20180413Stipulation and Settlement.pdf

ldaho Public Utilities Commission
Otfice of the SecretaryRECEIVED
APR I 3 2018
David J. lv,Ic1,er. lisq.
Vicc })residcnt and (hicl'(otrnscl of
Rcgr-rlatorl' and (iovcrnrncntaI r\I l'airs
Al'ista Corpor*tirln
l-ll I li. lvlission Avcnue
l'.O. llox 3727
Spokane. Washington 992:0
Phonc: (509) -195--li 16. Iax: (509) .t95-tt85l
I}randon Karpcn
Dcputf i\ttcmel' (ieneral
ldaho l'}uhlic [.]tilitics ('ommission Stall'
P.0. Ilox tli720
lloisc. II) 81720-007-t
Phonc: (208) ii-+-0ill. [;ax: (208) i34-3762
lN'l'l{l': IvlA'l"l'lll{ 0}r TIIII JOIN]' )
API't.t(:A't'loN ot.'t{Yl)Ro oNtl )
I,IIVIII"TII) AND AVIS'I'A COIIPORA'I'ION )
I;OR;\PPROVAL ()f l\'ll:ttCllR ),,\cRltiMlili'l' )
Br-tr0RIi'ilII Il)AlI() Pt]l]t,lc tl'ilLtT'tus cOMl\tIsst0N
Boise,ldaho
I: I iz*bcth'l'helmas. Ilartncr
Kari Vandcr Stocp" Partne.r
K&L0utcs l.l.P
On Bchall'ol'l lydro One l,inrited
Ol3'mpus lrquity [.[-C
935 I'or"rrtli Avcnue. Suitc 29(X)
Scaulc. WA 9810-+-lI58
L i 2". thonrasiir'r k I gatcs.cont
kari. r,'anderstocplrrkl gatcs.conl
AVr J-r..- 17-0q
AVU-C-t7-05
CASIT NO.
(T't t,[1 LA',ilOti ANt) SETTt.IiMIiNT
'l'his Scttlcmcnt Stipulution and Agrecnrcnl (hcrcinaller "$itipulation") is cnterctl irrto by
and among thc lbllou'ing partics in this casc: IIvdrc Onc l"intitcd ("ll).dro One"). acting through
its indircct. rvholll'-ou'ned subsidiarl,Ol1'n'rpus liquitl' l.l,C. and Avista Corporatiorr ("Avista")
(sonretimes herealierioirrtll'rel'errcd to as ".loint;\pplirants" or thc "Conrpanies"). ths StalTol"
tlrc ldalro lluhlic l"Jtilitics Conrnrissiun ("Stnll). Clcarrt'atcr llapcr Corporolion ("Cleanvater").
Itlaho Forcst (iroup. Ll,('("ldaho l"orcsl Group"). ldaho Consen'aliot't l"caguc ("lCL"). thc
(leimmunitl'Actirlrr l)artncrship Association ol'ldaho ("CAPAl") and thu Washington and
Northcrn ldaho l)istrict (lnuncil cl'l,abt"rrers (\[:Nll)C:L].'l'hcse entities arc collectively rel'errcd
to as thc "P&rtitrs." and rcprcsent all ol'the partit-s in thc *hove-rcl'ercnccd cases. 'l'hc liettling
S'l ll'tll.A'l'lON AND Slr ITLIiN'IliNl' AVt 1-lr-l 7-09 & ;\VLi-(i-l 7-05 [)agc I
Irarlies undentand this Stipulatiorr is suhjecl to apprnval b1' the ldaho Public tJtilities
Commission ("lPLlC" or the "Cornntission").
I. II\TRODTJC'TION
l. 'l'hc tcn'rrs and conditiotts ol'this Stipulation arc sct tirrth hcrcirr. 'l'lrc Partics agrcc
that this Stipulation rsprcscllts a lirir, just and rcastuablc corr:promise ol'all thc issur"rs raiscd in
the pr<lcecding. is in the' public interest and its acceptance by the Conrmission reprcsents a
rcaseinablc rssolution of' the multiple issues idr:ntilled in this casc. "l'he Partics. tlrerelirrc.
recommend that the Commission. in accordarrcc nilh RP 174. appro\,c the Stipulation and all ol'
its terms and conditions without rnaterial changc or condition.
II. BACKCROIINT}
?" On July 19.2017. Avisla announccd that it had enlcred into a tncrger agrcement
with Illdro One. On Septernber 14.3017. the Jolnt Applicants lllcd the abovc-captioncd Joint
Application lirrapproval ol'the nrcrgcr. Approval of theJoint Application w'oultl rcsult in Avista
beconring a rvholly**'ncd subsidiary of a Hydrc One holding compan)'. 'l'hc Joint Applicants
havc rcqucsted approvnl h1' Augur,rt 1.1. l0l8. and hsve rrradc lhc samc rcquest in othcr statc
jurisdictions.
3. Pctitions to intervene in this procccding q'cre liled by (lcaru"ater" ldaho l;orcsl
Croup. Idaho Conseri'ation l,eaguc. CAPAI and thc WNIDCL. 'l'hc Conrnrission grantcd tlresc
intenentions through IPLJC Ordcr Nos. 33914. i3916 and 13931,
4. A scttlcmcnt conlsrcnce \\'&s noticerl ancl hcld in the Clomrnission olljccs on April
4. 2018, and rvas attendcd by the Parties to this casc. As a compromise ol'positiorts in this cass.
and for other consideration as set fbfih bclorv. the Parties agrcc to the lbllowillg temls:
S'l'lPUI".A1'lON AND St:]"ft"lil\'!l:N'f -' nVLI-li' I 7'0e & AVI"J-G- I 7-0i l)agc 3
III. Tf,RMS OT TIIT STIPI.]I,ATTON ANI} SIITTLEMENT
5. Ovcn,i*r' ol'Settlcntcnl. 'l-he [)arties ogree that l']xhitrit i\ contains thc contplctc
list ot' Comnritmcnts that Joint Applicants collcctivell' and individually agree to nrake in
cxchangc lirr the support of thc Partics in this procceding (hereinaller ret'erred to as
"Cotnmilntcnls"). 'l'he ('ommilrtrcnts arc conrpriscd ol'gencral (lontnritnrents applicahlc to all
thc statcs in lr,hich Avista's scrvice territorv cxtends and ldaho-specilic Conrmittnunts rvhich
apply onll' to thc activities and operations ot' Joint Applicants n'ithin ldaho. lJy virtue ol"
uxecuting this Stipulation. thc.loint Applicants agrcc to perlbrm'all ol'the ('onrmitments set lbrth
in l:xhibit A accordirtg to thc provisions ol'cach Clomntitnrcnt. as sr:t lilrth tlrcrein.
6. ln the proccss ol'obtaining approvals ol'thc Proposcd'l'ransaction in other slatss,
thc C'omnritm('nts ma)' he cx;landed or nrodilled as a resuh ol" regulatorl' dccisions or
scttlemcnts. Thc .loint Applieant* agree as sct lbrth in Comrnitrnent Nei. 74 ol'Hxhitrit A hereto
that thr: Cornmission shall l.rnve arr opportunitl' uncl thc authority to consider and adopt in ldaho
an1'comnritments or conditions adop{cd elsovhere to rvhich thc Joint Applieants agrec. cven il'
such ('onrmitnrc.nts and conditi()ns arc agreed to alier the Clor:unission cnters its order in this
dockct. '["o tacilitatc thc Cunrnrission's consideration and adoption of the commitments and
corrditions lionr othcr jurisclictions. the Panics urgc thc Clunrmission to issuc an ordcr acccptirrg
this Stipulation ns soon as practical. but to rcscrvt in such ordcr thc c.xplicit right to rc-opcn
lrxhihit A to add (*'ithout rrrodification ol'thtl language thereol'exet:pt such non-substantivc
changcs os &re nccessar), tei nrake thc comnrilment or condition applicable to Idahol
comntitmcrrts and conditions acccptcd in anothcr statc jurisdiction. subject to thc lintitations set
lirrth in ('onrnritmcnt No. 7.1 ol'ljxhibit r\. 'l'o providc input to thc Conrnrissiotl to facilitatc a
prolnpt dccision rcgarding thc dcsirabilitl' or lack ol' desirabilitl' lirr thcsc eiut-of-stalc
S'l"lpl1l.A.l'lON ANI) SI;l'1'l,l:l\,{l1N"l ' AVt.i-11-17-09 & AVl.l-(i-17-05 llagc 3
comn'titmcrlts and conditions to hc adoptcd in ldaho. thc Partics agrcc to and recommcnd thc
tbllorving process, rvhich is set lbrth in Contnritnrcnt l\u. 7.1 ut'lr.xhibit A hcrcto:
Within live calcndar da.t's alicr Applicants l'ilc a stipulation rvith nclr or anrcndcd
conrntitntctrts u'ith a conrnrission in anotlrcr state.iurisdiction. Applicants,ol'ill scnd a
copl'o1'the stipulation and conrmitntrrlts to tlrc Norr-;\pplicant Parties.
Within tive calcndar day's allcr a cclnrnrission in anotlrer slatc jurisdiction issucs an
order that acccpts a stipulation to rrhich Applicants arc a pafl)' and imposcs nc\v or
modilied cotnmitrncnts. thot order. togelhcr with ull sonlmilmcrlts ol'an!'t1,pc agrccd
to h1'Applicanls irt such othcr state. uill hc filed u'ith thc ('onrmission and sen,cd un
all parties to tliis docket b1'thc rnost cxpetlitious ntcans praclical.
