20080225Avista Comments.pdf

10 '1": JJ
~~~'V'STA.
Corp.
l, Commission Secretary
ublic Utilities Commission
. Washington Street
ise, il 83702
Re: Comments of Avista Corporation in Case NO. IPC-E-07-18
Dear Ms. Jewell:
Enclosed for fiing are an original and four (4) copies ofAvista's comments regarding the
"Disposition Of Proceeds For The Sale OfIdaho Power Company's S02 Emission
Allowances In CY 2007".
If you have any questions regarding this filing, please feel free to me at [phone].
Patrick Ehrbar
Regulatory Analyst
State and Federal Regulation
A vista Utilities
509-495-8620
pat.ehrbar~avistacorp .com
Enclosures:
cc:
One Original + Four Copies
Servce List
Kelly Norwood
Vice President, State and Federal Regulation
A vista Corporation
1411 East Mission Ave.
Spokane, W A 99202
Phone: [phone]
Fax: [phone]
kelly.norwood(favistacorp.com
Rì::
to: 33
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPROPRITE
DISPOSITION OF PROCEEDS FOR THE
SALE OF IDAHO POWER COMPAN'S
S02 EMISSION ALLOWANCES IN CY 2007
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CASE NO. IPC-E-07-18
COMMNTS OF AVISTA
CORPORATION
Avista Corporation ("Avista" or "Company") hereby submits comments in response to the
Idaho Public Utilities Commission's ("Commission") request for written comments in Case No IPC-E-
07-18.
The Company appreciates the opportity to comment on the IPUC Order No. 30495 dated
February 4, 2008 regarding the proceeds from the sale of S02 credits by Idaho Power. Avista supports
passing revenue and expense associated with the sale of S02 credits through the Power Cost
Adjustment (PCA) mechanism.
It may be necessary for A vista to trade emissions-related credits, such as S02, greenhouse gas
(GHG) credits and renewable energy credits (RECs) to meet is legal obligations. The increasing
frequency and unpredictabilty of the costs and benefits associated with these emissions-related sales
and purchases make it important to develop a consistent policy for handling the costs or credits
associated with them. Although emissions credits are not traditional power supply expenses, they
directly relate to power supply operations and their subsequent costs or benefits should flow through to
customers. It should not be a one way street where only costs are passed through but revenues are not.
AVISTA CORPORATION COMMENTS IN IPC-E-07-18 Page 1
The emissions sales are relatively unique and therefore not predictable. The revenues from the
sale of excess S02 credits, near-term C02 credits or RECs, should be passed through to customers
through the revenue sharing mechanism of the PCA, net of the costs associated with the sales.
The policy of passing costs and benefits through the PCA would encourage best practices by
utilities for managing the sales and purchases of emissions- or RPS-related credits. For example, ths
10% revenue-sharing arangement in the PCA would be an encouragement to utilities to be diligent in
the pursuit of voluntary emissions credit related projects that wil benefit customers. Avista's decision
to join the Chicago Climate Exchange (CCX) falls under this type of arangement. The CCX is a
voluntar GHG reduction program that Avista decided to join in order to develop experience with
trading GHG credits and provide a positive monetar benefit for customers through the sale of excess
GHG credits.
To the extent that longer term sales or purchases of emissions or RPS-related credits are known
and measurable, they could be proformed into base rates. Examples of the long-term issues could be
federally or state mandated GHG emissions rules with known compliance schedules. Expected C02
costs would be proformed into base rates and any tre up amounts could be tracked through the PCA
until the next rate case. Likewise, if the C02 credits provided a longer-term positive revenue stream,
the Company would pro form those revenues in the next rate case.
Respectfully submitted this 22nd day of February 2008.
AVISTA CORPORATION~ d,. i.
KELLY NORWOOD
Vice President, State and Federal Regulation
A VIST A CORPORATION COMMENTS IN IPC-E-07 -18 Page 2
I HEREBY CERTIFY that on this 22ud day of February, 2008, I caused to be served a
tre and correct copy of Avista Utilties' Comments in Case No. IPC-E-07-18 by
Overnght Mail to the IPUC and Electronic Mail to the following:
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83720-0074
Jean. jewell((uc.idaho. gov
Rick Sterling
Commission Staff
472 W. Washington
Boise, ID 83720-0074
rick.sterling((uc.idaho. gov
Baron L. Kline
Lisa D. Nordstrom
John R. Gale
Randy Allphin
Idaho Power Company
1221 W. Idaho Street (83702)
Boise, ID 83707
rallphin(fidahopower . com
bkline(fidahopower. com
lnordstrom(fidahopower .com
rgale(fidahopower.com
Celeste Schwendiman
Greg Said
Karl Bokenkamp
Mark Stokes
Idaho Power Compan
1221 W. Idaho Street
Boise, ID 83707
cschwendiman(fidahopower . com
gsaid(fidahopower. com
kbokenkamp(fidahopower.com
mstokes(fidahopower . com
Bil Chisholm
Idaho Energy Education Project
19073 E. Highway 30
Buhl, ID 83316
chisholm3 (fmindspring.com
RandyLobb
Commission Stff
472 W. Washington
Boise, ID 83707
randy.lobb(fuc.idaho. gov
Terr Carlock, Senior Accountant
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83720
Terr. carlock(fuc.idaho. gov
Donn English
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83720
donn.english(fuc.idaho. gov
Peter J. Richardson
Richardson & O'Leary
515 N. 27th Street
Boise, ID 83702
peter(frichardsonanddoleary.com
Ken Miler
Snake River Allance
910 W . Jefferson
Boise, ID 83702
kmiler(fsnakerverallance.org
Joe Miler
420 W. Bannock
Boise,ID 83702
joe(fmcdevitt miler.com
Rich Rayhil
Ridgeline Energy
720 W. Idaho
Boise, ID 98702
rrayhil(frl-en.com
1
Marin Fullenbaum
Exeter
Columbia, MD
martinf(fexeterassociates. com
Ronald Doskeland
Bjorn Doskeland
Windland, Inc.
7669 W. Riverside Dr.
Boise, ID 83704
wind(fwindland.com
bjorn(fwindland.com
Rich Howard
Idaho Conservation League
Atlatl l(fyahoo.com
Pat Ehrbar
2