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Home My WebLink About20040805Avista Reply Comments on Reconsideration.pdfR. Blair Strong Paine, Hamblen, Coffin Brooke & Miller LLP 717 West Sprague Avenue, Suite 1200 Spokane, W A 99201-3505 Telephone: (509) 455-6000 Facsimile: (509) 838-0007 Attorneys' for A vista Corporation HECEIVED fV1L::J itED 70flb, AUG - 5 Ai"l I: . --. :~j.;j . , ~~t." ! f . ' ."~" I,,"'f "'"" fl......CIAGIll Iii::.;) LUi ii'li.:J..)IU.' BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE PETITION FILED BY IDAHO POWER COMPANY FOR APPROVAL OF MODIFICATIONS TO THE SECURITY PROVISIONS REQUIRED TO BE INCLUDED IN POWER PURCHASE AGREEMENTS BETWEEN ELECTRIC UTILITIES (IDAHO POWER, A VISTA CORPORATION DBA A VISTA UTILITIES, AND P ACIFICORP DBA UTAH POWER & LIGHT COMPANY) AND PURP A Q ALIFYIN G FACILITIES (QFS) CASE NOS. IPC-03- A VU-03- PAC-03- REPLY COMMENTS OF A VISTA CORPORATION ON RECONSIDERATION I. INTRODUCTION Avista Corporation ("Avista ), by and through its undersigned attorneys respectfully requests that the Commission consider and receive these Reply Comments. II. COMMENTS A vista has concerns regarding the use of second liens for risk mitigation in levelized rate contracts similar to those expressed in the Idaho Power Company comment~. There is a definite possibility for conflicts of interest if qualifying facility QF") developers are allowed to prepare and file documents that are necessary to grant utilities security interests in QF assets in the event of defaults under QF power purchase and sale contracts. REPL Y COMMENTS OF A VIST A CORPORATION ON RECONSIDERATION - A vista recommends that creation of second liens on QF projects be handled in a manner similar to common commercial and real estate transactions. In those transactions, the party receiving the benefit of the lien or mortgage may prepare and file the lien or mortgage documents, or select the attorney or closing agent who performs the required legal work. In other situations, a person or law firm who is neutral to the seller and the buyer performs the legal work associated with creating the lien. Although the person whose property is to be encumbered is responsible for executing appropriate documents only in the most exceptional circumstances is that person actually tasked with the responsibility of preparing and filing the appropriate documents that create the lien. Allowing QF developers to prepare and file the required documents would be an unnecessary departure from usual commercial practice. If QF developers are assigned the task of preparing, filing and perfecting a second lien for a utility, then the utility should not be held responsible for the viability of that security. It would be unreasonable to require a utility to accept a security interest created by a QF and then hold the utility responsible, if the security interest is not ultimately effective, enforceable or sufficient to cover all of the assets. A vista also concurs that a utility should recover in its rates costs relating to preparing and/or reviewing second liens. Alternatively, costs of preparation and/or review of such liens should be directly reimbursed by the developer. The utility should have the discretion to determine whether its legal work associated with such liens will be conducted internally, or by retaining outside assistance. A vista suggests that these issues be clarified in its final order so as to diminish possible misunderstandings between QF developers and the utility. The Company also REPLY COMMENTS OF A VISTA CORPORATION ON RECONSIDERATION - 2 recommends that the Commission make clear that utility will recover their costs regarding the creation and/or review of second liens. III. SERVICE OF FURTHER PLEADINGS Service of further pleadings, and other documents relating to this proceeding should be served upon the following: H. Douglas Young A vista Corporation O. Box 3727 Spokane, W A 99220-3727 Telephone: (509) 495-4521 Facsimile: (509) 495-8856 E-mail: doug.young(g)avistacorp.com - and - R. Blair Strong Paine, Hamblen, Coffin, Brooke & Miller LLP 717 West Sprague Avenue, Suite 1200 Spokane, W A 99201-3505 Telephone: (509) 455-6000 Facsimile: . (509) 838-0007 E-mail: rbstrong (g) painehamblen .com RESPECTFULLY SUBMITTED this 2nd day of August, 2004. PAINE, HAMBLEN, COFFIN, BROOKE & MILLER LLP REPL Y COMMENTS OF A VISTA CORPORATION ON RECONSIDERATION - 3 CERTIFICA TE OF SERVICE HEREBY CERTIFY that on thec;2 y of August, 2004 I caused to be served a true and correct copy of the foregoing by the method indicated below, and addressed to the following: Ms. Jean Jewell, Secretary XXXX S. Mail Idaho Public Utilities Commission Hand Delivery 472 West Washington Street Facsimile Boise, Idaho 83720-0074 Overnight Mail Electronic Mail Randy C. Allphin XXXX S. Mail Contract Administrator Hand Delivery Idaho Power Company Facsimile O. Box 70 Overnight Mail Boise, ID 83707-0070 Electronic Mail Harton L. Kline XXXX S. Mail Monica B. Moen Hand Deli very Idaho Power Company Facsimile 1221 West Idaho Street Overnight Mail O. Box 70 Electronic Mail Boise, ID 83707-0070 Mark Widmer XXXX S. Mail PacifiCorp Hand Deli very 825 NE Multnomah Facsimile Portland, OR 97232 Overnight Mail Electronic Mail Dale G. Rasmussen XXXX S. Mail Associate General Counsel Hand Deli very PacifiCorp Facsimile 825 NE Multnomah, Suite 1800 Overnight Mail Portland, OR 97232 Electronic Mail Colin Persichetti XXXX S. Mail Director, Marketing & Trading Hand Deli very PacifiCorp Facsimile 825 NE Multnomah, Suite 600 Overnight Mail Portland, OR 97232 Electronic Mail Scott Woodbury, Esquire XXXX S. Mail Idaho Public Utilities Commission Hand Delivery 472 West Washington Street Facsimile Boise, Idaho 83720-0074 Overnight Mail Electronic Mail 00194985 REPLY COMMENTS OF A VISTA CORPORATION ON RECONSIDERATION - 4