Within lcn calcndar day"s alier tlrc lnst suclr tiling lionr thr-' olhcr statr's ("l"inal
Iriling").thc Non-Applicant Partics ninl' tilc rvith thc ('ontnrission an)'rcsp()nsc tlrcl'
rvislr to makc. inclutling their position as to nlrcllrcr anv ol'thc c()\'euiutts.
comnritntents and contjitions lionr tlru othcr jurisclictions (rr'ithout nrodilic:rtion ol'thc
longuagc thcreol'exccpt such non-suhstanlive changcs .ls ilrc r"rrccssarl' to rnakc lhc
conrmitnrcnt or corrdition applicablc to ldaho) should bc adopterl in ldaho.
o
a
a
Within ljve calenelar da1's aller au1' suclr rcsporrsc !iliug" tlrc Applicanls nrat' lllc a
repl1, with the Conrnrission"
Il'an1, of the dates above tall on Saturdal'. Sunday'. or a holidar. the ncxt busincss dal
rvill be considercd as thc due datc.
"l'hc Pa(ies agrcc to support in thcir lilings tlrc issuancc hr1' thc Cornnrission ol- an
ordcr rcgarding tl,c adoption ol'such conrrnitmcrlts as soon as practical thcrealicr.
rccognizing tlut the Proposed 'l'ransaction eannot close until l'inal statc ordcrs havc
heen issued approving the Proposcd'l'ransactiorr.
r v. f)THIR $ riN riRA l"..pRovrst o.Ns
7. l'he P*rtics. b1' signing this fitipulation. acknorvlcdge that tlre .loint Applicanrs
have sati.stied thc standard undcr tdaho Cods Scstion 6l-328 lirr approval ot'thc Proposcd
'l'ransaclion and request that the Conrnrission issuc its ordcr approving thc Joint Application and
this Stipulation. Thc Parties cncouragc the Conrnrission 1o entcr a llnal ldaho approval ordcr b1'
no later than August 1{. 2018.
a
a
a
S'flPUl-A1'lON AN l) Sl:'l"f L[:lvl UN"f "' AV L]-l:- I 7-09 & AV t J-(;- I 7-05 Page -l
tt, 'l'hc Parties suhmit this Stipulation to the ('ornntission anel reconrrncncl appnn,*l
in its errtiret)' pursuant tt: RP 274. Partics shall suppart this Stipulation hcl'orc thc Conrnrission.
and no Partl' shall nppeal a Comntission Ordcr approving the Stipulation or an issuc rcsolvcd by
thc Stipulation. If'this Stipulation is challenged b1, any pcrson not a party tc the Stipulation. the
l)arties to this Stipulation rescr\:e thc right to lih: tcstimonl'. cross-cxamine witncsscs and pul on
such casc as thcl'dectn apprtlpriatt to respond lull1' to thc issurs prcsentcd" including tlre right to
raisc issues tlrat are incorporatcd in the settlcnrcnt tenn.s crnbodietl in this Stipulation.
Notwithstanding this rescn,ation of rights. thc Parties to this Stipulation agrce that they u'ill
corrtinuc to support thc Conrrnissiort's adoption ol'thc tcrms of this Stipulation.
q. 'l'he Partiesagrco that this Stipulation reprcscnts a compronrisc of'thc positions ol
thc Partics in this casc. r\s provided in RP 27?. other than any tcstimony lilcd in suppor"t ol'the
approval ol this Stipulation. and cxcepl to the extcnt necessary tilr a Party to e.rplain betore thc
C'onrmission its eirvn statcmcnts and positions rvith rcspect to thc Stipulation. all statcments nradc
and prositions takcn in ncgotiations rclating to this Stipulation shall hc contidential and u'ill not
hc admissiblc in evielcnce in this or anv olhcr procecding.
10. Il'the ('ornnrission r-cjecls an)'pflrt rr all of this Stipulation or imposes any'
additional matcrial conditiorts on approval ol'this Stipulatiorr. caclr Purly'rrscrvcs thc right. upon
rrrittcn notice to the Conrnrission and the other Partics to this proceeding. rr'ithin I-l dal's ol'thc
date of such aclion b1' the Conrmissiorr. to rvithdrau' tionr this Stipulaticln. In such casc. no Partt'
shall bc bound or prciudiccd by thc tcnrrs ol'this Stipulation. and each llarty shall tre entitlt'd ltr
scek reconsidcratiun ol'ths Comnrissiolr's order. lilr: lcstinronv ils it chooscs. crrtss-cxanrinr-'
rvitncsses. and do *ll otlrer things nccessar!' 1rr put on such ctsc ils it deenrs appropriatr:. ln suclr
case.lhc Parties immediatell, uill recluest the pronlpt recon\,ening ot'a prchearing confcrsncc lbr
S"l'lP[ ] l-Al-lON ANI) Sl:'fTI.liMIIN'I" AVt ]-li- I 7'09 & AYI i-(i-l 7-05 Ilagc 5
purposes of estahlishing a proccdural schedulc lor thc completion of thc casc. in accorclance *'ith
law.
I 1. 'l'he Parties agrce th*t this Stipulation is in thc puhlic interest and that all of its
tcrms and conditions are lair. just and rcasonal:le.
ll, No Partl'shall hc hound. bcncfltcd or prrjudicccl h1'any'position asscrt*d in the'
ncgotiation ol' this Stipulation. c.\cept to thr: sxtcnt cxprcssly' statcd hcrcin. nor slrall this
Stipulation be construed as a rvaiver ol' the rights ol'an1' Party unless such rights are cxpressly'
*'aived herein. F.xecution ol" this Stipulation shall not bc decmcd to .constitute an
acknorvledgment by any Partl' ol'thc validitl' or invaliditl' of an1' particular mcthod. tlrcorv or
principlc of regulation or cosl rceovcry. No Partv shall be dcenrcd to havc agrced that ury
method" lheory or principlc ol'regulation or cost rccovt:r)' emplol'cd in arriving at this litipulntion
is appropriatc fbr resolving an1,' issucs in an1' other proceeding in the luture. Nt"r findings ol'lact
or conclusions ol' larv othcr than thosc statcd hcrein shall hc dcented to bc inrplicit in this
Stipulation.
13. 'l'he otrligations of thc Parties under this Stipulation arc sutr.icct to the
Commission's approval ol'this Stipulation in accordancc *'ith its tcmrs and conditions and upon
such approval bcing uphcld on appcal. if an1'. by a court oIcompctcnt jurisdiction.
14. 'Ihis Stipulation nra-v- bc cxccuted in counterparts a.nd cach signr:d countcrpart
shall constitute im original documenl.
rLl
DA',niD this I J _- elay ol'April. 201 s
sl"lPLJLA'l'lON nND Sll'["il.t:MIiNl' AVt.i-1":-l 7-0e & AVLr-(i-l 7-05 l)agc 6
I tYDRO 0Nt: t,tl\il'l'liD
I)3':
lilizabeth'i'honrns. Pa$ner. K&[, Uates l,l.l'
Kari Vandcr Stocp. llanrrsr. K&1. (iates t.l-l'
On llehalf ot'll1'dro Orrc I.imitcd:rnd
0lr rnpus [quit1, L"l"('
sTAIrr or THp IDAH0 Pt[rl.t(:
t ITI t,ITI nS COM M ISSI0n*
AVIS'rA COltp0ttATt()N
R)'t fi-*7,/
Dayitl.l
.4tturrrcy lirr Avista ('oqronrl i on
cl.IiAtt\\'A't'FlR PA PER
c()RIrottA't'tt))l
lll'
Peter Richardson / Orcg Adaurs
Allor-ncys lbr Clcanvalcr llapcr
II'AI IO ("ONS[RYATI()N I,IiA(;I'}:
ll
Rcrrjaurin Otto
IiJulro Conscrvation Lcaguc
('OM :VT I I NITY ACTI(}N I'ARTNER.SI I I P
ASIiOCIAT'ION OS IOAII()
B1
llrud Purrly
;\ttonrcy lirr CAPAI
llv:
Ilrandon Karpcrr
l)clluty Allorncl' Cencral
I I}AIIO FORTiI{'I' CR()TI P, I,I,C
l{un 1,. \\:illiarns
i\tlonrcr lirr ldaho l:orcst Croup. [.[.('
\\.,I.!iI I I NC'I'ON A N D NOIITI TCR N
II}ATIO DIS'I'RI(:I COI"INCIL OF
t-.{}r()RI{RS
[]r:
Daniclh: Irranco-Nlalonc
Sclru'crin ('anrpbcll llarnard lglitz-in & l-avitt.
I,I.P
S1-lPL.lt.r\TI(}i* r\NI) Sl':'T"I'l..tr":VlliN'f ' AVI l-,li- I 7-{}9 & AVt 1.fi- l?'(15 Pagr"" 7
6r.
HYDRO ONE LTNflTED
By,
Elizabeth Thomas, Pa*ner, K&L Gates LLP
Kari Vander Stocp, Partner, K&L Gster LLP
0n Behalf of Hydro One Limited and
Olympus Equity LLC
STATT OP TIIE IDAHO PUBLIC
UTILTTTES COMMISSION
By:\
Karpcn' Dcputy Attorney General
IDAr{O TOnEST CXOUP, LLC
By:
Ron L. Williams
Attorney for ldaho Farest Group, LLC
WASHINCTON AND NORTHBRN
TPAHO DISTRICT COUNCII, OF
LABORERS
By,
Oanielle Franco-Maloue
Schwerin CampbellBarnard Iglitzin & Lavin,
LLP
AVISTA CORFORATION
David J. Meycr
Attorney fur Avista Corporatir:n
CLBARWA?trR PAPER
CORPORATION
B
Pcter Richardson / Greg Adams
Attorneys for Clearwater Paper
II}AHO CONStrRVATION TTAGUE
By'
Benjamin Qtto
Idaho Conservation l-aague
COMMUNITY ACTION PARTNERSHIP
ASSOCIATION OT IDAHO
By:
Brad Purdy
Attorney for CAPAI
STIPULATIOI-I AI{D SETTLEMENT * AVU-E-I7.09 & AVU,6"I7-05 Page 7
IIYI)RO ()N 1: I" t ivil'rr:l)
13 r,:
I:lizaheth'l'homas. Partrrcr. K&[- (]atcs Lt,P
Kari Vandcr Stocp. I'artncr. K&1" Cates l.l,P
On llclrall'ol'l{ytlrc One l.inritcd arril
011.'mpus t:quity l.L('
s'I"AFIr ()F- TItI,t lDAt"t() ptt131.16'
t J'l't t.tT't F:s CO,!t M tsst()N
llv:
llrarrdon Karpen
l)eputy r\ilorncy Gencrul
lDAlt() r()Rli!i'r (;Rot.lP, LLC
Ily
Ron L. Willinnrs
Atlorrrcl lbr ldaho Forest (iroup. I"l,('
WASI IIN(J'I'ON AN1} NOI{'THTRN
I DAtI0 DISTIII(;1' COT lNCII, OF
LAlfotililts
lly
I)arriel le l:ranco-Malonc
Schrverin ('*rrrpbell l]arnartl lglitzin & l,avitt.
