20191204notice_of_petition_order_no_34500.pdf

Office of the Secretary
Service Date
December 4,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )CASE NO.AVU-G-19-08
CORPORATION'S PETITION FOR )LIMITED WAIVER OF PENALTY TERMS )NOTICE OF PETITION
SET FORTH IN ITS NATURAL GAS TARIFF )
)NOTICE OF MODIFIED
)PROCEDURE
)ORDER NO.34500
On November 14,2019,Avista Corporation (Avista or the Company)petitioned the
Commission to grant a limited waiver of certain penalty provisions in Schedule 1461 of Avista's
tariff,and authorize settlement discussions between Clearwater Paper (Clearwater)and Avista to
resolve a disputed penalty that arose from Schedule 146.
The Commission now issues this notice of the Company's Petition,and Notice of
Modified Procedure.
NOTICE OF PETITION
YOU ARE HEREBY NOTIFIED that the Company petitions the Commission to grant
a limited waiver to Schedule 146's penalty provisions.The Company explains it has a contract
with Clearwater to provide Clearwater with natural gas transportation.Schedule 146 is
incorporated into the contract.Id.
YOU ARE FURTHER NOTIFIED that Schedule 146-Transportation Service for
Customer-Owned Gas-provided the terms under which Avista provided natural gas
transportation services to commercial and industrial customers with requirements exceeding
250,000 therms of gas per year.Under Schedule 146,Avista may issue an entitlement order
prescribing a maximum amount of gas to be used by a customer per day.Gas used over the
prescribed entitlement is subject to an entitlement penalty.
YOU ARE FURTHER NOTIFIED that natural gas prices during the winter of 2018-
2019 were volatile because of the West Coast Pipeline rupture on October 9,2018.The Company
i The Commission recently replaced Schedule 146 in Case No.AVU-G-19-05.See Order No.34461.However,
Schedule 146 was in effect when the penalties at issue in this case were incurred.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34500 1
states that,in February and March 2019,Northwest Pipeline-the main interstate pipeline that
transports natural gas from Sumas south along the I-5 corridor and east to the Rocky Mountains-
issued entitlement notices requiring shippers on its pipeline to stay within a certain percentage of
their nominated natural gas supplies.In response to these notices,Avista issued entitlement notices
to those customers on its distribution system that purchase their own natural gas and procure their
own natural gas transportation,of which Clearwater is one.
YOU ARE FURTHER NOTIFIED that the Company states Clearwater exceeded its
nominated natural gas volumes eight times between February 7,2019 and March 4,2019.Avista
issued entitlement penalties for the eight exceedances,under Schedule 146.The entitlement
penalty in Schedule 146 is calculated by the greater of $1.00 per therm or 150%of the highest
midpoint price at one of a select number of natural gas trading hubs.Avista states that,while the
average natural gas price at various non-Sumas trading hubs during the exceedances was $0.65 per
therm,the average price at Sumas during the same period was $3.59 per therm,with a high price
of $15.93 per therm.Avista states the resulting entitlement penalty against Clearwater is $926,202.
YOU ARE FURTHER NOTIFIED that Clearwater and Avista agree that the
entitlement penalty is undulyburdensome.Avista states it was never forced to buy more natural
gas to make up for excessive natural gas use by Clearwater.Avista notes "there was no financial
harm to any of Avista's core customers,nor was Avista penalized by Northwest NaturaL"
YOU ARE FURTHER NOTIFIED that Avista states Clearwater wishes to engage in
settlement negotiations to determine whether and by what amount the entitlement penalty should
be reduced.Avista cannot reduce a schedule-derived penalty without the Commission's
authorization.Therefore,the Company asks the Commission to grant a limited waiver of Schedule
146.
YOU ARE FURTHER NOTIFIED that if Clearwater and Avista agree to a modified
entitlement penalty,theywill jointlyfile a settlement agreement with the Commission for approval
or rejection.
YOU ARE FURTHER NOTIFIED that the Petition is available for public inspection
during regular business hours at the Commission's office.These documents are also available on
the Commission's web site at Click on the "File Room"tab at the top of the
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34500 2
page,then select "Natural Gas Cases"and click on the case number as shown on the front of this
document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and specifically Idaho
Code §§61-502 and 61-503.The Commission may enter any final Order consistent with its
authorityunder Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter,and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission's Rules of Procedure,IDAPA
31.01.01.201through .204.The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Petition must file a written comment in support or opposition with the Commission by
January 7,2020.The comment must contain a statement of reasons supporting the comment.
Persons desiring a hearing must specifically request a hearing in their written comments.Written
comments concerning this Petition shall be mailed to the Commission and the Company at the
addresses reflected below;
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34500 3
For the Idaho Public Utilities For Avista Corporation:
Commission:
Commission Secretary Michael G.Andrea
Idaho Public Utilities Commission Avista Corporation
PO Box 83720 1411 E.Mission Ave.,MSC 17
Boise,ID 83720-0074 PO Box 3727
Spokane,WA 99220-3727
Street Address for Express Mail:E-Mail:[e-mail]
11331 W.Chinden Blvd.Patrick D.Ehrbar
Building 8,Suite 201-A Avista Corporation
Boise,Idaho 83714 1411 E.Mission Ave.,MSC 27
PO Box 3727
Spokane,WA 99220-3727
E-Mail:[e-mail]
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at Click the "Consumers"tab then click
the "Case Comment or Question Form"and complete the comment form using the case number as
it appears on the front of this document.
YOU ARE FURTHER NOTIFIED that the Company must file any reply comments by
January 14,2020.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its Order
without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
ORDER
IT IS HEREBY ORDERED that the Company's Petition be processed by Modified
Procedure,Rule 201-204 (IDAPA 31.01.01.201-.204).Persons interested in submitting written
comments must do so by January 7,2020.The Company must file any reply comments by January
14,2020.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34500 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of December,2019.
PAUL KJEÛL N ER,PRESIDENT
KRIÈINE RAPER,C"ISSIONER
ERIC ANDERSON,CONISSIONER
ATTEST:
Diane M.Hanian '
Commission Secretary
I:\Legaí\GAS\AVU-G-19-imordersìAVUGivus me pel mhuwx
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34500 5