BACT Madlfic:atianlAppticadanlApperdix A. MTCEQ App Forms.dacPage 1 of 15 Exhibit No. 207 Page 1 of2
Case No. A VU-05- 7
R. Lafferty, Avista Colporation
Manlan. A~ Quaiii'( P8ITT1il AppUceDan far SLatlanary SaUleO.
Stack Un ing (check one)rzJ Metal Refractory Other (specify)
Process Information (/ndicate Units)
Combusts coal and/or wood waste biomass to produce steam and
: ~~;a
:: ~~::~~: ~~~::e
::~":~:~L 0~- -
- -- ---:--
Maxlm~m Rated D ~~lgn Capacity
. ~
~5 Megawat:~~~r ,
--_
__n
_- . .~~=-
Approximate Quantities Produced (If soarce-is-temporary) N/A
Fuel/Combustion Information
Fuel Type Coal and/or woodwaste biomass Heat Content (Btu rating) 000 to 12 500
192.Less than 250
Average Fuel Combustion Rate MMBtu/hr Maximum Rated Design Capacity MMBtu/hr
Sulfur Content (%) ;S; 1 %Ash Content (%) Will vE:;L with the fuel.
Draft Type (check one) 0 Forced rzJ Induced Natural 0 Combination None
Draft Control (check one) Barometer Sliding Door Butterfly 0 Guillotine
Other (specify)
Draft Control Location Up Pass Breeching
Other (specify) Unknown
Five Connector
Percent Annual Thruput (Percent of the applicant's work done in each time frame. The percentages entered
for the four time frames must add up to 100%.
",..,"~.::~:;.
December - February
March - May
June - August
September - November
Monlana Air Quality Pennil Aponca.on lor Sla.onary Soun:es Las! Updated: November 14. 2005 G:\?nJjectSIThompson River Co-Qen TCG\TCG205630 BACT ModiftcationlApplicanonlAppendix A . MTDEQ App Fenno.docPage 8 of 15 Exhibit No. 207 Page 2 of2
Case No. A VU-05- 7
R. Lafferty, Avista Corporation
, ,:, ,) "';:; ,,; '
; ;;2
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
JTiL.!T!C~'.: ;
- :
::;3 I
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05-
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 208
UTILITIES , a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
TRC Response To Avista Production Request No. 41
REQUEST FOR PRODUCTION NO: : Please explain ifthe capacity limit under
the transmission agreement for firm power ITom response to Production Request No. 39 above, is .
sufficient to provide for the delivery of dynamically delivered Project power to Avista on a firm
basis during all hours. In your explanation, please explain how the full dynamic range of power
deliveries will be accommodated under the firm tra.'1smission agreements in place between
NorthWestern and Thompson River Co-Gen.
RESPONSE : As an industry standard associated with any combined cycle, cogeneration
facility, the Project will vary in its actual delivery on an hourly basis based on fuel moisture
content, ambient weather conditions, steam host requirements, and scheduled and non-scheduled
outages. The estimated range of delivery on an hourly basis is between 8.5 MW and 11.5 MW
but in no case will the Project deliver power to Avista in excess of 10 average megawatts per
month. This answer was prepared by Mr. Underwood, Mr. Thompson and Mr. Uda.
Respectfully submitted this 6th day of January, 2006
TRC'S RESPONSES TO AVISTA'S SECOND PRODUCTION REQUESTS
Exhibit No. 208 Page 1 of 1
Case No. AVU-05-
R. Lafferty, Avista COIporation
DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL FOR REGULATORY
AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
" - "'
- i,
", ," .
. i) i.I 9:
jT!LiFi~~:iJi"
- '
SIOil
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
THOMPSON RIVER CO-GEN, LLC
a Colorado Company,CASE NO. A VU-05- 7
COMPLAINANT
vs.
A VISTA CORPORATION dba A VISTA EXHIBIT NO. 209
UTILITIES, a Washington Corporation
ROBERT J. LAFFERTY
RESPONDENT.
FOR A VISTA CORPORATION
Transmission One-Line Diagram Illustrating Path From TRC to Avista s System
Transmission One-Line Diagram Illustrating Path
From TRC to Avista s System
IDAHO MONTANA
WASHINGTON
Noxon Rapids Dam .
+--
Avlsta'Thompson ,River Cogen NorthwesternBlJtke Transmission
Substation
Hot Springs
SubstationSpokaneAvista Tram.rni$s~ .
Av1sta Transmission
Missoula
- - - -
Northwestern Transmission
Exhibit No. 209 Page I of 1
Case No. A VU-05- 7
R. Lafferty, Avista Corporation