20250731Direct Brandon.pdf

DAVID J. MEYER, ESQ.VICE PRESIDENT AND COUNSEL OF
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
1411 E. MISSION AVENUE
P.O. BOX 3727
SPOKANE, WASHINGTON 99220
PHONE: [phone]
DAVID.MEYER@AVIS TACORP.COM
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST ) CASE NO. AVU-E-25-07
ADJUSTMENT (PCA) ANNUAL RATE )
ADJUSTMENT FILING OF AVISTA ) DIRECT TESTIMONY OF
CORPORATION ) ANNETTE M. BRANDON
FOR AVISTA CORPORATION

I Q. Please state your name, present position with Avista Corporation, and
2 business address.
3 A. My name is Annette M. Brandon. I am employed by Avista Corporation as
4 Strategic Initiatives Manager in the Regulatory Affairs Department. My business address
5 is 1411 East Mission, Spokane, Washington.
6 Q. Would you briefly describe your educational background and
7 professional experience?
8 A. Yes. I earned a Bachelor of Arts in Business Administration—Professional
9 Accounting from Eastern Washington University in 2002. I began my career at Avista in
10 1999 as a Budget Analyst in the Transmission department. Over the years, I've held roles
11 in the Tax Department and Resource Accounting, where my responsibilities included
12 natural gas and power accounting, budgeting, and reporting. In 2012, I transitioned to
13 Regulatory Affairs, overseeing power supply recovery mechanisms in Washington and
14 Idaho (Washington Energy Recovery Mechanism, Idaho Power Cost Adjustment), labor
15 and benefits issues, and served as Revenue Requirements Manager for Oregon's 2019
16 General Rate Case. In 2020, I moved to Power Supply as a Wholesale Marketing Manager,
17 including oversight and testimony for the power supply recovery mechanisms, Request for
18 Proposal processes, and leading key initiatives such as the Clean Energy Implementation
19 Plan and Climate Commitment Act.In mid-2025,I returned to Regulatory Affairs,focusing
20 on management, implementation and oversight of strategic, emerging issues and policies.
21 Q. What is the scope of your testimony in this proceeding?
22 A. My testimony provides a summary of the accounting entries and account
23 balances related to the PCA for the 12-months ended June 30, 2025. My testimony also
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Avista Corporation

I addresses the proposed rebate to be effective October 1, 2025, which will replace the
2 existing rebate that went into effect on October 1, 2024.
3 Q. Are you sponsoring any Exhibits?
4 A. Yes. I am sponsoring Exhibit No. AMB-1. Page I of that exhibit details the
5 calculation of the proposed uniform cents per kilowatt-hour PCA rebate of 0.301¢, as well
6 as the impact of the proposed PCA rebate rate by rate schedule. Page 2 is the proposed PCA
7 tariff, Schedule 66.
8 Q. Would you please provide an overview of the most recent history of
9 Avista's PCA methodology that has been approved by the Idaho Public Utilities
10 Commission ("IPUC")?
11 A. Yes. On June 29, 2007, the Commission issued Order No. 30361 in Case
12 No. AVU-E-07-01. That case dealt with the review of the PCA methodology and method
13 of recovery. The Commission approved a change in the PCA methodology from a trigger
14 and cap mechanism to a single annual PCA rate adjustment filing requirement.
15 The Commission also approved a change in the method of the PCA deferral rate
16 adjustment from a uniform percentage basis to a uniform cents per kilowatt-hour basis,
17 effective with the October 1, 2007, rate change. By Order No. 32206 in Case No. GNR-E-
18 10-03 dated March 15, 2011, the Commission modified the retail revenue credit
19 methodology and approved a Load Change Adjustment Rate based on the energy-classified
20 portion of embedded production revenue requirement effective April 1, 2011.
21 The Commission approved the following procedural schedule for administering the
22 annual PCA filings:
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Avista Corporation

