20140815Application.pdf

AvistaCorp. iifiCrli'i
":1411 East Mission P.O. Box3727
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ee220-0500 ?CIltr AUG 15 AH 9: 13
TollFree 800-727-9170
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August 14,2014
Jean D. Jewell, Secretary
Idatro Public Utilities Commission
W . 472 Washington Street
Boise,Idaho 83720
Dear Ms. Jewell:
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Corp.
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Avista Utilities submits for approval by the Commission the original and seven copies of its
"Application of Avista Corporation to Approve Electric Distribution Service Agreement with
East Greenacres Irrigation District."
Please direct any questions on this matter to Patrick Ehrbar at [phone].
Sincerely
f,/-'
oa{ial. Meyer
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
enclosure
1 DAVID J. MEYER2 VICE PRESIDENT AND CHIEF COUNSEL FOR
3 REGULATORY AND GOVERNMENTAL AFFAIRS
4 AVISTA CORPORATION5 P.O.BOX37276 14I I EAST MISSION AVENUE
7 SPOKANE, WASHINGTON 99220.3727
8 TELEPHONE: [phone], FAX: [phone] [e-mail]
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t213 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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15 Ftt6 rN THE MATTER OF THE APPLTCATTON ) CASE NO. AVU-E-I4-O617 oF AVTSTA CORPORATION TO APPROVE ) APPLICATION OF18 ELECTRIC DISTzuBUTION SERVICE ) AVISTA19 AGREEMENT WITH EAST GREENACRES )20 IRRIGATION DISTRICT )
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2223 I.INTRODUCTION
24 Avista Corporation doing business as Avista Utilities ("Avista" or "Company"), at
25 l41l East Mission Avenue, Spokane, Washington, respectfully requests that the Commission
26 approve the Electric Distribution Service Asreement, provided here as Attachment A, with
27 East Greenacres Irrigation District ("East Greenacres"), sometimes hereinafter referred to
28 individually, as a "Party", and collectively, as the "Parties".
29 The Parties have entered into an Agreement to continue the delivery of United States
30 Bureau of Reclamation ("Bureau" or "Bureau of Reclamation") energy over Avista-owned
3l and operated distribution facilities from Avista's Post Falls Substation to the East Greenacres
32 delivery points. The Agreement is to become effective October l, 2014, or the first day
33 following approval of the Commission.
Application of Avista Corporation
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The service provided under the Agreement is unique, and therefore more
appropriately provided under a special contract rather than a filed tariff. Further, the contract
is non-discriminatory and is not unreasonably preferential. The distribution charge included
in the Agreement is consistent with distribution charges embedded in current Idaho retail
rates. The incremental costs associated with providing service under the Agreement are less
than the charge for service, therefore, the revenue received from the Agreement provides a
contribution to Avista's fixed costs.
The Company requests that this filing be processed under the Commission's Modified
Procedure rules.
Communications in reference to this Application should be addressed to:
David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Corporation
P.O.Box3727
141I E. Mission Avenue, MSC-13
Spokane, WA 99220-3727
Phone: [phone]
[e-mail]
Patrick D. Ehrbar
Manager, Rates & Tariffs
Avista Corporation
P.O.Box3727
14l I E. Mission Avenue, MSC-29
Spokane, WA 99220-3727
Phone: [phone]
[e-mail]
II. BACKGROTJND
East Greenacres operates two pumping facilities located on the Rathdrum Prairie to
provide irrigation and domestic water supply to approximately 5,300 acres of land. East
Greenacres has been operating and maintaining these Bureau of Reclamation-built facilities
since December 31, 1976. East Greenacres receives electric power to operate these facilities
from the Bureau of Reclamation.
The electric power is delivered through Avista transmission and distribution facilities
to East Greenacres' delivery points. Since March 1,2009, this service has been separated
Application of Avista Corporation
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into two service agreements, one for transmission and one for distribution, in order to
separate the provision of transmission and distribution service under their respective
jurisdictions - open access transmission service under the Federal Energy Regulatory
Commission ("FERC") and transfer service over distribution facilities pursuant to applicable
requirements in the State of Idaho. Avista historically provided this service to East
Greenacres under an agreement on file with FERC since May 27,1975.
The special contract filed herein provides for distribution service from Avista's Post
Falls Substation over 13.2kV feeders to East Greenacres' two pumping stations. Avista has
annually delivered approximately 3.8 million kilowatt-hours to East Greenacres pumping
facilities in recent years. The annual charge for distribution service under the existing
agreement is$.3,622.77 per month, or $43,473.24 per year. This charge was approved by the
Commission in Order No. 30784 in Case No. AVU-E-09-02.
