20150513Petition.pdf

Avista Corp.
l4l I East Mission P.O.Box3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
May 12,2015
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
P O Box 83720
Boise, D 83720-0074
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RE: In The Matter of The Joint Petition of Avista Corporation and Clearwater Paper Corporation
For Approval of Amendment No. 1 to the Electric Service Agreement
Dear Ms. Jewell:
Enclosed for filing with the Commission is the original and seven (7) copies of Avista Corporation
and Clearwater Paper Corporation's Joint Petition and Request for Modified Procedure. Avista has
also included a CD with the files for your convenience.
Should you have any questions regarding this filing, please do not hesitate to call me at (509) 495-
8620. Thank you in advance for your assistance.
Sincerely,
Or*^"t-{il*
Patrick Ehrbar
Manager, Rates & Tariffs
Enclosures
Certificate of Service
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 12tr day of May,2Ol5, served the foregoing Petition upon
the following parties, by mailing a copy thereof, properly addressed with postage prepaid to:
Jean D Jewell, Secretary
Idaho Public Utilities Commission
Statehouse
Boise,ID 83720-5983
Jean j ewell@puc. idaho. gov
Peter J. Richardson
Richardson & O'Leary PLLC
515 N. 27tr Street
PO Box 7218
Boise,lD 83702
Peter@richardsonandoleary. com
Marv Lewallen
Clearwater Paper
601 W. Riverside Avenue
Suite I100
Spokane, WA 99201
marv. lewallen@ clearwaterpaper. com
Patrick Ehrbar
Manager, Rates & Tariffs
David J. Meyer, Esq.
Vice President and Chief Cotrnsel for
Regulatory and Govemmental Affairs
Avista Corporation
1411 E. Mission Avenue
P.O.Box3727
Spokane, Washington 99220
Phone: [phone]
Attorney for Avista Corporation
Michael S. Gadd
Senior Vice President & General Counsel
Clearwater Paper Corporation
601 W. Riverside Ave., Suite 1100
Spokane, Washington 99201
Phone: (509) 3,+4.5900
Attorneys for Clearweter Paper Corporation
IN THE MATTER OF THE JOINT
PETITION OF AVISTA CORPORATION
A}.ID CLEARWATER PAPER
CORPORATION FOR APPROVAL OF
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Peter Richardson
Richardson Adams, PLLC
505 N.27s Steet
P. O. Box 7218
Boise,Idatro 83702
Phone: [phone]
BEFORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
CASE No. AVU-E-LI-D{
JOINT PETITION A}.ID
REQUEST FOR MODIFIED
PROCEDUREAMENDMENTNO. I TO THE
SERVICE AGREEMENT
Avista Corporation ('Avista") and Clearwater Paper Corporation ("Clearwater.) (Avista and
Clearwater are referred to collectively as the "Parties") hereby petition the Idaho Public Utilities
Commission ("Commission" or "IPUC") for an order approving Amendment No. I to the Electric
Service Agreement between Avista Corporation and Clearwater Paper Corporation. The Electic
Service Agreement ("Agreemenf') was approved by the Commission on June 28,2013 in Case No.
AVU-E-13-02 (Order No. 32841). Amendment No. 1 is dated Muy {, 2015 and is attached as
JOINT PETTTION OF AVISTA AND CLEARWATER PAPER - I -(s
Exhibit 1. Petitioners request that this Petition be processed under Modified Procedure (IDAPA
3 1.01.01.201 through .204).
In support of this Petition, the Parties state as follows:
l. Avista is a corporation created and organized under the laws of the State of
Washington with its principal office in Spokane, Washington. Avista is an investor-owned utility
principally engaged in the business of providing elecnic and natural gas service in the states of Idatro
and Washington, as well as natural gas service in the state of Oregon.
2. Clearwater is a corporation that among other things, operates a paper manufacturing
facility located in Nez Perce County, Idaho (hereinafter referred to as the *Facility").
3. Clearwater owns and operates a generation system at the Facility that is capable of
generating approximately 132.2 megawatts of energy (the "Generation"). These generators are
Qualifring Facilities ('QF") pursuant to the Public Utility Regulatory Policies Act of 1978 and 18
C.F.R. Part292.
CTJRRENT AGREEMENT BETWEEN CLEARWATER AI\[D AVISTA
4. The current Agreement with a five-year term beginning July 1,2013 and ending on
June 30, 2018, was approved by the Commission in Order No. 32841 in Case No. AVU-E-13-02.
