20060427Application.pdf

Avista Corp.
1411 East Mission PO Box 3727
Spokane. Washington, 99220-3727
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April 26, 2006
Jean Jewell
Secretary
Idaho Public Utilities Commission
Statehouse
Boise, ID 83720
Re:Application for Authorization to Defer the Cost of a Loan Related to Grid West
Dear Ms. Jewell:
Enclosed for filing with the Commission are an original and seven copies of the Application of
A vista Corporation for Authorization to Defer the Cost of a Loan Related to Grid West. Also
enclosed is a Certificate of Service.
Please direct any questions regarding this filing to Bruce Folsom at [phone].
Sincerely,
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Kelly Norwood
Vice President, State and Federal Regulation
Enclosures
DAVID J. MEYER
VICE-PRESIDENT, CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORP
1411 E. MISSION AVE., MSC-
O. BOX 3727
SPOKANE, W A 99220-3727
[phone]
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION)
OF AVISTA CORPORATION FOR
AUTHORIZATION TO DEFER THE COST)
OF A LOAN RELATED TO GRID WEST
CASE NO. A VU-O6-
APPLICATION OF
VISTA CORPORATION
Avista Corporation (Avista or the Company) hereby requests that the Idaho Public
Utilities Commission (Commission) authorize deferred accounting treatment for loan amounts
as described herein , made to Grid West, a proposed regional transmission organization (RTO),
for purposes of funding development efforts. On April 11 , 2006 the Grid West Board of
Directors voted to request a Plan for Dissolution of Grid West. A vista is requesting deferred
accounting treatment for its loan amounts to Grid West, for the opportunity for later recovery
in rates.
Procedural Information
The name of the Applicant is the A vista Corporation, a Washington corporation, whose
principal business office is 1411 East Mission Avenue, Spokane, Washington. The Applicant is
an investor-owned utility engaged in the generation, transmission, and distribution of electricity
in certain portions of eastern Washington and in northern Idaho. The Applicant also provides
natural gas distribution service in certain portions of eastern Washington, northern Idaho, and
Oregon.
APPLICATION OF A VISTA
The Applicant is subject to the jurisdiction of the Idaho Public Utilities Commission, the
Washington Utilities and Transportation Commission, the Montana Public Service Commission
the Oregon Public Utility Commission, and the Federal Energy Regulatory Commission.
Communications in reference to this Application should be addressed to:
Kelly Norwood
Vice-President, State
and Federal Regulation
A vista Corp
1411 E. Mission Ave., MSC-
O. Box 3727
Spokane, W A 99220-3727
kell y .norwood~avistacorp. com
David J. Meyer
Vice-President, Chief Counsel for
Regulatory and Governmental Affairs
A vista Corp.
1411 E. Mission Ave., MSC-
O. Box 3727
Spokane, W A 99220-3727
d avid .meyer(?Da vistacorp. com
II.Introduction
Avista has been actively involved in the development of a Pacific Northwest RTO.
This activity has been aimed at meeting the policies of the Federal Energy Regulatory
Commission (FER C) promoting competitive electric markets. More specifically, FERC Order
888 encouraged the development of independent system operators , and FERC Order 2000
required transmission owners to develop and submit a proposal to establish an RTO , or to
explain why such an organization could not be developed. Therefore, this effort and associated
costs were essential in the ongoing ownership, development and operation of Avista
transmission system.
Avista signed an initial funding agreement in 2000 , as did all other Pacific Northwest
investor-owned electric utilities, to provide funding for the start-up phase of Grid West (then
named "RTO West"). These start up costs included retaining experts and facilitators , as well
as other expenses associated with transmission studies and stakeholder participation.The
current balance of Avista s loan to Grid West is $1 217 499.26, including interest of
$188 187.34. Grid West planned to repay the loans through surcharges to customers once it
APPLICATION OF A VISTA
became operational. With the recent request for development of a Plan of Dissolution for Grid
West, this repayment will not occur. As a result, Avista proposes to defer these costs, with
the opportunity for later recovery in retail rates. Avista s loan to Grid West has been recorded
in Account 128 - Other Special Funds , and none of the loan amount is presently included in
Avista s rates.Other costs incurred by A vista to support Grid West, such as employee
salaries , employee travel , and legal expenses , were expensed as incurred and are not included
in this request.
The Company continues to work with other regional parties in the pursuit of
improvements to ways in which the region s transmission providers operate and manage the
region s transmission system. On April 10, 2006 , Avista joined ColumbiaGrid as one of its
six founding members.! ColumbiaGrid intends to draw upon elements developed in both the
Grid West and Transmission Improvements Group processes to provide transmission-related
coordination and administrative services as soon as possible. Because the ColumbiaGrid effort
will be using many of the concepts and technical work that began under Grid West, the
Company and the region will benefit from the prior work of Grid West.