III. TERMS OF AGREEMENT
The Agreement, included as Attachment A, was executed on August 6,2014 and
becomes effective following approval by the Commission. The term of the Agreement
coincides with the term of the Transmission Agreement, but may continue beyond the
expiration of the Transmission Agreement if East Greenacres continues to purchase
transmission service and additional time is needed to develop a follow-on distribution service
agreement. This provision ensures that there will be no gap in the Company's ability to
charge East Greenacres for distribution service.
The charge for distribution service under the new Agreement is $4,231.74 per month,
or $50,780.88 per year. The distribution charge is based on East Greenacres' peak demand-
ratio share of Distribution Facilities Costs derived from Avista's last cost of service study
Application of Avista Corporation
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filed with the Commission in Case No. AVU-E-12-08 updated for the settlement adjustments
and revenue increase approved by Order No. 327691. The calculation of the monthly
distribution service fee is included in Exhibit 3 of Attachment A.
The Company does not have a tariff in place for customers who take service in a
manner similar to East Greenacres. In fact, East Greenacres is the only customer in Avista's
Idaho service territory who receive their power requirements from the Bureau of
Reclamation. Because the service characteristics are unique, and the distribution charge is
based on Commission-supported demand-based methodology, Avista believes that the
contract is not unreasonably preferential.
IV. REQUEST F',OR APPROVAL
Avista, therefore, respectfully requests approval of the "Electric Distribution Service
Agreement" so that East Greenacres Irrigation District may receive Bureau of Reclamation
power at charges consistent with the distribution costs embedded in Idaho retail rates. The
incremental costs associated with providing service under the Agreement are less than the
charge for service, therefore, the revenue received from the Agreement provides a
contribution to Avista's fixed costs. The service provided under the Agreement is unique,
and therefore more appropriately provided under a special contract rather than a filed tariff.
Further, the contract is non-discriminatory and is not unreasonably preferential. Avista
I In the last agreement between Avista and East Greenacres (AW-E-09-02),the agreed-upon monthly rate was
derived using a jurisdictional energy methodology (load ratio share) versus a demand methodology. Idaho
Commission Staffstated in their comments that they believe that "allocation of distribution facilities used by the
irrigation district based on demand is more appropriate" because "the cost of distribution facilities is driven by
demand rather than energy."
The Commission in its final OrderNo.30784 stated "We acknowledge Staffs assessment of Avista's energy-
based methodology as well as its efforts to develop a more appropriate demand-based methodology for use in
futwe electric distribution service agreements. Thus, we strongly encourage the Company to offer its full
cooperation toward the development of this alternate methodology". Therefore in the new agreement, the
monthly rate is based on a demand methodology.
Application of Avista Corporation
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believes that the Agreement is in the best interest of the Customer, the Company, and Idaho
retail ratepayers.
fADATED at Spokane, Washington, this 14 day of August, 2014.
AVISTA CORPORATION
By
David J. Meyer
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Application of Avista Corporation
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VERIFICATION
STATE OF WASHINGTON
County ofSpokane
David J. Meyer, being first duly swom on oath, deposes and says: That he is the Vice
President and Chief Counsel for Regulatory and Governmental Affairs for Avista
Corporation and makes this verification for and on behalf of said corporation, being thereto
duly authoized;
That he has read the foregoing filing, knows the contents thereof, and believes the
same to be true.
SIGNED AND SWORN to before me this l4th day of August 2014, by David J. Meyer.
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NOT LIC\n and for
Application of Avista Corporation
Contract No. AV-TRI4-0337
ELECTRIC DISTRIBUTION
SERVICE AGREEMENT
THIS ELECTRIC DISTRIBUTION SERVICE AGREEMENT ("Agreement"), dated as of
August bn ,2014, is entered into by and between Avista Corporation ("Avista') and East Greenacres
Irrigation District ("East Greenacres"), hereinafter sometimes referred to individually as a "Part5/" and
collectively as the "Parties."