I"I.I'
A VIS'rA (:Olt PO RA't't()N
Ill'
David J. lvlcycr
Attonrey lbr Avista Corporttion
(] I, I.]A IIWATF] R PA P E It
(](}R 'il0:{
By
llr:tcr / (\reg Adanrs
Atklrnrys lirr Clearrvntcr l)apcr
I DAI IO (:OI\SI|RVA'I'ION I,EAG U h,
8y:
l]cnjaruin 0tto
klaho Conservatiorr I.caguc
(]0M M LII\iITY A(]TI()N PAIII'NIiRSII IP
ASS(X:lA't't()N 0ti' I tlAIl()
By:
Ilrael Purdy
Attornel' ltrr ('AI'Al
S'l'll)1.il.rVI'lON i\NI) St'.1''l'l,l1l\'ll1NT' AVt l-lr-17-09 & AVtl-(i- l7-{)-5 l)age 7
In't)R() ()N ri r,tMll'tit)
By:
[:lizalttlt -l'ltorrrlr. l'artrrcr. K(tl- (;ltr\ l.l.l'
Klri Vandcr Struf. l);lilner. K&1. (iate: l.l.l,
On ll*hnll of l-11'drn C)nc l.inritr.d lntl
Olvrrrpus Ix;uitv I.l.('
.\'l'rlt;ti ()I;'l't II,l Il),\II() I,t:lil,l('
['"t't LI't'Iti.{ ('(}}tIl tssl( }N
ll t':
lJr';lndon Klrpcn
Deputl' Attt"rrncl Gcrrerll
IDAII() rORIiSl' {;n0[!l'. l.l,C
A\rlS'l';\ ('()Rl'( )lt,\'l'l()N
l] l'
l);rvitlJ. i\lc1'cr
,,\tturrrcl' lirr Ar"irtlt ('rrr;rrrr';rliurr
('1, I.:,\ l{ ll',,\',t'E lt I,AI't.: R
CORI'()R,t1'l0N
tl1'r
Pctcr llichlrrlrpn 1 (ircg Athnrr
Altrtrrte yr lirr ('lcurrvlrle r I);r;rr:r
I t),r I I ( ) ('( )XS I':R\"\'l'l{ }X l,t,:,\( ; I' t,l
l1l
llcu.iurrtirt ()ttn
Itlaltu ("nrtsrrvrl itttt I "cagtrc
('( )i\l Xl t I N I'l'l' r\ ( "1' I O N PA lt'l'N I'lttSH I P
ASS(X:IA'I'I{}N 0T IDAH{}
Ity:
llrinl ['rtrrly
Atturnc5' lirt ('AIIAI
X*,W/;B"v:
Rnnirkl1.. Willilrrrr
Attrrrpgy lirr ldllto Iirrcst (iruup. l-1.('
WASIIIN(;'II)N ANI) N0R'I'I II.]ITN
lDi\lI0 DIS'fnl(:'l' (:OtlN(:ll. ()F
I,ABORI'IT.S
By:
Danicllc limnco-Malrtnc
Schncrir ('urrr;rhcll ll;u'nirrrl lglitrin & l,irvitt.
LLP
.S'l'll)il1.t\.l'l()N r\NI] Sl:'l"l'l.l:tll;N1' ;\VU-li- l7-O() & r\V1r-(i- l7 O-i l':rgc 7
I t YDI{O ON ti l"l iY-Il'f nD
ti1 :
l:liz"at:cth -l'homas. llartner. K&1. Ciltcs l.l.l']
Kari Vander Stocp. Partncr. K&1. Cates l-l.P
On tlchall'uf'l l1'dro Onll l.imited ancl
Olt'nrpus Hquitl' t.l"('
ST;tIrF' ()1.' Tllll IDAIIO PtjBLlC
TJTI LITI IiS (:O}IMISSION
l.ly:
[]randorr Karpen
1)eputv Attornel' (ierreral
IDAI{O T'OREST GROT'P- T,LC
l)v':
llon 1.. Williams
Attorncy lbr ldaho L'orcst Croup. t,l-C
WASHIN(;'TON AND NOIITI{ IiRN
I I}AHO DISTRICT COUNCI I. OIT
I,AI}ORT]RS
llv:
Dnnicllc Franco-Malone
Schrve'rin Carnpbcll []arnard lglitzin & l.avitt.
I,1.P
.,\VI S'I'A C0RPOR,\TTT}N
David .1. Ivlcl cr
r\ttorncv firr Av ista ('orporat ion
CI,IiA R\1IA:I'I| It I}A PCIT
C0RPORATION
tl
l)cter Richnrdson I Crcg Adams
Attorncl,s lbr Clcar*'utcr Papcr
I DATIO CO:\SIiRVA'I'ION LT]AGU T:
Ill
[]cnjarnin Otto
ldaho Conscrvatinn l.caguc
CONT iVI U N I"I'Y AC:TION PARTN TRSU I P
ASSOCIATION OT IDAIIO
tlv:
l]rarl t'urdy
Attorney for CAPAI
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Exhibit A
RICEIVED
?8l8APR l7 AH 8:hl
MASTER LIST OF CO IN IDAHO
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Table of Contents
Reservation of Certain Authority to the Avista Board of Directors ..........
1. Authority Reserved:
2. Executive Management:.............
3. Board of Directors: ....................
4. Avista's Brand and Plan for the Operation of the Business:
5. Capital Investment for Economic Development:............
6. Continuedlnnovation:
Page
.4
,4
.4
.5
.5
.5
.5
5
7. Union Relationships:..............
8. Compensation and Benefits:
9. Avista's Headquarters:..............
10. Local Staffing: ...
I l. Community Contributions: .
12. Community Involvement: ...
13. Economic Development:.....
14. Membership Organizations:
15. Safety and Reliability Standards and Service Quality Measures .6
Rate Commitments .....6
16, Treatment of Net Cost Savings:.......
17. Treatment of Transaction Costs:......
18. Travel Expenses:
..7
20. State Regulatory Authority and Jurisdiction: .................
21. Compliance with Existing Commission Orders:...
22. Separate Books and Records:,...............
23. Access to and Maintenance of Books and Records:...............
24. Cost Allocations Related to Corporate Strucfure and Affiliate Interests:..........................10
......5
5
5
6
6
,6
.6
.6
.7
g
s
,9
,9
Idaho Settlement Proposal - Master List of Commitments Page I of25
Exhibit A
25. Ratemaking Cost of Debt and Equity:
32. Annual Report on Commitments:
33. Commitments Binding: ................
34. Capital Structure Support:.....
35. Utility-Level Debt and Preferred Stock:......
36. Continued Credit Ratings:
37. Credit Ratings Notification:........
. Avista Capital Structure:
ll
t226
27
28
FERC Reporting Requirements:......12
Participation in National and Regional Forums
29. Treatment of Confi dential lnformation: ...........
30. Commission Enforcement of Commitments:..
31. Submittal to State Court Jurisdiction for Enforcement of Commission Orders:
Financial Integrity Commitments............. .........13
......13
..13
t2
t2
t2
t2
t2
l3
13
t4
l4
t4
t4
39. Pension Funding:
38. Restrictions on Upward Dividends and Distributions
40. SEC Reporting Requirements:
41. Compliance with the Sarbanes-Oxley Act:
49. No Amendment of Ring-Fencing Provisions:
50. No Inter Company Debt:.........
,.......,.,....,..,14
Ring-Fencing Commitments
42. Golden Share:.....
43. Independent Directors:
44. Non-Consolidation Opinion:.
45. Olympus Equity LLC:...........
46. Restriction on Pledge of Utility Assets:
47. Hold Harmless; Notice to Lenders; Restriction on Acquisitions and Dispositions:..........16
48. Olympus Holding Corp. and Olympus Equity LLC Sub-entities: ..................17
...................... l4
...................... I 5
............',....,..,16
...................... I 6
....17
.... I 8
51. No Inter Company Lending: ..................18
Resource Planning Commitments............ ..........18
52. Renewable Energy Resources:. ..............18
Idaho Settlement Proposal - Master List of Commitments Page2 of25
Exhibit A
53. Regulatory Integrated Resource Planning (IRP) Sideboards:..l8
r9
r9
54. Energy Imbalance Market ("EIM")
55. Transport Electrification: ...............
Environmental Commitments......1 9
56. Greenhouse Gas and Carbon Initiatives:.
57. Greenhouse Gas Inventory Report:
Energy Efficiency, Weatherization, Community and Low-Income Assistance
Commitments ............
