HomeMy WebLinkAbout20070309Decision memo.pdfDECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER RED FO RD
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:CECELIA A. GASSNER
DATE:MARCH 7, 2007
SUBJECT:VISTA CORPORATION'S APPLICATION REQUESTING APPROVAL
OF A NATURAL GAS TRANSPORTATION SERVICE AGREEMENT,
CASE NO. AVU-07-
On February 20, 2007, Avista Corporation ("Avista" or "Company ) filed an
Application with the Commission requesting approval of a Natural Gas Transportation Service
Agreement (the "Agreement") between the Company and Potlatch Forest Products Corporation
Potlatch"). This Commission has the jurisdiction over such request pursuant to Idaho Code
61-307, 61-622 and 61-623. The Company requested that the Application be processed by
Modified Procedure.
THE APPLICATION
According to the Application, A vista has been providing natural gas transportation
service to Potlatch's Lewiston, Idaho plant under an existing agreement since 1993. During that
time, Potlatch has increased its efficiency and reduced its annual natural gas consumption from
64 million therms to 38 million therms.Application at 2.In addition, A vista has seen
considerable load growth in the Moscow/Lewiston area and an increased need for pipeline
capacity. Id. Avista and Potlatch negotiated a capacity release agreement, and Potlatch
expressed its desire to negotiate a new gas distribution agreement as well. Id. at 3.
The initial term of the Agreement is ten years, beginning the day following
Commission approval and ending November 30, 2016. The parties have agreed on charges
based upon Potlatch's desire to pay Avista for distribution service in the future that more
reasonably reflects the alternative cost of connecting directly to a different pipeline, and Avista
desire to retain a reasonable level of distribution charges. Id. at 3-4. Based on Potlatch's usage
DECISION MEMORANDUM
in 2006, its annual bill under the existing agreement is $264 000. Id. at 4. Under the Agreement
Potlatch would pay: $185 000 through November 2007; $150 000 from December 2007 through
November 2008; $111 000 from December 2008 through November 2009; and $74 000 per
annum from December 2009 through the end of the Agreement. Id. The Company believes that
the current and projected rate of growth it is experiencing in north Idaho should offset a portion
of the lost revenue/margin received from Potlatch under the existing agreement. Id. at 4-
ST AFF RECOMMENDATION
Staff recommends that the Company s Application be processed by Modified
Procedure with a twenty-one (21) day comment period. This should allow sufficient time for
interested parties to review the Company s Application and file their comments with the
Commission. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204.
COMMISSION DECISION
Does the Commission preliminarily find that the public interest may not require a
hearing to consider the issues presented in this case, and that this case is appropriate for
Modified Procedure pursuant to Commission Rules of Procedure 201 through 204?
Does the Commission approve of the recommended comment period?
Cecelia A. Gassner
M:A VU-O7-
DECISION MEMORANDUM