20230213Colstrip Transaction with NW Corp.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170

February 13, 2023

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Bldg. 8, Ste. 201-A
Boise, Idaho 83714

RE: Case No. AVU-E-19-01 – Comments of Avista related to Colstrip Transaction

Dear Ms. Noriyuki:

Avista Corporation dba Avista Utilities (Avista or the Company) provides the following update
regarding ownership of Colstrip Units 3 and 4. In Order No. 34814 in the above reference case,
the Commission stated that “Avista shall notify the Commission within 30 days of Colstrip partner
decisions and plan issues that may materially affect Idaho customers”.1

On January 16, 2023, Avista Corporation (Avista Corp. or the Company) entered into an agreement
with NorthWestern Corporation (NorthWestern) under which the Company would abandon its 15
percent ownership in Colstrip Units 3 and 4, and NorthWestern would acquire ownership. There
is no monetary exchange included in the transaction. The transaction is scheduled to close on
December 31, 2025 or such other date as the parties mutually agree upon.

Under the agreement, the Company will remain obligated through the close of the transaction to
pay its share of (i) operating expenses, (ii) capital expenditures, but not in excess of the portion
allocable pro rata to the portion of useful life expired through the close of the transaction and (iii)
except for certain costs relating to post-closing activities, site remediation expenses. In addition,
the Company would enter into a vote sharing agreement under which it would retain its voting
rights with respect to decisions relating to remediation.

The Company will retain its Colstrip transmission system assets, which are excluded from the
transaction.

Under the Colstrip Ownership & Operating Agreement, each of the other owners of Colstrip will
have a 90-day period in which to evaluate the transaction and determine whether to exercise their
respective rights of first refusal as to a portion of the generation being turned over to NorthWestern.

1 Order No. 34814, p. 13.
RECEIVED
Monday, February 13, 2023 1:45:36 PM
IDAHO PUBLIC
UTILITIES COMMISSION

2 | P a g e

The transaction is subject to the satisfaction of customary closing conditions including the receipt
of any required regulatory approvals, as well as NorthWestern's ability to enter into a new coal
supply agreement by December 31, 2024.

The Company expects to address any issues and ratemaking treatment related to this proposed
transaction in Avista’s forthcoming general rate case.

Please direct any questions regarding these comments to me at 509-495-8620 or
[e-mail]

Sincerely,
/s/Patrick Ehrbar
Patrick Ehrbar
Director of Regulatory Affairs