58. Funding for Energy Efficiency, Weatherization, Conservation, and Low-lncome
t9
Assistance Programs:
59. Clearwater Paper DSM Assistance:....
60. Idaho Forest Group (IFG) DSM Assistance:
61. Community Contributions: .............
62. Addressing Other Low-Income Customer Issues:....
63. Fee Free Payment Program:
64. Improve Penetration of Low-lncome Programs: ......
65. Tribal Communities: .............
......................21
)I
)I
Miscellaneous Commitments
66. Sources of Funds for Hydro One Commitments 2t
2t
22
67. Service Rules for Gas Utilities:
68. Meters:
69. Colstrip Planning:.22
.22
.22
70. Montana Community Transition Fund:
7l
72
73
Colstrip Transmission Planning
. Contract Z)
. Most Favored Nations:......23
Idaho Settlement Proposal - Master List of Commitments Page 3 of25
Exhibit A
Reservation of Certain Authority to the Avista Board of Directors
1. Authoritv Reserved: Consistent with and subject to the terms of Exhibits A and B
to the Merger Agreement (referred to as "Delegation of Authority") contained in
Appendix 5 of the Joint Application, decision-making authority over commitments 2-
l5 below is reserved to the Board of Directors of Avista Corporation ("Avista") and
not to Hydro One. Any change to the policies stated in commitments 2-15 requires a
two-thirds (213) vote of the Avista Board, provided that Avista must obtain approval
for such changes from all regulatory bodies with jurisdiction over the Commitments
before such changes can go into effect, and provide written notice to all parties to
Case No. AVU-E- l7-09/AW-G -17 -05 of such request for approval:
Governance
2. Executive MaLage[oe4ti Avista will seek to retain all current executive
management of Avista, subject to voluntary retirements that may occur. This
commitment will not limit Avista's ability to determine its organizational structure
and select and retain personnel best able to meet Avista's needs over time. The Avista
board retains the ability to dismiss executive management of Avista and other Avista
personnel for standard corporate reasons (subject to the approval of Hydro One
Limited ("Hydro One") for any hiring, dismissal or replacement of the CEO);
3.Board of Directors: After the closing of the Proposed Transaction, Avista's board
will consist of nine (9) members, determined as follows: (i) two (2) directors
designated by Hydro One who are executives of Hydro One or any of its subsidiaries;
(ii) three (3) directors who meet the standards for "independent directors" - under
section 303A.02 of the New York Stock Exchange Listed Company Manual (the
"lndependent Directors") and who are residents of the Pacific Northwest region, to be
designated by Hydro One (collectively, the directors designated in clauses (i) and (ii)
hereof, the "Hydro One Designees"), subject to the provisions of Clause 2 of Exhibit
A to the Merger Agreement; (iii) three (3) directors who as of immediately prior to
the closing of the Proposed Transactionl are members of the Board of Directors of
Avista, including the Chairman of Avista's Board of Directors (if such person is
different from the Chief Executive Officer of Avista); and (iv) Avista's Chief
Executive Officer (collectively, the directors designated in clauses (iii) and (iv)
hereof, the "Avista Designees"). The initial Chairman of Avista's post-closing Board
of Directors shall be the Chief Executive Officer of Avista as of the time immediately
prior to closing for a one year term. If any Avista Designee resigns, retires or
otherwise ceases to serve as a director of Avista for any reason, the remaining Avista
I "Proposed Transaction" means the transaction proposed in the Joint Application of Avista and Hydro One filed on
September 14,2017 .
Idaho Settlement Proposal- Master List of Commitments Page 4 of 25
Exhibit A
Designees shall have the sole right to nominate a replacement director to fill such
vacancy, and such person shall thereafter become an Avista Designee.
The term "Pacific Northwest region" means the Pacific Northwest states in which
Avista serves retail electric or natural gas customers, currently Alaska, Idaho,
Montana, Oregon and Washington;
Business Operations
Avista's Brand and Plan for the Operation of the Business: Avista will maintain
Avista's brand and Avista will establish the plan for the operation of the business and
its Subsidiaries;
Capital Investment for Economic Development: Avista will maintain its existing
levels of capital allocations for capital investment in strategic and economic
development items, including property acquisitions in the university district, support
of local entrepreneurs and seed-stage investments;
Continued Innovation: Avista will continue development and funding of its and its
subsidiaries' innovation activities;
Union Relationships: Avista will honor its labor contracts and has the authority to
negotiate, enter into, modify, amend, terminate or agree to changes in any collective
bargaining agreement or any of Avista's other material contracts with any labor
organizations, union employees or their representatives;
Compensation and Benefits: Avista will maintain compensation and benefits
related practices consistent with the requirements of the Merger Agreement;
Local Presence/Community Involvement
Avista's Headquarters: Avista will, and Hydro One agrees Avista will, maintain (a)
its headquarters in Spokane, Washington; (b) Avista's office locations in each of its
other service territories, and (c) no less of a significant presence in the immediate
location of each of such office locations than what Avista and its subsidiaries
maintained immediately prior to completion of the Proposed Transaction;
l0 Local Staffins: Avista will maintain Avista Utilities' staffing and presence in the
communities in which Avista operates at levels sufficient to maintain the provision of
safe and reliable service and cost-effective operations and consistent with pre-
acquisition levels;
ll. Communitv Contributi For five years after the close of the Proposed
Transaction, Avista will maintain a $4,000,000 annual budget for charitable
contributions (funded by both Avista and the Avista Foundation) and additionally, a
$2,000,000 annual contribution will be made to Avista's charitable foundation. No
approval from any regulatory bodies with jurisdiction over the Commitments is
Idaho Settlement Proposal - Master List of Commitments Page 5 of25
6.
7
4.
5.
8.
9
Exhibit A
required for any changes to this commitment from and after the sixth year following
closing; however any such changes will continue to require a two-thirds (213) vote of
the Avista Board. Avista agrees it will endeavor, over time, to distribute this annual
budget across the service territory in proportion to each state's portion of the system;2
Communitv Involvement: Avista will maintain at least Avista's existing levels of
community involvement and support initiatives in its service territories; including
involvement with low-income service agencies and support initiatives;
Economic Development: Avista will maintain at least Avista's existing levels of
economic development, including the ability of Avista to spend operations and
maintenance funds3 to support regional economic development and related strategic
opportunities in a manner consistent with Avista's past practices;
14.Membership Oreanizations: Avista will maintain the dues paid by it to various
industry trade groups and membership organizations; and
Safetv and Reliabilitv Standards and Service Oualitv Measures: Avista has
established Service Quality Performance Standards, Customer Guarantees and a
Service Quality Measure Report Card for its customers in Washington. Avista is
currently working with the Idaho Commission Staff to develop similar performance
standards, customer guarantees and a reporting mechanism for its customers in Idaho.
Following Idaho Commission approval of such standards, customer guarantees and a
reporting mechanism, Avista will not seek, and Hydro One agrees Avista will not
seek, to remove or reduce any associated penalty provisions for ten (10) years after
the date of the merger.
Rate Commitments
Treatment of Net Cost Savings: Any net cost savings that Avista rnay achieve as a
result of the Proposed Transaction will be reflected in subsequent rate proceedings, as
such savings materialize. To the extent the savings are reflected in base retail rates
they will offset the Rate Credit to customers, up to the offsetable portion of the Rate
Credit.
17. Treatment of Transaction Costs:
2 Note that Commitment 61 contains an additional commitment relating to charitable conffibutions; pursuant to that
commitment Hydro One will cause Avista to make a one-time contribution of $7,000,000 to Avista's charitable
foundation at or promptly following closing of the Proposed Transaction.
3 Operations and maintenance funds dedicated to economic development and non-utility strategic opportunities will
be recorded below-the-line to a nonoperating account.
Idaho Settlement Proposal - Master List of Commitments Page 6 of25
12.
13.
15.
16.
Exhibit A
a. Costs associated with the Proposed Transaction will be separately tracked as non-
utility costs with no charges, either allocated or direct, to be recovered from
Avista customers. After the consummation of the Proposed Transaction, any
remaining transaction costs or other costs of Olympus Holding Corp. or Hydro
One will not appear on Avista's utility books, i.e. such costs will be recorded as
non-utility. Avista shall fumish the Commission with journal entries and
supporting detail showing the nature and amount of all costs of the Proposed
Transaction (including but not limited to management time, BOD time, in-house
and outside counsel time, any consultants engaged, etc.) since the Proposed
Transaction was first contemplated, as well as the accounts charged, within 120
days of a Commission order in this docket.
b. Avista will exclude, and Hydro One agrees Avista will exclude, from Avista
general rate cases, or any other method of cost recovery, all costs related to the
Proposed Transaction including but not limited to: (i) all legal work from in-house
counsel and outside counsel; (ii) any financial advisory fees associated with the
Proposed Transaction; (iii) the acquisition premium; (iv) costs related to M&A
consulting and advice (v) preparation of and materials for presentations relating to
the Proposed Transaction (vi) any senior executive compensation or any Avista
board of director time tied to a change of control of Avista; and (vii) any other
costs directly related to the Proposed Transaction.
c. Technology expenditures and investments related to software and hardware
compatibility issues between Avista and Hydro One and its affiliates shall not be
recovered from Idaho ratepayers except to the extent such costs are offset by
savings over time.
18. Travel Expenses: Avista's corporate travel expenses recovered in rates, including
variable costs of flying the Avista corporate jet and commercial travel for all directors
and executives, shall not exceed 105% of 2017 expenses, adjusted annually for
inflation.
19. Rate Credits:
Avista and Hydro One are proposing to flow through to Avista's retail customers in
Idaho a Rate Credit of approximately $15.8 milliona over a 5-yearperiod, beginning
at the time the merger closes.
4 The exact agreed-upon figure is $15,811,050, which is equal to 5% ofthe Idaho base revenue as of02101/18.
Idaho electric base revenue is $259,473,000, and Idaho natural gas base revenue (including natural gas costs -
Schedules 150/155) is $56,748,000. Five percent of those revenues are $12,973,650 (electric) and $2,837,400
(natural gas).
