20060901Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:SEPTEMBER 1 2006
SUBJECT:CASE NO. A VU-05-7 (Avista)
POWER PURCHASE AND SALE AGREEMENT - THOMPSON RIVER
CO-GEN LLC
On August 31 , 2006, Avista Corporation dba Avista Utilities (Avista; Company) and
Thompson River Co-Gen, LLC (TRC) filed a Joint Petition in Case No. A VU-05- 7 requesting
approval of a 20-year Power Purchase and Sale Agreement dated August 25, 2006.
TRC is a Montana corporation that operates a thermal wood waste/coal generation
facility power plant located at Thompson Falls, Montana. The TRC facility is capable of
generating up to approximately 13 MW of energy and is a qualifying facility (QF) pursuant to
the Public Utility Regulatory Policies Act of 1978 (PURP A). A vista will be the sole purchaser
ofTRC's generation.
For all net delivered output received by Avista that is not Surplus Energy, Avista
shall pay $58.50 per MW hour. For all Surplus Energy, Avista shall pay the current month'
market energy cost per MW hour or the net delivery output purchase price, whichever is lower.
The power purchase rates are negotiated as a reasonable compromise to resolve their dispute and
do not represent a levelized rate calculated from published avoided cost rates.
COMMISSION DECISION
Tendered for Commission approval is a Power Purchase Agreement between A vista
and TRC. The contract parties recommend that the matter be processed pursuant to Modified
Procedure, i., by written submission rather than by hearing. Reference Commission Rules of
DECISION MEMORANDUM
Procedure, IDAPA 31.01.01.201-204.Commission Staff concurs in the recommended
procedure. Does the Commission agree that Modified Procedure is appropriate?
Scott Woodbury
bls/M:A VU-O5-07 sw
DECISION MEMORANDUM