20170718Answer to Avista Opposing intervention.pdf

;l),aUTravis Ritchie, CA Bar# 258084 (pro hac vice pendrng)
Sierra Club
2101 Webster Street, Suite 1300
Oakland, CA94612
(4ts) 977-5727
travis.ritchie @ sierraclub. org
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION DBA AVISTA
UTILITIES FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES
FOR ELECTRICAND NATURAL GAS
SERVICE NOTICEOF APPLICATION IN
IDAHO
, ",; ,1,.,,. ;6 lill 9: J J
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. AVU-E-I7-01
AVU-G- l7-01
SIERRA CLUB ANSWER TO
AVISTA'S MOTION OPPOSING
INTERVENTION
Pursuant to Rules 57 -03 and75 of the Idaho Public Utilities Commission
("Commission") Rules of Procedure ("Rules"), Sierra Club submitsl this Answer to the
Objection of Avista Corporation to Petition to Intervene of Sierra Club (the "Objection"),2
served on July ll,21ll . For the reasons stated herein, Sierra Club respectfully requests that the
Commission deny Avista's Objection and grant Sierra Club intervention in the above-captioned
proceeding.
I. SuNulRn
This Commission has a longstanding policy of liberally granting intervention as long as
such intervention will not unduly broaden the issues or delay the proceeding.3 Rule 74 provides
the standard for granting intervention in Commission proceedings: "If a petition to intervene
shows direct and substantial interest in any part of the subject matter of a proceeding and does
not unduly broaden the issues, the Commission or the presiding officer will grant intervention,
subject to reasonable conditions."
' Si"..u Club filed a motion for admission pro hac vice of the undersigned counsel, Travis Ritchie, on July 12,2017
Sierra Club requests that the Commission conditionally accept this brief pending Commission action on the
admission of Mr. Ritchie.
'Avista did not style its Objection as a motion. However, Rule 75 provides that a party opposing an intervention
must do so by motion in opposition. Sierra Club theretbre treats the Objection as a motion in accordance with Rule
57.
3 In the Matter of the Petition of Potlatch Corp. for an Order Determining the Terms & Conditions for Potlatch's
Purchase of Elec. from Avista Utilities., Order No. 28786, AVU-E-O1-5 (July I, 2001).
I
i(Ci,rrr
II. Srcnnl Clun's PrrrrroN ro INrrRvrNn Srarpo.l DrRncr,lNo SUnSTANTIAL lurpnrsr
IN THE PRocnnonc
The Commission should grant Sierra Club's petition to intervene because Sierra Club has
properly stated a direct and substantial interest in the outcome of Avista's General Rate Case. In
accordance with the Commission's Notice of Application Order No. 33808 issued in this docket,
Sierra Club timely filed a petition to intervene in Avista's 2017 General Rate Case (Case No.
AVU-E-17-01) on July 7, 2017. As stated in the petition, Sierra Club has a direct and substantial
interest in this proceeding because "Avista's requested rate increase for 2018 and 2019 will have
environmental, health and economic consequences for Sierra Club members who are customers
of Avista."o It ir indirputable that economic consequences - specifically the impact of Avista's
requested rate increase on its residential customers - are directly at issue in this proceeding.
Sierra Club has therefore complied with the requirements of Rule 74 regarding a direct and
substantial interest in the proceeding. In its petition, Sierua Club clearly identified specific capital
projects at Colstrip Units 3 and 4 that, if approved, will increase its members' rates.5 Nothing
more is required to grant Sierra Club's intervention.
As an environmental organization, Sierra Club pays particular attention to those
economic issues affecting its members that will also have environmental and health impacts.
Siera Club has extensive experience in the environmental benefits, the public health benefits,
and the associated utility economics related to the increased use of energy efficiency and
renewable generation to replace outdated coal-fired and other fossil fuel generation technology.
Sierra Club's advocacy advances the development of energy conservation and renewable energy
policies, which eliminate or reduce global climate change emissions, reduce utility bills, and
generate renewable energy. Sierra Club's work includes advocating for the implementation of
robust incentive programs that assist its members and utility consumers generally to generate
their own renewable energy and increase energy efficiency. Sierra Club's work includes
intervening in general rate cases across the country, participating in integrated resource planning,
participating in efficiency and renewable energy dockets at public utility commissions
nationwide, and submitting comments in numerous state and federal agency energy-related
proceedings and rulemakings.
n Sierra Club Petition to Intervene at p.l
s Id. at p.2.
