HomeMy WebLinkAbout20231220Amendment No. 4 .pdf
Avista Corp.
1411 East Mission, P.O. Box 3727
Spokane, Washington 99220-0500
Telephone 509-489-0500
Toll Free 800-727-9170
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd
Building 8, Suite 201-A
Boise, ID 83714
RE: Avista – Amendment No. 4 to the Stimson Lumber Company PPA
Enclosed for filing with the Commission is an electronic copy of Amendment No. 4 to the Power
Purchase Agreement between Avista Corporation (“Avista”) and Stimson Lumber Company
(“Stimson”). Avista is submitting Amendment No. 4 to comply with the Commission’s Order No.
36019 issued on December 8, 2023 approving Amendment No. 3 to the Power Purchase
Agreement subject to language modifications and updated avoided cost rates as provided in the
order.
To comply with Order No. 36019, Amendment No. 3 (i) adds a new section 9.9 to the Power
Purchase Agreement to address potential modifications, (ii) amends section 24 of the Power
Purchase Agreement to reflect the significance of Commission approval, and (iii) replaces Exhibit
E to the Power Purchase Agreement to update the avoided cost rates. In addition to the
amendments to comply with Order No. 36019, Amendment No. 4 also updates Section 31 of the
Power Purchase Agreement so that Stimson is only required to pay the use of facilities charge
required by that section during months that its Facility actually produces power. This revision is
necessary to reflect the potential that in the 2024-2025 period covered by Amendment No. 4 there
may be periods of time during which the Facility will not operate.
Please direct any questions regarding this report to Michael Andrea at (509) 495-2564 or myself
at 509-495-4584.
Sincerely,
/s/Paul Kimball
Paul Kimball
Manager of Compliance & Discovery
Avista Utilities
509-495-4584
RECEIVED
Wednesday, December 20, 2023 4:06:50 PM
IDAHO PUBLIC
UTILITIES COMMISSION
2 | P a g e
paul.kimball@avistacorp.com
Enclosure
AMENDMENT NO. 4
This Amendment No. 4 (“Amendment No. 4”) to the Power Purchase Agreement
(“Agreement”) between Avista Corporation (“Avista”) and the Stimson Lumber Company
(“Project Developer”), is entered into by the Parties and this Amendment No. 4 shall be effective
as of the date of the order issued by the Idaho Public Utilities Commission (“Commission”)
approving this Amendment No. 4.
RECITALS
WHEREAS, the Parties entered into the Agreement on December 23, 2019, under which
Project Developer is to deliver and sell, and Avista is to purchase, electric energy generated from
Seller’s Facility;
WHEREAS, the Commission approved the Agreement, as amended by Amendment No.
1, in Order No. 34692 issued on June 15, 2020;
WHEREAS, the Commission approved the Agreement, as amended by Amendment No.
2, in Order No. 35245 issued on December 7, 2021;
WHEREAS, in a joint petition dated September 20, 2023, the Parties to the Agreement
submitted Amendment No. 3 to the Commission for approval in Case No. AVU-E-23-14;
WHEREAS, on November 20, 2023, Commission Staff submitted comments in Case No.
AVU-E-23-14 recommending certain revisions to the Agreement; and
WHEREAS, the Parties to the Agreement desire to amend the Agreement consistent with
Commission Staff’s recommendations.
NOW THEREFORE, it is agreed as follows:
AGREEMENT TO AMEND
1. In its comments, Commission Staff stated: “The Agreement does not contain
provisions that address potential future modifications to the Facility that may require a change in
rates and that must be subsequently authorized by the Commission. Staff recommends that the
Parties include language in the Agreement as directed by the Commission in Order No. 35705.”
Accordingly, the following new Section 9.9 is added to the Agreement:
9.9 Project Developer shall notify Avista in writing prior to making any
material modifications to the Facility, including, but not limited to, modifications to the
Facility that (i) increases or decreases the Facility nameplate capacity, (ii) changes the
primary energy source, or (iii) changes the generator fuel. Any material modifications
will require a review and, subject to Section 24 of this Agreement, amendment of the
Agreement, including the applicable pricing, and Avista, at its sole determination, may
adjust the pricing or terminate the Agreement. If the Agreement is terminated because of
such modifications, Project Developer will be responsible for any financial damages
incurred by Avista as a result of such termination.
2. In its comments, Commission Staff further recommended that Section 24 of the
Agreement be updated to reflect the need for Commission approval before any modification
becomes valid. Accordingly, Section 24 of the Agreement is deleted in its entirety and replaced
with the following:
24. Amendment
No change, amendment or modification of any provision of this Agreement shall
be valid unless set forth in a written amendment to this Agreement signed by both Parties
and subsequently approved by the Commission.
3. In its comments Commission Staff recommended updating the avoided cost rates
in the Agreement to reflect the updated cost of capital parameters in Order No. 35909.
Accordingly, attached Third Amended Exhibit E supersedes and replaces all prior versions of
Exhibit E to the Agreement.
4. Project Developer has notified Avista that, during the term of the Agreement,
there will be extended periods during which the Facility will not operate. Pursuant to Section 31
of the Agreement, Avista recovers certain costs of sole use facilities in Avista’s Plummer
Substation through a monthly use-of-facilities charge. Avista and Project Developer have agreed
that Project Developer shall only pay such use-of-facilities charge for each month in which
Project Developer operates its Facility and shall not be required to pay the use-of-facilities
charge for any month for which (i) Project Developer has notified Avista that the Facility will
not operate, and (ii) the Facility is not operated. Accordingly, Section 31 of the Agreement is
amended to add the following at the end of Section 31 of the Agreement:
Notwithstanding the foregoing, if (i) Project Developer provides Avista written
notice at least ten (10) days prior to the first day of any calendar month that the Facility
will not produce any power in such calendar month, and (ii) the Facility does not produce
any power in such calendar month, Project Developer shall not be required to pay a
monthly use of facilities charge pursuant to this Section 31 for such calendar month.
5. Except as expressly amended by the provisions set forth in this Amendment No.
4, all of the terms and conditions of the Agreement, as amended, shall remain in full force and
effect following execution of this Amendment No. 4 and each Party confirms, ratifies and
approves the Agreement as amended by this Amendment No. 4. All capitalized terms used
herein and not otherwise defined shall have the respective meanings given to such terms in the
Agreement. For the avoidance of doubt, this Amendment No. 4 is hereby incorporated in the
Agreement and, as of the effective date of this Amendment No. 4, all references to the
Agreement shall be deemed to be references to the Agreement as amended by this Amendment
No. 4.
6. This Amendment No. 4 may be executed in two (2) 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 No. 4 to be
executed by its duly authorized representatives as of the date first set forth below.
STIMSON LUMBER COMPANY
By: ____________________________
Printed Name: ___________________
Title: __________________________
Date: __________________________
AVISTA CORPORATION
By: ____________________________
Printed Name: ___________________
Title: __________________________
Date: __________________________
Christopher Drake
Manager, Res Opt & Mktg
12-19-2023