I August 1 Company filing for prior July—June deferral period
2
3 September 1 Review and comments by Staff and other interested
4 parties
5
6 October 1 Commission Order and effective date of PCA rate
7 adjustment
8
9 Q. Would you please summarize the filing and Order associated with the
10 existing PCA rate?
11 A. Yes. On July 31, 2024, Avista filed its annual PCA rate adjustment for the
12 period July 1, 2023, through June 30, 2024, and requested a PCA rebate rate of 0.2460 per
13 kilowatt-hour effective October 1, 2024. The Commission approved that request in Case
14 No. AVU-E-24-07, by Order No. 36339, October 1, 2024, and Order No. 36294 dated
15 October 30, 2024.
16 Q. Does the present filing conform to the requirements of the prior
17 Commission Orders regarding the PCA?
18 A. Yes. Consistent with prior years,the proposed PCA rate adjustment is based
19 on the following:
20 • Deferrals for the period July 1,2024,through June 30,2025,including interest,
21
22 • Unamortized balance remaining from the period October 1,2024,through June
23 30, 2025, including interest, and
24
25 • Forecast amortization and interest from July 1, 2025, through September 30,
26 2025.
27
28 Q. What were the amounts of deferrals and interest for the period July 1,
29 2024 through June 30, 2025?
30 A. Table No. 1 below summarizes the charges for this period:
31
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Avista Corporation

I Table No. 1 —Summary of Deferral Balance
2 Power Supply Deferrals(July 2024-June 2025) $ (5,177,764)-
Energy Imbalance Market Opeations and Maintenance Expense $ 324,712
3 Renewable Energy Credit Retirement Benefit $ (2,755,522)
Interest $ (305,405)
4 Total Deferral Balance (7,913,979)
5 Company witness Mr.Holland discusses the components and variances that resulted
6 in a $5,177,764 rebate shown above. In addition, Mr. Holland provides an explanation for
7 the inclusion of the Energy Imbalance Market Operations and Maintenance expense of
8 $324,712. The Renewable Energy Credit(REC) credit/rebate represents Idaho's allocation
9 of RECs that were retired to meet Washington Renewable Portfolio Standard (RPS) and
10 the Clean Energy Transformation Act (CETA) that would have been otherwise sold. This
11 adjustment ensures Idaho customers are made whole from the loss of any revenue resulting
12 from the retirement of RECs which would have otherwise been sold, absent the RPS
13 Standard and/or CETA needs. This amount has increased versus prior years given the
14 increasing REC retirement requirements of CETA. The $305,405 interest amount
15 represents interest for the twelve-month period July 1,2024 through June 30,2025. Interest
16 for the 12-month period was calculated using the Customer Deposit Rate of 5% for the
17 entire review period,per prior Commission order.
18 Q. What rebate rate is the Company proposing to be effective October 1,
19 2025?
20 A. The Company is proposing a uniform cents per kilowatt-hour PCA rebate
21 rate of 0.3010 to be effective October 1, 2025. Page 1 of Exhibit No. AMB-1 shows the
22 calculation of the proposed rate. The proposed rate is designed to rebate the following as
23 shown in Table No. 2 below:
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Avista Corporation

I Table No. 2—Amortization Balance Calculation
2 Power Supply Deferrals(July 2024 - June 2025) $ (4,853,052)
Renewable Energy Credit Retirement Benefit $ (2,755,522)
3 Interest $ (305,405)
Total Deferral Balance $ (7,913,979)
4
Unamortized Balance from Previous Deferrals (prior to July 1, 2024) $ (4,044,204)
5 Amortization July 2024- June 2025 $ 960,538
Interest $ (304,792)
6 Total Remaining Amortization Balance $ (3,388,458)
7
PCA Year Ending June 30, 2025 $ (11,302,437)
8
9 Projected Amortization and Total Interest(July 2025-September 2025) $ 1,742,763
10 TOTAL BALANCE FOR AMORTIZATION $ (9,559,674)
11 After applying the conversion factor related to Commission fees and uncollectible
12 customer accounts to the "Total Balance for Amortization" shown above, the resulting
13 credit balance of$9,559,674 is divided by forecasted kilowatt-hours to derive the proposed
14 rebate rate of 0.3 01¢ per kilowatt-hour.t
15 Q. What is the impact of the proposed PCA rate decrease by rate schedule?
16 A. Table No. 3 below shows the effect of the proposed PCA rate decrease by
17 rate schedule. The proposed rebate rate is 0.3010 per kilowatt-hour, which is 0.0550 per
18 kilowatt-hour less than the existing rebate rate of 0.2460 per kilowatt-hour. The overall
19 decrease in revenue is approximately 0.5%, or$1.756 million.
Total Balance for Amortization($9,873,781)divided by conversion factor 0.996223 =($9,911,146).
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Avista Corporation