2
The interests of Sierra Club on behalf of itself and its members clearly establish a direct
and substantial interest in this proceeding that meets the Commission's liberal intervention
standard and the requirements of Rule 74.
Ill.Avrsr,r's OnJBcrroN SKIps Ovrn Srnnna Clun's INrnRnsr rN THE PnocrnnrNc AND
IwrpRopnRLy ARGUES THE MnnIrs oF ITS CasB
Avista does not, and cannot, dispute that members of Sierra Club who are customers of
Avista have a direct and substantial interest in this proceeding. Instead the bulk of Avista's
Objection is devoted to arguments asserting the prudency of the $24 million planned
expenditures at Colstrip.6 Avista claims that the expenditures identified by Sierra CIub are, "in
the ordinary course of business" and "have been routinely incurred."T Avista's assertions may
very well be true, but now is not the time to make such judgments. Sierra Club has not even
challenged the prudency of these expenses; instead, Sierra Club merely noted that those projects
are of interest and warrant further investigation.
Avista's assertions that spending at Colstrip should not be scrutinized in the rate case are
troubling. In fact, Avista provided very little information in its application about the $24 million
in capital projects at Colstrip. While Avista references the "business cases" for those projects, a
closer look at that reference does not provide additional information. Rather, Avista appears to
pass off responsibility for justifying the expenditures by saying that the plant operator - not
Avista - was responsible for the capital projects: "Avista does not operate the facility nor does it
prepare the annual capital budget plan."8 Neither this Commission nor Avista should simply
assume that a third party coal-plant operator is making decisions that are necessarily in the
interests of Idaho customers. At a minimum, scrutiny and review of those expenditures are
warranted through the pendency of this rate case proceeding.
Avista's arguments with respect to the depreciation expense at Colstrip Units 3 and 4 are
similarly premature at this stage of the proceeding. Avista's Objection attempts to rebut
arguments that Sierra Club has not even made in this proceeding by citing to an ongoing rate
case before the Washington Utilities and Transportation Commission.e The positions Sierra Club
has taken in a different state with respect to a different utility (Puget Sound Energy) are not
u Avista Objection at 2-3.
1 ld. at2.t Avisra Exhibir No. 4, Schedule 3, p.90.
'Avista objection at pp.3-5.
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relevant here. If, after investigation and analysis, Sierra Club makes an argument related to
Avista's depreciation schedule, it will be based on evidence on the record in this proceeding that
is relevant to Avista and its Idaho customers.
As for the relevance of Colstrip's depreciation schedule, the depreciation expense related
to Colstrip is a component of the revenue requirement that Avista is seeking in this proceeding.
Whether that annual depreciation expense is too low or too high is therefore relevant to this
proceeding. To be clear, Sierra Club does not intend to seek any Commission order in this
proceeding requiring the closure of Colstrip. However, aligning depreciation schedules of large
power plants with estimated retirement dates is highly relevant to a general rate case. Proper
depreciation schedules appropriately balance ratepayer and shareholder interests by allowing
recovery of plant assets during the life of the plant while at the same time minimizing the risk of
intertemporal cost shifting between current ratepayers who are continuing to receive power from
the plant, and future ratepayers who may otherwise be required to pay off undepreciated assets
after the plant has stopped providing power.
Sierra Club does not, at this time, know what, if any, position it will take on the proper
depreciation expense relied on by Avista related to Colstrip. Sierra Club's intervention simply
noted that "the currently applicable depreciation schedule used by Avista for Colstrip Units 3 and
4 is substantially different than the depreciation schedule used by several co-owners of Colstrip
Units 3 and 4."10 Avista does not dispute that fact, and indeed confirmed that Puget Sound
Energy's currently applicable depreciation schedule of 2044 and 2045 is ten years off of the
2035 schedule relied on by Avista.r' Thir is not the only discrepancy. On information and belief,
PacifiCorp, another Colstrip co-owner, uses a 2032 depreciation schedule for its Oregon and
Washington customers, and a2046 schedule for its Idaho, Utah, Wyoming and California
customers. Portland General Electric recently requested and received approval from the Oregon
Public Utilities Commission to adjust its Colstrip depreciation schedule to 2O3O.t2 Finally,
NorthWestern Energy uses a 2043 schedule for its Montana customers. These dates are
summarized in the table below.