The Agreement provides that Clearwater's Generation shall be used to serrye its load at the Facility,
and that all of the electric power requirements at the Facility that exceed the electric power generated
by Clearwater's Generation shall be purchased and received from Avista. Avista seryes Clearwater's
additional power requirements under Avista's *Extra Large General Service To Clearwater Paper's
Facility" Schedule 25P rates, including all applicable rate adjustments.
JOINT PETITION OF AVISTA AND CLEARWATER PAPER - 2 -{b
AMENDMENT NO. 1 TO THE AGREEMENT
5. The Parties have agreed upon two modifications to the Agreement related to
lncremental Energy and the Term of Electric Service Agreement, subject to the approval of the
Commission. The Parties are requesting an effective date of July l, 2015. Detailed below are the
agreed-upon changes to the Agreement as set forth in Amendment No. l:
a. Incremental Enerq.y. From time to time Avista desires to have the option to purchase
incremental, excess energy generated by Clearwater's generation. While Clearwater uses its
own generation to meet some of its energy needs, it has additional generation capacity that
generally is not economical given current energy rates and wholesale market conditions (e.g.,
it is "out of the money''). However, in certain time periods wholesale energy prices can
increase to a level that would make Clearwater's additional capacity economic. At the same
time, Avista may require additional generation in order to meet its system load requirements,
and in lieu of purchasing energy in a higher price wholesale market, would instead purchase
from Clearwater "Incremental Energy" at a mufually agreed upon price. Details relating to
how this process would function are described in Section A,1.2 of Amendment No. I to the
Agreement. This provision could provide incremental benefit to Clearwater, and, at the same
time, provide Avista with a lower cost energy resource, {rs compared to the then-current
market conditions. This would provide incremental benefits to our customers.
b. Term of Electric Service A8reement. The Parties have agreed to extend the term of the
existing Electric Service Agreement by three yearsi, through June 30, 2021. While the
existing Agreement continues on a year-to-year basis after the initial term, extending the
JOINT PETITION OF AVISTA AND CLEARWATER PAPER.3 =76
Agreement for an additional three years provides increased confidence in the planning for
futur€ operations by Clearwater, and the loads to be served by Avista (as well as the cost to
serve the load).
WHEREF'ORE, Avista and Clearwater respectfully request ttrat the Commission issue an
order approving Amendment No. I to the Agreement and request that this Joint Petition be
processed under the rules providing for Modified Procedure so that it can be effective July l, 2015.
DATED A"taurof tvlay 2015.
Clearwater Paper Corporation Avista Corporation
Signature:Signature:
Name:
Date:
Name:
JOINT PETMON OF AVISTA A}ID CLEARWATER PAPER - 4
--(s
Amendment No. I to the Electric Seruice Agreement
Between
Avista Corporation
and
Cleamater Paper Corporation
, 2015, isThis Amendment No. I ("Amendmenf'), dated t
entered into by and between Avista Corporation 1'e rporation
("Clearwater" or "Customer").
RECITALS
WHEREAS, the Parties entered into an Electric Service Agreement dated April ll,2013
(Avista Contract No. M-16950) under which Clearwater uses its Generation to serve its own load and
purchases additional electric power from Avista pursuant to the Electric Service Agreement and
Schedule 25P;
WHEREAS, the Parties desire to amend the Electric Service Agreement to facilitate Avista's
ability to request and purchase, and Clearwater's ability to sell lncremental Energy (as defined below)
upon mutually agreeable terms; and
WHEREAS, the Clearwater has requested, and Avista has agreed, to extend the term of the
Electric Service Agreement for an additional three years.
NOW THEREFORE, in consideration of the mutual agreements set forth herein, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Panies agree as follows:
AGREEMENT TO AMEND
A. Incremental Enerry. To facilitate Avista's ability to buy, and Clearwater's ability to
sell Incremental Energy from its Generation, Section 1 of the Electric Service Agreement is amended
and replaced in its entirety with the following:
1. Sale and Delivery of Electric Power and Enerey.
l.l Generation to Serve Clearwater Load. Except for the provision of Incremental
Energy pursuant to Section 1.2, Customer shall use the Generation to serve its
load at the Facility. To the extent that the Generation generates electric power
in excess of the electric power requirements of the Facility ("Excess Energy''),
Customer shall be credited for the excess kwhs generated during the billing
period in a manner consistent with Paragraphs a(BXii) and 5 of Schedule 63 of
Avista's Idaho Taritr; provided, however, that any Excess Energy that is
generated by the Generation at Avista's request pursuant to Section 1.2 below
shall be treated as "Incremental Energy" in accordance with Section 1.2.
