IDAHO PUBLIC UTILITIES COMMISSION

IDAHO PUBLIC UTILITIES COMMISSION

Case No. AVU-E-06-10

December 26, 2006

Contact: Gene Fadness (208) 334-0339

Avista, Stimson Lumber propose sales agreement

Avista Utilities is seeking authorization from the Idaho Public Utilities Commission to buy up to 6.5 megawatts of energy from Stimson Lumber Company. Stimson operates a thermal wood waste generating plant at Plummer.

Also included within the agreement is an interconnection agreement that allows the energy created by the lumber plant to be connected to Avista’s transmission grid.

HaleyWest LLC previously operated the Stimson facility. Stimson has assumed HaleyWest’s obligations under an agreement that expired on Sept. 30. The new five-year agreement, if approved, would be effective retroactively to Oct. 1.

The Stimson generating facility is a qualifying facility under the provision of the federal Public Utility Regulatory Policies Act of 1978, or PURPA. The act requires that electric utilities offer to buy power produced by small power producers or cogenerators who obtain Qualifying Facility (QF) status. The published rate to be paid project developers, called an avoided-cost rate, is set by state commissions and is to be equal to the cost the electric utility avoids if it would have had to generate the power itself or purchase it from another source.

Avista will be the sole buyer of Stimson’s generation. Stimson will operate its facility in such a manner that the hourly scheduled amount of delivered output will not exceed 6.5 megawatts in any hour. If Stimson should generate more than that, Avista can buy the surplus energy, but is not obligated to do so. If Avista chooses to buy surplus output, it will pay Stimson the current month’s wholesale market energy price or the contract purchase price, whichever is lower.

The commission is taking public comment on the proposed sales agreement through Jan. 11, 2007. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (AVU-E-06-10) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.