Idaho Settlement Proposal - Master List of Commitments PageT of25
Exhibit A
Rate Credit Proposal
Idaho Annual
Credit Years 1-5 Idaho Total Credit
Total Credit $3.2 Million $15.8 Million
Offsetable Credit $527,510 $2.6 Million
The Total Rate Credit to customers for the five years following the closing will be
approximately $3.2 millions per year. A portion of the annual total Rate Credit will
be offsetable, in the amount of $527,5106. During the 5-year period the financial
benefits will be flowed through to customers either through the separate Rate Credit
described above or through a reduction to the underlying cost of service as these
benefits are reflected in the test period numbers used fbr ratemaking. At the time of
the close, the $3.2 million benefit will be provided to customers through a separate
Rate Credit, as long as the reduction in costs (of up to $527,510 annually) has not
already been reflected in base retail rates for Avista's customers.
To the extent Avista demonstrates in a future rate proceeding that cost savings, or
benefits, directly related to the Proposed Transaction are already being flowed
through to customers through base retail rates, the separate Rate Credit to customers
would be reduced by an amount up to the offsetable Rate Credit amount. The portion
of the total Rate Credit that is not offsetable effectively represents acceptance by
Hydro One of a lower rate of return during the 5-year period.
The $15.8 million represents the "floor" of benefits that will be flowed through to
Avista's customers, either through the Rate Credit or through benefits otherwise
included in base retail rates. To the extent the identifiable benefits exceed the annual
offsetable Rate Credit amounts, these additional benefits will be flowed through to
customers in base retail rates in general rate cases as they occur. Avista and Hydro
One believe additional efficiencies (benefits) will be realized over time from the
sharing of best practices, technology and innovation between the two companies. It
will take time, however, to identify and capture these benefits. The level of annual
net cost savings (and/or net benefits) will be tracked and reported on an annual basis,
and compared against the offsetable level of savings.
5 The exact amount agreed upon is $3,1 62,2 l0 per year. The annual Idaho electric Rate Credit for each of the five
years is $2,594,'130. The annual Idaho natural gas Rate Credit for each of the five years is $567,480.
6 The offsetable portion of the Rate Credit is calculated using a pro rata share of the jurisdictional total of the rate
credit (i.e. Idaho's share of the total system offsetable Rate Credit is 31.03%, therefore Idaho's share of the $1.7
million offsetable portion is $527,510).
Idaho Settlement Proposal - Master List of Commitments Page 8 of25
Exhibit A
Any application of offsetable savings will be reviewed by the Commission before the
offset is applied, and Avista bears the burden of proof to prove that savings have
materialized and the offset to rate credits should apply.
Regulatory Commitments
20. State Resulatorv Authority and Jurisdiction: Hydro One and its subsidiaries,
including Avista, as applicable and as appropriate, will comply with all applicable
laws, including those pertaining to transfers of property, affiliated interests, and
securities and the assumption of obligations and liabilities. As required by and
consistent with applicable laws, venue for resolution of proceedings related to these
matters will be at the appropriate state utility commission(s). Hydro One and its
subsidiaries, including Avista, will make their employees and officers available to
testify before the Commission at the Commission's request to provide information
relevant to the matters within its jurisdiction.
21.Compliance with Existins Commission Orders: Hydro One and its subsidiaries,
including Avista, acknowledge that all existing orders issued by the Commission with
respect to Avista or its predecessor, Washington Water Power Co., will remain in
effect, and are not modified or otherwise affected by the Proposed Transaction.
Hydro One and its subsidiaries, including Avista, as applicable and as appropriate,
will comply with all applicable future Commission orders that remain in force.
Separate Books and Records: Avista will maintain separate books and records from
its affiliates.
Access to and Maintenance of Books and Records: Hydro One, Olympus Holding
Corp. and its subsidiaries, including Avista, will provide reasonable access to
Avista's books and records; access to financial information and filings; access rights
with respect to the documents supporting any costs that may be allocable to Avista;
and access to Avista's board minutes, audit reports, and information provided to
credit rating agencies pertaining to Avista.
Hydro One, Olyrnpus Holding Cory. and its subsidiaries, including Avista, will
maintain the necessary books and records so as to provide documents relating to all
corporate, affiliate, or subsidiary transactions with Avista, or that result in costs that
may be allocable to Avista.
The Proposed Transaction will not result in reduced access to the necessary books
and records that relate to transactions with Avista, or that result in costs that may be
allocable to Avista. Avista will provide Commission Staff and other parties to
regulatory proceedings reasonable access to books and records (including those of
Hydro One, Olympus Holding Corp. or any affiliate or subsidiary companies)
required to verify or examine transactions with Avista, or that result in costs that may
be allocable to Avista.
Idaho Settlement Proposal- Master List of Commitments Page 9 of25
)",
23.
Exhibit A
Nothing in the Proposed Transaction will limit or affect the Commission's rights with
respect to inspection of Avista's accountso books, papers and documents in
compliance with all applicable laws. Nothing in the Proposed Transaction will limit
or affect the Commission's rights with respect to inspection of Hydro One and
Olympus Holding Corp.'s accounts, books, papers and documents pursuant to all
applicable laws; provided, that such right to inspection shall be limited to Hydro One
and Olympus Holding Corp.'s accounts, books, papers and documents that pertain
solely to transactions affecting Avista's regulated utility operations.
Olympus Holding Corp. and its subsidiaries, including Avista, will provide the
Commission with access to written information provided by and to credit rating
agencies that pertains to Avista. Olympus Holding Corp. and each of its subsidiaries
will also provide the Commission with access to written information provided by and
to credit rating agencies that pertains to Olympus Holding Corp.'s subsidiaries to the
extent such information may affect Avista.
Hydro One and its affiliates agree that the Commission may have access to all the
accounting records of Hydro One and its affiliates that are the bases for charges to
Avista, to determine the reasonableness of the costs and the allocation factors used by
Hydro One and its affiliates, or its subdivisions to assign costs to Avista and amounts
subject to allocation or direct charges. Hydro One and its affiliates agree that they
will not raise lack of jurisdiction as a means of denying such access, and agree to
cooperate fully with such Commission investigations.
Cost Allocations Related to Corporate Structure and Afliliate Interests: Avista
agrees to provide, and Hydro One agrees Avista will provide, cost allocation
methodologies used to allocate to Avista any costs related to Hydro One or its other
affiliates and subsidiaries, and commits that there will be no cross-subsidization by
Avista customers of unregulated activities.
The cost-allocation methodology provided pursuant to this commitment will be a
generic methodology that does not require Commission approval prior to it being
proposed for specific application in a general rate case or other proceeding affecting
rates. The cost-allocation methodology provided pursuant to this commitment also
will establish a procedure for ensuring that additional costs or revenues resulting from
changing cuffency exchange rates will not be reflected in rates charged to Idaho
customers.
Avista will bear the burden of proof in any general rate case that any corporate and
affiliate cost allocation methodology is reasonable for ratemaking purposes. Neither
Avista nor Hydro One or its affiliates and subsidiaries will contest the Commission's
authority to disallow, for retail ratemaking purposes in a general rate case,
unreasonable, or misallocated costs from or to Avista or Hydro One or its other
affiliates and subsidiaries.
Idaho Settlement Proposal- Master List of Commitments Page l0 of25
24.
Exhibit A
With respect to the ratemaking treatment of affiliate transactions affecting Avista,
Hydro One, and Olympus Holding Corp. and its subsidiaries, as applicable, will
comply with the Commission's then-existing practice; provided, however, that
nothing in this commitment limits Avista from also proposing a different ratemaking
treatment for the Commission's consideration, or limit the positions any other party
may take with respect to ratemaking treatment.
Avista will notify the Commission of any change in corporate structure that affects
Avista's corporate and affiliate cost allocation methodologies. Avista will propose
revisions to such cost allocation methodologies to accommodate such changes.
Avista will not take the position that compliance with this provision constitutes
approval by the Commission of a particular methodology for corporate and affiliate
cost allocation.
Avista will notify the Commission prior to the implementation of plans by Avista or
Hydro One or any of Hydro One's affiliates:
a. To form an affiliate for the purposes of transacting business with Avista's
regulated operations;
b. To commence new business transactions between an existing affiliate and Avista;
or
c. To dissolve an affiliate that has transacted substantial business with Avista.
Ratemaking Cost of Debt and Equity: Avista will not advocate for, and Hydro One
agrees Avista will not advocate for, a higher cost of debt or equity capital as
compared to what Avista's cost of debt or equity capital would have been absent
Hydro One's ownership.
For future ratemaking purposes:
a. Determination of Avista's debt costs will be no higher than such costs would have
been assuming Avista's credit ratings by at least one industry recognized rating
agency, including, but not limited to, S&P, Moody's, Fitch or Morningstar, as
such ratings in effect on the day before the Proposed Transaction closes and
applying those credit ratings to then-current debt, unless Avista proves that a
lower credit rating is caused by circumstances or developments not the result of
financial risks or other characteristics of the Proposed Transaction;
b. Avista bears the burden to prove prudent in a future general rate case any pre-
payment premium or increased cost of debt associated with existing Avista debt
retired, repaid, or replaced as a part of the Proposed Transaction; and
c. Determination of the allowed return on equity in future general rate cases will
include selection and use of one or more proxy group(s) of companies engaged in
25
Idaho Settlement Proposal - Master List of Commitments Page 1l of25
Exhibit A
businesses substantially similar to Avista, without any limitation related to
Avista's ownership structure.
Avista Capital Structure: At all times following the closing of the Proposed
Transaction, Avista's actual common equity ratio will be maintained at a level no less
than 44 percent. This commitment does not restrict the Commission from ordering a
hypothetical capital structure.
FERC Renorting Requirements: Avista will continue to meet all the applicable
FERC reporting requirements with respect to annual and quarterly reports (e.g.,
FERC Forms l, 2, 3q) after closing of the Proposed Transaction.
Particination in National and Regional Forums: Avista will continue to
participate, where appropriate, in national and regional forums regarding transmission
issues, pricing policies, siting requirements, and interconnection and integration
policies, when necessary to protect the interest of its customers.
29. Treatment of Confidential Information: Nothing in these commitments will be
interpreted as a waiver of Hydro One's, its subsidiaries', or Avista's rights to request
confidential treatment of information that is the subject of any of these commitments.