WITIIIESSETH:
WHEREAS, among other facilities, East Greenacres operates two pumping facilities located on the
Rathdrum Prairie, (hereinafter collectively referred to as the "East Greenacres Unit"). Irrigation and
domestic water for the East Greenacres Unit is furnished by ground water from wells ranging from 230 to
330 feet deep. The multipurpose pipeline system used by the East Greenacres Unit was constructed by
the United States of Americ4 Bureau of Reclamation ("Bureau") for year-round use. It was built to
provide inigation service to approximately 5,300 acres of land. Operation and maintenance of the East
Greenacres Unit was assumed by East Grcenacres on December 31, 1976; and
WIIEREAS, pursuant to a separate arrangement between the Bonneville Power Administration
("Bonneville") and East Greenacrcs, Bonneville transmits and delivers the Bureau's enerry to
Bonneville's Bell Substation in Spokane, Washington;and
WIIEREAS, Avista and the Bureau were parties to a Contract for Transmission Service dated May
27, 1975 (Avista FERC Rate Schedule No. 62; USBR Contract No. lul-06-100-8331) which was
terminated on May l, 2009, and which provided for transfer service to certain East Greenacres' loads; and
WIIEREAS, Avista provides Firm Point-to-Point Transmission Service to East Greenacres
pursuant to a separate agreement under Avisk's Open Access Transmission Tariff, to transmit and deliver
Bureau enerry from Bonneville's Bell Substation to Avista's Idaho Road and Post Falls Substations
("Transmission Agreement"); and
WHEREAS, Avista owns and operates distibution facilities over which Avista delivers Bureau
enerry from Avista's Idaho Road and Post Falls Substations to the East Greenacres Unit; and
WIIEREAS, East Greenacres and Avista are par(y to the Electric Distribution Service Agreement
dated January 29,2009, which expires under its own terms on September 30,2014; and
WHEREAS, East Greenacres and Avista desire to enter into this Agreement for the continued
delivery of Bureau enerry from Avista's ldaho Road and Post Falls Substations across Avista's
distribution system to the East Greenacres Unit pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein, the
Parties agree as follows:
l. Definitions. In addition to words defined elsewhere in this Agreement as indicated with initial
capitalization, whenever used in this Agreemen! the terms below shall have the following
meanings:
Ll "Dg.liygry_fulg[5" means those points on Avista's electric system where Bureau enerry
transferred by Avista pursuant to this Agreement will be made available to East Greenacres
for the East Greenacres Unit as described in Exhibit l.
3.
4.
1.2. "Avista Receipt Points" means the point where Bureau enerry is received on Avista's
distribution system for delivery pursuant to this Agreement, which point(s) are located at the
I 15 kV side of Avista's ldaho Road and Post Falls Substation transformers.
1.3. "@4qiss!on,'means the ldaho Public Utilities Commission.
Term and Termination. Avista shall file this Agreement, subsequent to its execution, in a timely
manner with the Commission. This Agreement shall become effective on October 1,2014, or such
other date specified by the Commission, and shall tcrminate upon the earliest of the following
events: (1) termination of the Transmission Agreement, (2) expiration of the Transmission
Agreement, provided, however, that in the event East Greenacres continues to purchase
transmission service from Avista following expiration of the Transmission Agreement, this
Agreement shall remain in effect until such time as the Parties execute, and the Commission
approves, a replacement Elecric Distribution Service Agreemenf or (3) upon termination by either
Party after providing at least one year's prior written notice of termination.
Delivery of Electricitv. Subject to the delivery of Bureau Enerry to the Avista Receipt Points,
Avisk shall deliver Bureau enerry to East Greenacres at the Delivery Points.
Service Characteristics and Demand Limit.
4.1 Electric power delivered to the Delivery Points shall be three phase, approximately sixty (60)
Hertz alternating curren! at a nominal potential of 13.2 kV, and shall be delivered to the East
Greenacres Unit in amounts not exceeding a demand limit of 3000 kW distributed among the
two pumps that compose the East Greenacres Unit.
4.2 Added Load. East Greenacres shall notifr Avista in advance of the addition of any electric
load that would exceed the rated capacity of any of the facilities provided by Avista to serve
the East Greenacres Unit. In the event East Greenacres exceeds the nominal demand
provided in Section 4.1, East Greenacres shall be liable for all loss and damage to Avista's
equipment and facilities resulting from such excess usage.
Metering Equipment. Electric power delivered hereunder shall be measured by metering equipment
installed at the Delivery Points. All metering equipment shall be installed, owned, and maintained by
Avista.
Operation and Maintenance of the East Greenacres Unit and Deliver.v Facilities. The two pumping
stations composing the East Greenacres Unit are served by Avista's ldaho Road and Post Falls 13.2
kV feeders. Avista shall own, operate and maintain all electrical service facilities up to the Delivery
Points. East Creenacres shall bear all responsibility associated with the operation, maintenance and
replacement of its service transformers and other equipment at and beyond the Delivery Points.
Billing and Payment.
7.1 Monthly Billing. Each month during the term of this Agreement, Avista shall bill East
Greenacres a monthly seryice fee as shown in Exhibit 3. Such bill shall be mailed to East
Greenacres at the address set forth in Section 16 below.
