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DECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RANDY LOBB DON HOWELL BEVERLY BARKER RON LAW GENE FADNESS TONYA CLARK WORKING FILE FROM: DAN GRAVES DATE: MAY 2, 2002 RE: AVISTA REVISED TARIFF SHEET 58 TO IMPLEMENT CITY OF POST FALLS 1% FRANCHISE FEE. On April 29, 2002, Avista Corporation d/b/a Avista Utilities electronically filed Tariff IPUC No. 28, Sixth Revision Sheet 58 canceling Fifth Revision Sheet 58. The purpose of this filing is to pass through a franchise fee of 1% imposed on gross revenues from the sale, transmission, and/or distribution of electrical power to customers within the City of Post Falls as specified by Resolution No. 2002-17. Avista provides electrical services to approximately 5,800 residential, 983 commercial and 17 industrial customers in the City of Post Falls. The Company estimates the 1% fee will increase annual revenues by approximately $85,000. Avista requests the renewed 1% fee become effective June 1, 2002 and remain in effect until November 20, 2014, which fulfills the remainder of the franchise agreement's term of 25 years as established by Ordinance N. 556. BACKGROUND On November 21, 1989 Ordinance No. 556 created a Franchise Agreement between the City of Post Falls and Washington Water Power, which allowed Post Falls to impose a franchise fee not to exceed 3% by ordinance or resolution. That same day Resolution No. 89-20 was established, and imposed a 0.25% franchise fee beginning January 1, 1990. The City of Post Falls amended Ordinance No. 556 with Ordinance No. 721 on September 7, 1993, which raised the franchise limit from 3% to 5%, effective January 1, 1994. On August 6, 1996, the Post Falls City Council voted to terminate the 0.25% franchise fee as of September 30, 1996. On April 9, 2002, the City of Post Falls established Resolution No. 2002-17, imposing a franchise fee on Avista in the amount of 1%. STAFF RECOMMENDATION I recommend that the Commission accept Avista's Tariff IPUC No. 28, Sixth Revision Sheet 58, Canceling Fifth Revision Sheet 58, effective June 1, 2002. COMMISSON DECISION Does the Commission Agree? i:udmemos/dm Avista may 2, 2002