30. Commission Enforcement of Commitments: Hydro One and its subsidiaries,
including Avista, understand that the Commission has authority to enforce these
commitments in accordance with their terms. If there is a violation of the terms of
these commitments, then the offending party frdy, at the discretion of the
Commission, have a period of thirty (30) calendar days to cure such violation.
The scope of this commitment includes the authority of the Commission to compel
the attendance of witnesses from Olympus Holding Corp. and its affiliates, including
Hydro One, with pertinent information on matters affecting Avista. Hydro One and
Olympus Holding Corp. and its subsidiaries waive their rights to interpose any legal
objection they might otherwise have to the Commission's jurisdiction to require the
appearunce of any such witnesses.
31. Submittal to State Court Jurisdiction for Enforcement of Commission Orders:
Hydro One, Olympus Holding Corp., and Avista will jointly file with the
Commission prior to closing the Proposed Transaction an affidavit affirming that they
will submit to the jurisdiction of the relevant state courts for enforcement of the
Commission's orders adopting the commitments made by and binding upon them and
their affiliates where noted, and subsequent orders affecting Avista.
32.Annual Report on Commitments: By May l, 2019 and each May 1 thereafter
through May 1, 2029, Avista will file, and Hydro One agrees Avista will file, a report
with the Commission regarding the status of compliance with each of the
commitments as of December 31 of the preceding year. The report will, at a
minimum, provide a description of the performance of each of the commitments, will
Idaho Settlement Proposal - Master List of Commitments Page 12 of 25
26
27.
28.
Exhibit A
be filed in Case No. AVU-E-I7-09/AVU-G-17-05 and served to all parties to the
docket. If any commitment is not being met, relative to the specific terms of the
commitment, the report must provide proposed corrective measures and target dates
for completion of such measures. Avista will make publicly available at the
Commission non-confidential portions of the report.
Commitments Binding: Hydro One, Olympus Holding Corp. and its subsidiaries,
including Avista, acknowledge that the commitments being made by them are binding
only upon them and their affiliates where noted, and their successors in interest.
Hydro One and Avista are not requesting in this proceeding a determination of the
prudence, just and reasonable character, rate or ratemaking treatment, or public
interest of the investments, expenditures or actions referenced in the commitments,
and the parties in appropriate proceedings may take such positions regarding the
prudence, just and reasonable character, rate or ratemaking treatment, or public
interest of the investments, expenditures or actions as they deem appropriate.
If Hydro One or any other entity in the chain of Avista's ownership determines that
Avista or any other entity has failed to comply with an applicable Commitment, the
entity making such determinations shall take all appropriate actions to achieve
compliance with the Commitment.
Financial Integrity Commitments
34. Capit@H ydro One will provide equity to support Avista's
capital structure that is designed to allow Avista access to debt financing under
reasonable terms and on a sustainable basis.
35.Utilitv-Level Debt and Preferred Stock: Avista will maintain separate debt and
preferred stock, if any, to support its utility operations.
36. Continued teredlt R4[ingsl Each of Hydro One and Avista will continue to be rated
by at least one nationally recognized statistical "Rating Agency." Hydro One and
Avista will use reasonable best efforts to obtain and maintain a separate credit rating
for Avista from at least one Rating Agency within the ninety (90) days following the
closing of the Proposed Transaction. If Hydro One and Avista are unable to obtain or
maintain the separate rating for Avista, they will make a filing with the Commission
explaining the basis for their failure to obtain or maintain such separate credit rating
for Avista, and parties to this proceeding will have an opportunity to participate and
propose additional commitments.
37 Credit Ratings Notification: Hydro One and Avista agree to notify the Commission
within two business days of any downgrade of Avista's credit rating to a non-
investment grade status by S&P, Moody's, or any other such ratings agency that
issues such ratings with respect to Avista.
38. Restrictions on Upward Dividends and Distributions:
Idaho Settlement Proposal - Master List of Commitments Page 13 of25
33.
Exhibit A
If either (i) Avista's corporate credit/issuer rating as determined by both Moody's
and S&P, or their successors, is investment grade, or (ii) the ratio of Avista's
EBITDA to Avista's interest expense is greater than or equal to 3.0, then
distributions from Avista to Olympus Equity LLC shall not be limited so long as
Avista's equity ratio is equal to or greater than 44 percent on the date of such
Avista distribution after giving effect to such Avista distribution, except to the
extent the Commission establishes a lower equity ratio for ratemaking purposes.
Both the EBITDA and equity ratio shall be calculated on the same basis that such
calculations would be made for ratemaking purposes for regulated utility
operations.
b. Under any other circumstances, distributions from Avista to Olympus Equity LLC
are allowed only with prior Commission approval.
c. If Avista does not have an investment-grade rating from both Moody's and S&P,
or from one of these entities, or its successor, if only one issues ratings with
respect to Avista, and the ratio of EBITDA to Avista's interest expense is less
than 3.0, no dividend distribution to Olympus Equity LLC or its successors will
occur.
Pension Fundinq: Avista will maintain its pension funding policy in accordance
with sound actuarial practice. Hydro One will not seek to change Avista's pension
funding policy.
SEC Reportinq Requirements: Following the closing of the Proposed Transaction,
Avista will file required reports with the SEC.
Compliance with the Sarbanes-Oxlev Act: Following the closing of the Proposed
Transaction, Avista will comply with applicable requirements of the Sarbanes-Oxley
Act.
Ring-Fencing Commitments
42. Golden Share Entering into voluntary bankruptcy shall require the affirmative vote
of a "Golden Share" of Avista stock. The Golden Share shall mean the sole share of
Preferred Stock of Avista as authorized by the Commission. This share of Preferred
Stock must be in the custody of an independent third-party, where the third-party has
no financial stake, affiliation, relationship, interest, or tie to Avista or any of its
affiliates, or any lender to Avista, or any of its affiliates. This requirement does not
preclude the third-party from holding an index fund or mutual fund with negligible
interests in Avista or any of its affiliates. In matters of voluntary bankruptcy, this
Golden Share will override all other outstanding shares of all tlpes or classes of
stock.
Independent Directors: At least one of the nine members of the board of directors
of Avista will be an Independent Director who, consistent with Commitment 3, meets
a
39.
40.
41.
43
Idaho Settlement Proposal - Master List of Commitments Page 14 of25
Exhibit A
the standards under 303A.02 of the New York Stock Exchange Listed Company
Manual. At least one of the members of the board of directors of Olympus Equity
LLC will be an lndependent Director who, consistent with Commitment 3, meets the
standards under 303A,02 of the New York Stock Exchange Listed Company Manual.
The same individual may serve as an Independent Director of both Avista and
Olympus Equity LLC. The organizational documents for Avista will not permit
Avista, without the consent of a two-thirds majority of all its directors, including the
affirmative vote of the Independent Director at Avista (or if at that time Avista has
more than one Independent Director, the affirmative vote of at least one of Avista's
Independent Directors), to consent to the institution of bankruptcy proceedings or the
inclusion of Avista in bankruptcy proceedings. In addition to an affirmative vote of
this Independent Director, the vote of the Golden Share shall also be required for
Avista to enter into a voluntary bankruptcy.
44. Non-Consolidation Opinion:
a. Within ninety (90) days of the Proposed Transaction closing, Avista and Olympus
Holding Corp. will file, and Hydro One agrees they will file, a non-consolidation
opinion with the Commission which concludes, subject to customary assumptions
and exceptions, that the ring-fencing provisions are sufficient that a bankruptcy
court would not order the substantive consolidation of the assets and liabilities of
Avista with those of Olympus Holding Corp. or its affiliates or subsidiaries (other
than Avista and its subsidiaries).
b. Hydro One and Olympus Holding Corp. must file an affidavit with the
Commission stating that neither Hydro One, Olympus Holding Corp. nor any of
their subsidiaries, will seek to include Avista in a bankruptcy without the consent
of a two-thirds majority of Avista's board of directors including the affirmative
vote of Avista's independent director, or, if at that time Avista has more than one
independent director, the affirmative vote of at least one of Avista's independent
directors.
If the ring-fencing provisions in these commitments are not sufficient to obtain a
non-consolidation opinion, Olympus Holding Corp. and Avista agree to promptly
undertake, and Hydro One agrees to cause them to undertake, the following
actions:
Notify the Commission of this inability to obtain a non-consolidation
opinion.
ii. Propose and implement, upon Commission approval, such additional ring-
fencing provisions around Avista as are sufficient to obtain a non-
consolidation opinion subject to customary assumptions and exceptions.
iii. Obtain a non-consolidation opinion.
Idaho Settlement Proposal - Master List of Commitments Page I 5 of25
c
Exhibit A
45 Olvmpus Eouitv LLC: Olympus Holding Corp.'s indirect subsidiaries will include
Olympus Equity LLC and Avista. See the post-acquisition organizational chart in
Attachment C to the Master List of Commitments in Idaho. Following closing of the
Proposed Transaction, all of the common stock of Avista will be owned by Olympus
Equity LLC, a new Delaware limited liability company. Olyrnpus Equity LLC will be
a bankruptcy-remote special purpose entity, and will not have debt.
46.Restriction on Pledee of Utilitv Assets: Avista agrees to, and Hydro One will cause
Avista to agree to, prohibitions against loans or pledges of utility assets to Hydro
One, Olympus Holding Corp., or any of their subsidiaries or affiliates, without
Commission approval. In addition, the Applicants agree that Avista's assets will not
be pledged by Avista or any of its affiliates, including Hydro One and Olympus
Holding Corp. and any of their subsidiaries or affiliates, for the benefit of any entity
other than Avista.