7.2 Palvment. East Greenacres shall pay the amount specified in each invoice by transfer of
immediately available funds within thirty (30) days of the date specified in such invoice
(the "Due Date"). If East Greenacres fails to pay Avista the entire amount of any bill by
the Due Date, East Greenacres shall pay interest on the unpaid balance, from the Due
Date until paid in full, at a rate of 120 percent of the Prime Commercial Lending Rate,
5.
7.
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compounded monthly, as announced by Bank of America at its Spokane & Eastern
Branch office in Spokane, Washington; provided, however, that the interest rate shall not
exceed the maximum rate allowed by applicable law. All payments to Avista shall be
submitted to Avista via electronic funds transfer to the account specified in each invoice.
8. Scheduling. Scheduling for service under this Agreement shall be pursuant to then current borderline
load scheduling practices bet\ileen Avista and Bonneville. In the event borderline load scheduling
practices between Avista and Bonneville cease to exist, East Greenacres shall schedule service under
this Agreement pursuant to standard tansmission scheduling practices outlined in Avista's Tariff or
such other scheduling practices as may be mutually agreed upon by the Parties.
9. Losses. East Greenacres shall be responsible for all enerry losses related to service under this
Agreement as described in Exhibit 2. East Greenacres shall schedule loss retum enerry to Avista
pursuant to Section 8. By mutual agreement from time to time the Parties may establish alternative
arrangements to settle any loss obligation by East Greenacres. Such alternative arrangements shall be
consistent with the treatment of loss return energy in the Transmission Agreement.
10. Billine b], Others. Except as otherwise set forth in this Agreement, Avista shall not be responsible for
East Greenacres' billing arrangements for the purchase of Bureau energy, or for the transmission
thereofby others. East Greenacres shall be responsible for sales, use and other taxes associated with
the acquisition and/or transmission, by others, of Bureau enerry.
I l. Easements and Access to East Creenacres' Prooer8. East Greenacres hereby authorizes Avista or its
agent to do all work necessary on the lands of East Greenacres to accomplish the installation,
operation, and maintenance of Avista's lines and facilities to provide electric service required
hereunder. East Greenacres shall grant, without cost to Avist4 good and sufficient recordable
easements, in a form satisfactory to Avist4 that provide for Avista's facilities to be located over, on,
across and/or under said lands of East Greenacres covering rights-of-way for the installation,
operation and maintenance of Avista's facilities required to render service hereunder.
12. Force Majeure. As used in this Agreement "Force Majeure" means the inability of either Party to
perform its obligations as set forth herein as a result of unforeseeable causes beyond the reasonable
control of and without the fault or negligence of the Party claiming Force Majeure ("Force Majeure
Events"), which Force Majeure Events may include, but are not limited to, the following: acts of God,
strikes, lockouts, acts of war, riots, landslides, earthquakes, fires, floods, unforeseeable or unusual
weather conditions, washouts, explosions, breakage or accident to machinery or conduit, Force
Majeure occurrenc€s as defined by any approved tariffs, or any binding order, rule or regulation of
any court or governmental authority, or any other occurrence beyond the reasonable control ofeither
ParB whether similar or dissimilar to any of the foregoing examples. If either Parg is rendered
wholly or partially unable to perform its obligations under this Agreement due to a Force Majeure
Event, that Party shall be excused from whatever performance is affected by the Force Majeure Event
to the extent so affected, and shall not be liable for said non-performance to either Pa4y provided that
notice of such Force Majeure Event is given to the other Party within a reasonable time. The
occurence of a Force Majeure Event effecting Avista's ability to deliver electric power to the East
Greenacres Unit shall not permit East Greenacres the right to extend the term of this Agreement, nor
relieve East Greenacres from its minimum charge obligations;provided, however, that such minimum
charges shall be prorated based on the actual number of days of service provided to East Greenacres,
if a Force Majeure Event affecting Avista results in Avista's inability to deliver electric power for a
period in excess oftrventy-four (24) hours.
13. Indemnification and Hold Harmless Protection. East Greenacres shall indemniff and save harmless
Avista from any liability, loss, or expense arising from or growing out of injury to persons, including
death, or damage to property, which may occur on the electic system of East Greenacres and on its
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side of the specified Delivery Points unless such loss is due to the negligence of Avista. Where such
claim or loss is caused by the concunent negligence of East Greenacres, its agents or employees, and
Avista, its agents or employees, East Greenacres hereby agrees to indemniff, defend and save Avista
harmless from all such claims or losses to the extent that such claim or loss was caused by the
negligence of East Greenacres, its agents or employees.