'0 Sierra Club Petition to Intervene at p.2.
" Auirtu Objection at fn. 3, p.4.
'' O."gon Public Utilities Commission Docket ADV 391
4
Currentlv Applicable Depreciation Schedules for Colstrip Units 3&4
Utility State(s)Date
Avista ID, OR 2035
Puget Sound Energy WA 2044t45
PacifiCorp OR, WA 2032
PacifiCorp ID, UT, WY, CA 2046
NorthWestern MT 2043
Clearly, there is a discrepancy in these depreciation dates. Whether or not Avista
affirmatively seeks to change its depreciation expense for Colstrip, it is still appropriate for the
Commission and other parties to raise the issue and, if appropriate, question Avista's decision to
maintain the existing depreciation schedule. Sierra Club is not asking the Commission to
prejudge any outcome on this issue. Rather, Sierra Club is simply asserting that it is an issue
relevant to the current rate case and does not unduly broaden the proceeding.
IV.Smnu Cr,uu,s INTTRvnNUoN wILL NoT UNDULY BRoADEN THE ISSUBS OR DELAY THE
PRocBnonc
Sierra Club's petition to intervene specifically identified issues that are within the scope
of this proceeding. As noted by Avista in its Objection, Sierra Club identified (1) $24 million in
capital additions related to the Colstrip plant, and (2) the depreciation expense and schedule
applicable to the Colstrip plant. Both of those issues directly affect the revenue requirement
request in this proceeding and therefore do not unduly broaden the issues in this case. Sierra
Club further requests leave to address additional issues that are within the scope of this
proceeding that may arise upon further investigation and analysis.
Finally, Sierra Club's intervention will not delay the proceeding. Sierra Club timely filed
its petition to intervene on July lO,2OI7, well before the July 14th deadline set by the
Commission in Order No. 33808.
V. CoNcT,USIoN
For the foregoing reasons, Sierra Club respectfully requests that the Commission deny
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Avista's Objection and grant Sierra Club's petition to intervene in this proceeding.
Dated this 17th day of July,2Ol7 .
submitted,
Travis Ritchie
Attorney for Sierra Club
6
CERTIFICATE OF SERVICE
I hereby certify that on this 17th day of July 2Ol7,I delivered true and correct copies of
the foregoing SIERRA CLUB ANSWER TO AVISTA'S MOTION OPPOSING
INTERVENTION to the following persons via the method of service noted:
FedEx
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
421 W. Washington St.
Boise,ID 83702-5983
diane.holt @ puc.idaho. gov
(Original and seven copies provided)
Email:
David J. Meyer
Vice President & Chief Counsel, Reg. & Gov't
Affairs
Avista Corporation
POBox3727
1411 East Mission Avenue
Spokane, WA99220-3127
david.meyer @ avistacorp. com
Kelly Norwood
Vice President - State & Federal Regulation
Avista Utilities
POBox3727
1411 East Mission Avenue
Spokane, WA99220-3127
kelly. norwood @ avistacorp. com
Peter J. Richardson
Gregory M. Adams
Richardson Adams PLLC
515 N. 27th Street
P0 Box 7218
Boise. ID 83702
peterrichardsonadams.com
greg @ richardsonadams.com
carol.haugen @ clearwaterpaper.com
[e-mail]
j ohn j acobs @ clearwaterpaper.com
david. wrn @ clearwaterpaper.com
nathan. smith @ clearwaterpaper.com
Matthew A. Nykiel
Idaho Conservation League
PO Box 2308
102 S. Euchd#207
Dr. Don Reading
6070 Hill Road
Boise,ID 83703
dreading @ mindspring.com
Brad M. Purdy
Attorney at Law
2019 N. 17th Street
Boise, lD 83702
[e-mail]
Ronald L. Williams
Williams Bradbury, P.C
PO Box 338
Boise,ID 83701
Sandpoint, ID 83864
mnykiel @ idahoconservation. org
Dean J. Miller
36208 Warm Springs Ave.
Boise,ID 83716
deanj miller @ cableone. net
Dated this lTth day of July,2017
ron @ williamsbradbury. com
Laruy A. Crowley, Director
The Energy Strategies Institute, Inc.
5549 S. Cliffsedge Ave.
Boise, ID 83716
[e-mail]
Alexa Zimbalist
Legal Assistant
Sierra Club Environmental Law Program
2101 Webster St., Suite 1300
Oakland, CA94612
Phone: [phone]