I Table No. 3—Revenue Impact by Rate Schedule
2 Schedule Percent change
Type of Service Number on Billed Revenue
3 Residential 1 -0.4%
4 General Service 11,12 -0.6%
Large General Service 21,22 -0.4%
5 Extra Large General Service 25 -0.9%
Clearwater 25P -0.6%
6 Pumping Service 31,32 -0.4%
Street&Area Lights 41-49 -0.1%
7 Total -0.5%
8 Q. What will be the impact of the proposed change on an average
9 residential customer?
10 A. Residential customers using an average of 939 kilowatt-hours per month
11 would see their monthly bills decrease from $104.30 to $103.79, a decrease of$0.51 per
12 month, or 0.5%. This bill impact does not consider the effects of other filings Avista has
13 made that will go into effect on October 1, 2025.
14 Q. What programs are in place to help Avista customers pay or manage
15 their bills?
16 A. The Company has several programs available to assist customers with
17 managing their utility bills.Avista's Comfort Level Billing (CLB)plan,based on historical
18 charges or an estimate of future charges,2 approximates a monthly average of the
19 customer's estimated annual billings. The concept of this plan is to help the customer
20 budget for their Avista bill throughout the year by leveling out the seasonal highs and lows
21 of their monthly bills. Additionally, the Company's Customer Assistance Referral and
22 Evaluation Services (CARES) program provides specialized assistance to customers
2 Estimates of future charges are only used when the premise does not have adequate usage history to
determine approximate annual average use.
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Avista Corporation

I encountering medical crises,unemployment, or other personal or financial hardships. This
2 program offers customers access to specifically-trained CARES representatives who
3 provide support to the customer by way of payment arrangements, medical certificates, or
4 referrals to local Community Action Agencies (CAAs, or Agencies) or other organizations
5 for help with—among other things—housing,utilities, and medical assistance.
6 Idaho customers who have children, elderly or infirmed persons living in the
7 household may also qualify for Winter Moratorium between the months of December
8 through February each year. From December 1 through February 28, customers are not
9 required to pay their bills in-full and can instead opt to defer payment throughout these
10 winter months or make partial payments. The Winter Payment Plan, offered from
11 November 1 through March 31 annually, provides for lower winter bill payments by
12 allowing customers to make monthly payments equal to one-half of the levelized bill
13 amounts, with the balance then due in-full, or a new payment arrangement established on
14 the balance, by April 1st. In addition, the Company also offers flexible due dates and both
15 short-term as well as long-term payment arrangements for customers having difficulty
16 paying their bills.
17 Avista also has many convenient billing and payment options available for its
18 customers. For billing purposes, all customers have the opportunity to designate their
19 preferred communication method for their billing and associated reminders—such options
20 include paper copy, e-mail, or even text messaging. For payments, the Automatic Payment
21 Service (APS) allows customers to opt to have their monthly utility bill deducted directly
22 from their checking account or credit card automatically each month. Other payment
23 services include debit and credit card service, check-by-phone or over the web, preferred
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Avista Corporation

I due date, electronic billing, pay-by-text, as well as many local drop boxes or pay stations
2 for cash or check payments.
3 For Avista's low-income customers, the Federal Low-Income Home Energy
4 Assistance Program(LIHEAP)provides funding to assist them in paying their electric and
5 natural gas bills. These funds are distributed through local CAAs. Additionally, Idaho's
6 Housing Preservation Program offers emergency assistance for utility and/or rental
7 payments for qualifying low-income households.3 Lastly, Avista's Project Share is a
8 voluntary contribution option allowing customers to contribute donations that are then
9 distributed through local Agencies to customers experiencing financial hardship.
10 Q. Does that conclude your pre-filed direct testimony?
11 A. Yes, it does.
s The Housing Preservation Program,offered by Idaho Housing and Finance Association(by award from the
U.S.Department of the Treasury),can provide up to 15 months of utility and/or rental payment assistance for
Idaho renters who earn less than 80%of the Area Median Income(AMI).www.idahohousin .cg om/hpp/
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Avista Corporation