47. Hold Harmless; Notice to Lenders: Restriction on Acquisitions and Dispositions:
a. Hydro One, its affiliates, and subsidiaries including Avista will hold Avista
customers harmless from any business and financial risk exposures associated
with Olympus Holding Corp., Hydro One, and Hydro One's other affiliates.
b. Pursuant to this commitment, Avista will file, and Hydro One agrees Avista will
file, with the Commission, prior to closing of the Proposed Transaction, a form of
notice to prospective lenders describing the ring-fencing provisions included in
these commitments stating that these provisions provide no recourse to Avista
assets as collateral or security for debt issued by Hydro One or any of its
subsidiaries, other than Avista.
c. In furtherance of this commitment:
i. Hydro One, its affiliates, and subsidiaries including Avista commit that
Avista's regulated utility customers will be held harmless from the liabilities
of any unregulated activity of Avista or Hydro One and its affiliates. In any
proceeding before the Commission involving rates of Avista, the fair rate of
return for Avista will be determined without regard to any adverse
consequences that are demonstrated to be attributable to unregulated
activities. Measures providing for separate financial and accounting
treatment will be established for each unregulated activity.
1l Hydro One, its affiliates, and subsidiaries including Avista will notify the
Commission subsequent to Hydro One's, its affiliates', or subsidiaries'
including Avista's board approval and as soon as practicable following any
public announcement of: (l) any acquisition by Hydro One, its affiliates,
and subsidiaries including Avista of a regulated or unregulated business that
is equivalent to five (5) percent or more of Hydro One's capitalization; or
(2) any change in control or ownership of Avista, except that the notice of a
Idaho Settlement Proposal - Master List of Commitments Page 16 of25
Exhibit A
change to the upstream ownership of Avista or OlSrmpus Holding Corp.
among wholly owned subsidiaries of Hydro One may be provided in either
an updated organizational chart included in the annual report filing
described in Commitment 32 or in a separate notice filing. Notice pursuant
to this provision is not and will not be deemed an admission or expansion of
the Commission's authority or jurisdiction over any transaction or in any
matter or proceeding whatsoever.
Within sixty (60) days following the notice required by this subsection
(cXiiX2), Avista and Olympus Holding Corp. or its affiliates, as appropriate,
will seek Commission approval of any sale or transfer of any material part
of Avista, or of any transaction or series of transactions, regardless of size,
that would result in a person or entity, other than a wholly owned subsidiary
of Hydro One, directly or indirectly, acquiring a controlling interest in
Avista or Olympus Holding Corp. The term "material part of Avista" means
any sale or transfer of stock representing ten percent (10%) or more of the
equity ownership of Avista,
iii. Hydro One, Olympus Holding Corp. and Avista will provide notification of
and file for Commission approval of the divestiture, spin-off, or sale of any
integral Avista asset, including power plants, as required by ldaho Code
$61-328. This notification and approval requirement does not limit any
jurisdiction that the Commission may have.
iv. Neither Avista nor Hydro One will assert in any future proceedings that, by
virrue of the Proposed Transaction and the resulting corporate structure, the
Commission is without jurisdiction over any transaction that results in a
change of controlof Avista.
d. If and when any subsidiary of Avista becomes a subsidiary of Hydro One or one
of its subsidiaries other than Avista, Avista and Hydro One will so advise the
Commission within thirry (30) days and will submit to the Commission a written
document setting forth Avista's proposed corporate and affiliate cost allocation
methodologies.
48. Olympus Holdine Corp. and Olru Equitv LLC Sub-entitie*Olympus
Holding Corp. will not operate or own any business and will limit its activities to
investing in and attending to its shareholdings in Olympus Equity LLC, which, in
turn, will not operate or own any business and will limit its activities to investing in
and attending to its shareholdings in Avista.
49.No Amendment of Ring-Fencing Provisions: Hydro One, Olympus Holding Corp.
and Avista commit that no material amendments, revisions or modifications will be
made to the ring-fencing provisions as specified in these regulatory commitments
without prior Commission approval pursuant to a limited re-opener for the sole
purpose of addressing the ring-fencing provisions.
Idaho Settlement Proposal - Master List of Commitments Page l7 of25
Exhibit A
50.No Inter Companv Debt: Avista will notify the Commission before entering into
any inter-company debt transactions with Olympus Holding Co.p., Hydro One, or any
of their subsidiaries or affiliates. Avista shall comply with Idaho Code $61-901, et
seq. for any debt transactions over a one year term.
51.No Inter Companv Lending: Without prior Commission approval, Avista will not
lend money to Olympus Holding Co.p., Hydro One, or any of their subsidiaries or
affiliates.
Resource Planning Commitments
52. Renewable Energv Resources: Avista will continue to offer renewable power
programs in consultation with stakeholders.
Communications with customers shall accurately reflect the environmental attributes
associated with power delivered to such custorners. Hydro One and Avista
acknowledge that Avista retains the burden of proof to demonstrate the prudence of
any resource acquisition.
Nothing in this Commitment prohibits Avista from selling renewable energy credits
that arise from resources included in base rates applicable in Idaho.
Hydro One acknowledges Avista's obligations under applicable renewable portfolio
standards, and Avista will continue to comply with such obligations.
53 Regulatorv Integrated Resource Planning (IRP) Sideboards: Avista and its
affiliates agree to consider in all resource planning and acquisition efforts both
demand-side and renewable energy resources that are consistent with the Idaho
Commission's resource evaluation and acquisition rules and policies.
Avista and its affiliates agree that "Resources" to be considered in all IRPs include
Power Purchase Agreements ("PPAs").
Avista commits to calculating a variable generation resource's contribution to
capacity in terms of that resource's contribution to resource adequacy and that
resource's ability to reduce the loss of load probability in some or all hours or days
utilizing the Effective Load Carrying Capability ("ELCC") methodology or an
appropriate approximation.
Avista will work with an independent third-party consultant, with expertise in
renewable energy resources, to ensure that the utility has up-to-date resource cost and
performance assumptions, as well as the appropriate learning curves, for use in the
2019 IRP process.
Unless it conflicts with any instructions contained in the Commission's
acknowledgement letter in response to Avista's current integrated resource plan
(IRP), beginning with the next IRP, Avista commits to modeling a range of potential
Idaho Settlement Proposal- Master List of Commitments Page l8 of25
Exhihit A
costs for greenhouse gas emissions, and will work with its IRP Advisory Group to
determine the appropriate values to model.
54.Energy Imbalance Market (65EIM"): Avista is currently refreshing its EIM
analysis and will release it publicly by the end of 201 8. Avista commits to hold
workshops with the Commission and interested stakeholders to review the analysis
and discuss the prudent next steps.
The goal is to convene the workshop within 30 days of the release of the EIM
analysis.
55.Transport Electrification: Avista commits, and Hydro One agrees that Avista
commits, to initiate a stakeholder process within 60 days of the close of the Proposed
Transaction to explore opportunities for transport electrification that benefits all Idaho
customers.
Environmental Commitments
56.Greenhouse Gas and Carbon Initiatives: Hydro One acknowledges Avista's
Greenhouse Gas and Carbon Initiatives contained in its current Integrated Resource
Plan, and Avista will continue to work with interested parties on such initiatives.
57. GreenLouse GaS Invenloty Report: Avista will report greenhouse gas emissions as
required.
Energy Efficiency, Weatherization, Community and Low-Income Assistance Commitments
58.Funding for Energv Efficiencv. Weatherization. Conservation. and Low-Income
Assistance Programs: Hydro One will arrange funding of $5,308,847 over a l0-year
period to fund energy efficiency, weatherization, conservation, and low-income
assistance programs. The funding will be disbursed as directed by the Energy
Efficiency, Weatherization, Conservation, and Low-Income Assistance Committee
("EWCL"), a new committee of stakeholders tasked with determining which existing
or new programs should receive this funding to address energy efficiency,
weatherization, conservation, and low-income needs in Avista's Idaho service
territory. The committee will initially consist of representatives from the following
stakeholders: Avista, Commission staff, the Lewiston CAP, Idaho Conservation
League, the Idaho Forest Group, and Clearwater Paper. The Committee may add
members at its discretion. The EWCL will consider the needs of all parties and
remain flexible on the timing of any disbursements.
The EWCL will convene within 90 days after the close of the Proposed Transaction,
will present a l0-year funding plan to Avista by June l, 2019 and will revise this plan
periodically as needed.
Idaho Settlement Proposal - Master List of Commitments Page l9 of25
59.
60.
Exhibit A
Clearwater Paper DSM Assistance: Avista agrees to work with Clearwater Paper to
attempt to qualify the following projects for DSM funding under Tariff Schedule 90,
upon closing of the Proposed Transaction:
. Variable speed drives on the No. 1 paper machine hydropulper. Variable speed drives on the No. 4 power boiler demineralized water pumps. Energy efficient chillers and compressors for the Lurgi system. A variable speed drive on the No.1 paper machine white water system. Variable speed drives on the two waste water outfall pumps
The total estimated cost of the projects is $750,000. Tariff Schedule 90 allows for
possible DSM funding of up to 70o/o of the cost of the project, subject to meeting
certain specified cost-effectiveness criteria. The portion of the estimated cost of these
identified projects that is not reimbursed under Schedule 90 will be considered fbr
funding through Commitment 58. The EWCL will consider the needs of all parties
and remain flexible on the timing of any disbursements.
Idaho Forest Groun OFG) DSM Assistance: Avista agrees to work with Idaho
Forest Group (IFG) to attempt to qualify the following projects for DSM funding
under Tariff Schedule 90, upon closing of the Proposed Transaction:
a
a
Installation of information technology to gather plant information data (PI
Data) on energy usage at IFG's Lewiston plant, and through an installed
interface, transmit real time energy load information data for each operating
station to IFG and Avista. This may serve as a useful demonstration project
for data interfaces with other customers on Avista's system. The total
estimated cost is $300,000.
Replacement of aging compressors, saws and other equipment with state of
the art machinery at IFG's Lewiston and Grangeville plants, in order to
increase productivity and energy efficiency.