14. Assienment. East Greenacres shall not (by contract, operation of law or otherwise) assign this
Agreement, or any right or interest in this Agreement, without Avista's prior written consent. No
such assignment, with or without prior consent by Avist4 shall relieve East Greenacres from its
responsibilities under this Agreement, and all obligations and liabilities incuned hereunder shall be
preserved until satisfied. Subject to the foregoing restiction on assignment by East Greenacres, this
Agreement shall be fully binding upon, inure to the benefit of and be enforceable by the successors,
assigns and legal representatives of the respective Parties to this Agreement.
15. Amendment and Waiver. This Agreement contains all of the terms and conditions bearing upon the
subject matter and shall not be changed or varied except by written agreement executed by the Parties
hereto through duly authorized representatives. If at any time the terms hereto are not strictly adhered
to or enforced, they shall not thereby be deemed waived or modified, but shall at all subsequent times
and dates be deemed in full force and effect.
16. Notices. Unless otherwise specified, any notice required under this Agreement shall be given in
writing and shall be effective from the date received by the Parly to which it is provided.
l6.l Notices to Avista shall be mailed or delivered to the attention of:
Avista Corporation
I4l I East Mission Avenue
Spokane, Washington 99202-1902
or
P.O.Box3727
Spokane, Washin$on 99220-3727
Attention: Manager, Transmission Services
16.2 Notices to East Greenacres shall be mailed or delivered to the attention of:
East Greenacres Irrigation District
2722N McGuire Rd.
Post Falls, ID 83854
Attention: Manager
A Party may change the place or address for delivery of notices to it by giving notice to the other
Party as thus described.
17. Goveming Law. This Agreement shall be construed and interpreted in accordance with the laws of
the State of Washington, without giving effect to its principles of conflicts of law.
18. Venue. Any action at law or in equity to enforce the terms and conditions of this Agreement shall be
brought in Spokane Coungr, Washington.
19. Headings. The section headings in this Agreement are for convenience only and shall not be
considered part of or used in the interpretation of this Agreement.
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IN WTII\IESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized representatives on the date(s) set forth below.
AVISTA CORPORATION EAST GREENACRES IRRIGATION
By:lY,-
JeffSchlect
Senior Manager, Transmission Services
Date: Jru, Ztr. ?2r./
Ron Wilson
Manager
Date: \.r*F oco, zor *
EAST GREENACRES IRRIGATION
DISTRICT
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Exhibit I
Poinb of Deliverv
East Greenacres Inigation District Pumping Sation #2
Location: The point at Chase Road and Hayden Avenue (Props$ ID# 51N05W223220) where
Avista's distribution facilities and the service transformers owned by East Greenacres are
connected
Feeder: tDR253
Voltase: 13.2 kV
East Greenacres Irrigation District Pumping Station #3
Location: The point at Chase Road, one quarter mile north of Poleline Road (Property
ID # 51N05W287720) where Avista's distribution facilities and the service tansformers
owned by East Greenacres are connected
Feeder: PF2l3
Voltase: 13.2 kV
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Exhibit 2
Loss Calculations
Notes:
- Feeder distances are approximate, taken from Avista feeder mapping software
- Distribution line loss factors are calculated by multiplying the line distance in miles by a factor of
1.00%. All transformers, whether substation or service, have a specified 1.25 % loss factor.
- Service to these pumps is metered at a primary voltage. East Greenacres owns the service transformers at
these locations.
Feeder Distribution Section
Distribution
Line
Distance
(miler)
Distribution
Line
Loss
Fector
Substation
Transformer
Loss
Factor
Total
Loss
Factor
IDR253 Pump #2 2.017 2.017 1.250 3.267
PF2I3 Pump #3 1.760 t.760 1.250 3.010
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Exhibit 3
Monthlv Electric Distribution Serrice Charse
The monthly charge is Four-Thousand Two-Hundred Thimy-One Dollars and Seventy-Four Cents
(s4,23r.74).
The monthly Electic Distribution Service charge is calculated based upon a load ratio share of Idaho
distribution facilities costs as included in Idaho retail electric rates as of October 1,2013 (rate test year of
July 201 I -June 2012).
East Greenacres Load Ratio Share
Idaho retail l2-month average peak load (demand)
East Greenacres l2-month average peak load (demand)
East Greenacres demand ratio
ldaho Distribution Facilities Cost
Substation, OH poles and conductor, UG conduit and conductor
East Greenacres Electric Distribution Service Charge
Idaho Distribution Facilities Cost
East Greenacres demand ratio
Annual Service Charge
Monthly Service Charge
615,990 kW
850 kw
0.00t37799
$36,851,385
$36,851,385
0.001378
$50,781
$4,231.74
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