III.Deferred Accountin2 Request
Pursuant to Idaho Code g61-524, Avista proposes to defer the Grid West loan amount for
later recovery in rates. A vista estimates that the total amount of the deferred account would be
approximately $421 620 , Idaho s portion of Avista s $1 217 499 loan amount, based on the
Incorporated as a non-profit organization, the founding members, in addition to A vista, include Puget
Sound Energy, Seattle City Light, Grant County Public Utility District, Chelan County Public Utility District, and
the Bonneville Power Administration.
APPLICATION OF A VISTA
current electric allocation of 34.63%?A vista proposes to account for these costs in the
following manner: Amounts currently recorded as a loan to Grid West will be transferred from
Account 128 , Other Special Funds, to Account 182., Other Regulatory Assets. Avista will
cease accrual of interest on the balance as of March 31 , 2006. Attachment 1 shows actual loan
amounts to Grid West and the calculation of interest on the loan balance.
A vista does not request a determination of ratemaking treatment of the Grid West loan
costs at this time , and instead proposes to address recovery of these costs in a future
proceeding.
WHEREFORE, Avista respectfully requests that, in accordance with Idaho Code g61-
502, the Commission issue an order authorizing the proposed deferred accounting treatment of
the A vista Grid West loan amounts as described in this Application. A vista further requests that
this matter be processed under Modified Procedure, in accordance with Rule 201 et. seQ
Respectfully submitted this ). b +-kday of April 2006.
'7~
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Kelly orwood
Vice-President, State and Federal
Regulation
If there are any partial refunds of unused funds, the deferral account will be adjusted accordingly. The
interest portion of this amount is an estimate that is expected to be fmalized by June l , 2006.
APPLICATION OF A VISTA
ATTACHMENT
System Actuals - RTO West/Grid West Funding Agreement
DATE AMOUNT VOUCHER #VENDOR #YEAR VENDOR INVOICE #
05-31-2000 77,400.589615 868523 2000 RTO West 2002
08-31-2000 350.616636 868523 2000 RTO West 2009
10-31-2000 27,090.629498 868523 2000 RTO West 2017
11-30-2000 350.637902 868523 2000 RTO West 2025
12-31-2000 610.652287 868523 2000 RTO West 2033
01-31-2001 700.658564 868523 2001 RTO West 2041
03-31-2001 700.673753 868523 2001 RTO West 2049
06-30-2001 15,480.698995 868523 2001 RTO West 2057
09-30-2001 610.729660 868523 2001 RTO West 2065
11-30-2001 33,610.748273 868523 2001 RTO West 2083
11-30-2001 610.742148 868523 2001 RTO West 2074
12-31-2001 608.753348 868523 2001 RTO West 2092
04-30-2002 610.769743 868523 2002 RTO West 2101
06-30-2002 075.782354 868523 2002 RTO West 2110
09-30-2002 012.800877 868523 2002 RTO West 2118
12-31-2002 012.818981 868523 2002 RTO West 2127
04-30-2003 012.840588 868523 2003 RTO West 2136
08-31-2003 012.865810 868523 2003 RTO West 2145
10-30-2003 012.879176 868523 2003 RTO West 2155
04-30-2004 012.922265 868523 2004 RTO West 2167
11-30-2004 004.969298 868523 2004 RTO West 2181
02-28-2005 004.9445 7179 2005 Grid West 2197
03-31-2005 005.15773 7179 2005 Grid West 2205
05-30-2005 006.28072 7179 2005 Grid West 2219
06-30-2005 006.36822 7179 2005 Grid West 2247
09-30-2005 006.57591 7179 2005 Grid West 2257
01-31-2006 147.89750 7179 2006 Grid West 2271
03-31-2006 258.98480 7179 2006 Grid West 2296
029,311.92 Total
Loan Amounts Interest
2000 154 800.
2001 227 318.783.
2002 164 709.25,076.
2003 126 036.106.
2004 016.114.
2005 210 027.56,814.
2006 62,405.20,292.
029 311.188 187.217,499.
Deferred Acctg Pet, Grid West Funding monthly 2006.xls
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista Corporation s filing related to the
submission of the Application of Avista Corporation for Authorization to Defer the
Cost of a Loan Related to Grid West , by mailing a copy via overnight mail
thereof, postage prepaid to the following:
Ms Jean D Jewell , Secretary
Idaho Public Utilities Commission
PO Box 83702
West 472 Washington
Boise , ID 83720-5983
Ralph Davisson
Potlatch Corporation
601 W. Riverside Ave.
Suite 1100
Spokane, W A 99201
(Workpapers Not Included)
Conley E. Ward
Givens Pursley LLP
601 W. Bannock St.
Boise , ID 83701-2720
Dated at Spokane, Washington this 26th day of April 2006.
patlU?e
Rates Coordinator