Tariff Schedule 90 allows for possible DSM funding of up to 70oh of the cost of the
project, subject to meeting certain specified cost-effectiveness criteria. The portion
of the estimated cost of these identified projects that is not reimbursed under
Schedule 90 will be considered for funding through Commitment 58. The EWCL
will consider the needs of all parties and remain flexible on the timing of any
disbursements.
Idaho Settlement Proposal - Master List of Commitments Page2} of25
Exhibit A
Communitv Contributions: Hydro One will cause Avista to make a one-time
$7,000,000 contribution to Avista's charitable foundation at or promptly following
closing.T
Addressing Other Low-Income Customer Issues: Avista will continue to work
with low-income agencies to address other issues of low-income customers, including
funding for bill payment assistance.
Fee Free Pavment Program: Avista will continue to offer the Fee Free Payment
Program to its residential customers.
Improve Penetration of Low-Income Proqrams: Hydro One and Avista will work
with the Lewiston CAP to undertake a targeted effort with a goal of improving the
penetration rate of low-income programs with a focus on underserved, vulnerable,
and high energy burden households. This commitment may include expanding
marketing, outreach, and data analysis as appropriate.
Tribal Communities: In implementing these conditions, Avista will reach out to
tribal communities to encourage participation of members of such communities in
receiving the benefits of this settlement.
Miscellaneous Commitments
Sources of Funds for Hvdro One Commitments: Throughout this list of merger
commitments, any commitment that states Hydro One will arrange funding is not
contingent on Hydro One's ability to arrange funding, particularly from outside
sources, but is a firm commitment to provide the dollar amount specified over the
time period specified and for the purposes specified. To the extent Avista has retained
earnings that are available for payment of dividends to Olympus Equity LLC
consistent with the ring fencing provisions of this list of merger commitments, such
retained earnings may be used. Funds available from other Hydro One affiliates may
be used without limitation. Avista will not seek cost recovery for any of the
commitments funded or arranged by Hydro One in this list of merger commitments.
Hydro One will not seek cost recovery for such funds from ratepayers in Canada or
the United States.
67 Service Rules for Gas Utilities: Avista will meet with Commission Staff to review
the Commission's Service Rules for Gas Utilities (IDAPA 31.31.01) to determine
which provisions should be retained and/or modified, and, if the participants agree,
incorporate those changes into Avista's tariff.
i Note that Commitment 1l contains additional provisions relating to Avista's charitable contributions.
61.
62.
63.
64.
b5.
66
Idaho Settlement Proposal- Master List of Commitments PageZl of25
68.
69.
Exhibit A
Meters: Avista will meet with Commission Staff to review its meter placement and
protection policies and practices and determine, if the participants agree, what
additional steps should be taken to revise Avista's current policies and practices.
Colstrip Planning: Hydro One and Avista agree to support a December 31,2027 ,
end of life for depreciation purposes in the processes described below. Hydro One
and Avista also agree that issues relating to the potential accelerated depreciation of
Avista's interest in Colstrip Units 3 and 4 and related matters should be addressed in
three existing, interrelated Commission proceedings as follows:
GNR-U-18-01 -- Investigation Into the Impact o.f Federal Tax Code Revisions
on Utility Costs and Ratemaking.' As part of this docket, not less than $12.0
Million regulatory liability should be created using the unprotected Excess
DFIT/Deferral of January - May 2018 tax credit. The Commission Staff
anticipates resolution of this proceeding by June 1,2018. This $12.0 Million
regulatory liability would then be available to offset costs associated with
accelerated depreciation of Colstrip Units 3 and 4 or other use as determined
appropriate in AVU-E- I 8-03iAVU-G- I 8-02.
a
a
a
AVU-E-18-03 / AVU-G-18-02 -- Avista Corporation's Application to Change
Its Electric and Natural Gas Depreciation Rates: As part of this docket, the
Commission will determine whether, as proposed by.Hydro One and Avista,
December 31,2027, should be set as the "useful life" for Colstrip Units 3 and
4 for depreciation purposes. The Parties will work towards resolution of this
proceeding by January l, 2019.
Avista's Application 2019 Electric Integrated Resource Plan (IRP): Avista's
2019 IRP will analyze multiple retirement dates for Colstrip Units 3 and 4,
including but not limited to, the "end of useful life" date determined in AVU-
E-18-03/AVU-G-18-02. The other retirement dates analyzed, as well as the
method, inputs, and assumptions for those scenarios planning analyses, will be
determined with input from the IRP stakeholder advisory group. Avista
anticipates that the first draft of its 2019IRP will be released in May 2019 and
its second draft will be released in August 2019.
Montana Communi8 Transition Fund: Hydro One and Avista will arrange
funding of $3.0 Million (on a system basis) towards a Colstrip community transition
fund.
Colstrip Transmission Planning: Avista will work with the other Path 8 (MT-to-
NW) owners (Northwestern Energy and BPA) to resolve questions surrounding the
ability of new generation to use the Colstrip line once Colstrip Units I and 2 retire,
and also when Units 3 and4 retire.
At least one year prior to any closure of Colstrip Units 3 and 4, Avista will develop a
transition plan for its Colstrip transmission assets. Avista will hold at least one
Idaho Settlement Proposal- Master List of Commitments Page22 of25
70.
71.
Exhibit A
workshop with Commission Staff and stakeholders to determine the transition plan's
impacts to Idaho ratepayers.
Avista will work with stakeholders and Commission Staff and file this transition plan
with the Commission. In developing this transition plan, to the extent practicable,
Avista should participate in 1) the workshops on this topic that PSE and the
Commission will be holding in 2018 (per the PSE GRC settlement), and 2) the
BPA/Governor Bullock Transmission Task Force that commenced work on
December 8,2017, and will work through the middle of 2018.
Hydro One agrees Avista will conduct the activities described in the foregoing
paragraphs.
72. Co Labor:The parties agree that employees, contractors, and subcontractors
of Avista shall be paid a fair and competitive wage, and that Avista shall utilize
principles of fairness in bidding and contracting work in the state of Idaho. Avista
agrees to employ highly skilled and trained workers. Such training and education can
be obtained through college programs, technical schools, apprenticeships, or union
hall programs, including those of the Washington and Northern Idaho District
Council of Laborers. The parties recognize that no employee, contractor, or
subcontractor of the Company is required or prohibited from participation in any
labor organization. The Parties agree that Commitment 72 is severable, and if this
provision is declared void, invalid, or unenforceable in whole or in part, such
declaration shall not affect the remaining provisions of this Commitment List.
73.Most Favored Nations: The Applicants agree that upon the joint request of the Non-
Applicant Parties, or a request of less than all Non-Applicant Parties which is
unopposed by any Non-Applicant, the Commission shall have an opportunity and the
authority to consider and adopt in Idaho any commitments to which the Applicants
agree in other jurisdictions, even if such commitments are agreed to after the
Commission enters its order in this docket. To facilitate the Commission's
consideration and possible adoption of the commitments from other jurisdictions, the
Parties recommend that the Commission issue an order accepting this Stipulation as
soon as practical, but to reserve in such order the explicit right to re-open to add
commitments accepted in another state jurisdiction.
The Applicants further agree that upon the request of any Non-Applicant Party prior
to the Commission's action on this Stipulation, if Applicants agree with any
commitments in other jurisdictions, within five days of such a request, Applicants
will meet and confer with the Non-Applicant Parties to discuss whether such
commitments should be added to the existing list of commitments already agreed to
by the Parties in this Stipulation.
Idaho Settlement Proposal- Master List of Commitments Page23 of25
Exhibit A
Process for Consideration :
Within five calendar days after Applicants file a stipulation with new or amended
commitments with a commission in another state jurisdiction, Applicants will send a
copy of the stipulation and commitments to the Non-Applicant Parties.
Within five calendar days after a commission in another state jurisdiction issues an
order that accepts a stipulation to which Applicants are a party and imposes new or
modified commitments, that order, together with all commitments of any type agreed
to by Applicants in such other state, will be filed with the Commission and served on
all parties to this docket by the most expeditious means practical.
Within ten calendar days after the last such filing from the other states ("Final
Filing"), the Non-Applicant Parties may file with the Commission any response they
wish to make, including their position as to whether any of the covenants,
commitments and conditions from the other jurisdictions (without modification of the
language thereof except such non-substantive changes as are necessary to make the
commitment or condition applicable to Idaho) should be adopted in Idaho.
a
a
a
a
a
a
a
a
a
Within five calendar days after any such response filing, the Applicants may file a
reply with the Commission.
If any of the dates above fall on Saturday, Sunday, or a holiday, the next business day
will be considered as the due date.
The Parties agtee to support in their filings the issuance by the Commission of an
order regarding the adoption of such commitments as soon as practical thereafter,
recognizing that the Proposed Transaction cannot close until final state orders have
been issued approving the Proposed Transaction.
Limitations on Adjustment:
Only commitments specific to gas service may form the basis for adjustments specific
to gas service.
Only commitments specific to electric service may form the basis for adjustments
specific to electric service.
Any commitments relating to support of communities in Montana are not subject to
this provision.
As Avista does not operate as a utility in Alaska, any commitments made in Alaska
are not subject to this provision.
For purposes of financial commitments or commitments having a financial impact,
commitments should be proportionate to Avista's corresponding business function in
Idaho Settlement Proposal - Master List of Commitments Page 24 of 25
a
a
Exhibit A
Idaho in relation to its corresponding total company business function. Accordingly,
commitments should be allocated among Avista's WA, ID and OR jurisdictions based
on the following: l) Rate Credit is allocated based on base revenues; 2) all other
financial commitments are allocated using the Company's jurisdictional "four factor"
allocation methodology, routinely employed for purposes of allocating common
costs, as discussed in Mr. Ehrbar's testimony in this proceeding. Forpurposes of this
provision, "financial commitments or commitments having a financial impact" do not
include ring fencing provisions,
Idaho Settlement Proposal- Master List of Commitments Page25 of25