Page I of3
AmeodmentNo. I to ContractNo. M-16950
Incremental Energy. Any Excess Energy generated by the Generation ptrsuant
to Avista's request shall be "Incremental Energy" under this Agrcement. To
initiate an Incremental Energy purchase from Clearwater for any hour(s)
pursuant to this Agreement, the Avista Real Time Scheduler will call Clearwater
and request a ptrchase of Incremental Energy and a start and stop time. If
Avista agrees to buy and Clearwater agrees to generate and sell Incremental
Energy, the Avista Real Time Scheduler and the Clearwater Turbine operator
will agree on a start value for the Clearwater Incremental Energy<.g., if the
Generation is generating 50MW of electric power at the time Avista requests
Incremental Energy, then all additional energy generated above 50MW will be
Incremental Energy. Avista will purchase, and Clearwater will generate and
sell, Incremental Energy at a mutually agreed upon price. The Avista Real Time
Scheduler will confirm the start time, stop time, start value, total Incremental
Energy generated in each hour, and the mutually agreed upon price in writing,
which may be accomplished via electonic mail or other electronic means on or
before the close of business on the next business day. All verbal
communications between Clearwater and Avista for purposes of this Section 1.2
shall be on a recorded telephone line and directed to the following:
1.3 Sales to Thfud Parties. If dwing the Term of this Agreement, Customer desires
to sell the output of the Generation to any third party(ies), Customer shall
terminate this Agreement by providing Avista written notice of termination at
least 90 days prior to such termination. The sale to the third party shall not
commence until the date on which this Agreement is terminated. ln the event
that Customer desires to sell the output of the Generation to any third party(ies),
Customer shall be responsible for making all necessary arangements to
facilitate the sale of the ouQut ofthe Generation to such third party(ies).
1.4 Customer's Purchase of Electic Power. Except for the electric power generated
by Customer's Generation that is used to serve Customer's electric power
requirements at the Facility, Customer shall purchase and receive from Avista
all of the electric power requirements at the Facility in accordance with this
Agreement.
B. Term of Electric Service Agreement To extend the term of the Electic Service
Agreement for three yeaxs, Section 2 of the Electic Service Agreement is amended and replaced in its
entirety with the following:
Amendrnent No. I to Contract No. M-16950
t.2
To Avista:
Real-Time Scheduler
Phone: [phone]
To Clearwater:
Shift Supervisor
Phone: [phone] (land) or
Page 2 of3
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2. Term of Agreement. This Agreement shall become effective on July l, 2013
("Effective Date"), subject to approval by the Idatro Public Utilities Commission
("Commission"), and shall remain in effect for a term of eight years (through and
including June 30, 2021), unless terminated earlier by Customer for the limited purpose
specified in Section l. Avista shall file this Agreement with the Commission for
approval prompfly after the Execution Date and shall thereafrer seek Cornmission
approval of this Agreement. After the initial term, this Agreement shall continue in
effect from year to year unless either Party elects at any time to terminate this
Agreement by glving 90 days' prior wriuen notice to the other Party.
C. Efiective Date of Amendment. This Amendment shall become effective on July 1,
2015, subject to approval by the Idaho Public Utilities Commission. Avista shall file this Amendment
with the Commission for approval promptly after this Amendment is executed by both Parties and
shall thereafter seek Commission approval of this Amendment.
D. Miscellaneous. Except as expressly amended by the provisions set forth in this
Amendment, all of the terms and conditions of the Electric Service Agreement shall remain in full
force and effect following execution of this Amendment and each Party confirms, ratifies, and
approves the Electric Service Agreement as amended by this Amendment. All capitalized terms used
herein and not othenrise defined shall have the respective meanings glven to such terms in the Elecnic
Service Agreement. This Amendment may be executed in tno or more counterparts, each of which
shall be deemed as an original and together shall constitute one and the same document.
IN WITNESS WHEREOF, each Party has caused this Amendment to be executed by their
authorized representative on Ore date(s) set forth below.
(Printed Name) .'
So^i,: i t lt'rc Pn t ;'l**
(Title) ,s/,tf E
(Date Signedl
'1(Title), ,S/trllr
(Date Signed)
L
Amendment No. I to Contract No. M-16950
P4ge 3 of3
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