20090317Staff 63-89 to AVU.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
ISB NO. 1895
KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6618
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorneys for the Commission Staff
RECE D
2009HAR I 7 PH 2: I 6
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VIST A CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN THE
STATE OF IDAHO.
)
) CASE NO. A VU-E-09-1
) A VU-G-09-1
)
) FOURTH PRODUCTION
) REQUEST OF THE
) COMMISSION STAFF
) TO AVISTA CORPORATION
)
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record,
Kristine A. Sasser, Deputy Attorney General, requests that Avista Corporation (Company; Avista)
provide the following documents and information on or before TUESDAY, APRIL 7,2009.
This Production Request is to be considered as continuing, and A vista is requested to
provide, by way of supplementar responses, additional documents that it or any person acting on
its behalf may later obtain that wil augment the documents produced.
FOURTH PRODUCTION REQUEST
TO AVISTA MARCH 17,2009
Please provide answers to each question, and supporting workpapers that provide detail or
are the source of information used in calculations. The Company is reminded that responses
pursuant to Commission Rules of Procedure must include the name and phone number of the
person preparing the document, and the name, location and phone number of the record holder
and if different the witness who can sponsor the answer at hearing if need be. Reference IDAPA
31.01.01.228.
In addition to the written copies provided as response to the questions, please provide all
Excel and electronic fies on CD with formulas activated.
REQUEST NO. 63: Please provide a detailed explanation and all supporting executable
electronically formatted analysis ilustrating:
a. Why the Company has determined it necessary to raise the Schedule 146 "Annual
Minimum" from $30,055 to $33,183. Please provide all electronic analysis along with a detailed
description of the methodology for determining the prudency of this change.
b. How the Company has measured the impact to Schedule l46 customers caused by
raising the "Annual Minimum" from $30,055 to $33,183.
REQUEST NO. 64: In Hirschkorn's Testimony, page 26, lines 11-17, he says "Including
a conservative level of 50.0 cents per therm for the cost of gas and pipeline transportation, the
proposed increase to Schedule 146 rates represents an average increase of 2.0% in those
customers' total gas bil, which is then expressed on a relatively comparable basis to the proposed
increase (decrease) to the other (sales) service schedules, and the overall proposed increase of
3.0%." Please provide a detailed explanation and all supporting executable electronically
formatted analysis ilustrating:
a. How the Company has come up with each component of the combined cost of gas and
pipeline transportation estimate of 50.0 cents per thermo Also explain how you have determined
this to be a conservative leveL.
FOURTH PRODUCTION REQUEST
TO AVISTA 2 MARCH 17,2009
b. Why this comparison is used to qualify and quantify the reasonableness of the
Company's proposed increase even though the Company has no involvement in Schedule 146
outside of the services it directly provides (e.g. - distribution transportation service).
REQUEST NO. 65: In Hirschkorn's Testimony, page 27, lines 1-6, a char is shown
displaying the "Relative rates of Retum by Service Schedule," please provide a detailed
explanation and all supporting executable electronically formatted analysis supporting the
Company's decision to move Schedule 146 away from full cost of service while moving all the
other Schedules toward full cost of service.
REQUEST NO. 66: In Hirschkorn's Testimony, page 27, lines 18-20, he says "Large
General Service Schedule 111 has a four-tier declining-block rate structure and is generally for
customers who consistently use over 200 therms/month." Aside from the rate design, please
provide a detailed explanation and all supporting executable electronically formatted studies and
analysis ilustrating how the Company provides guidance that should always ensure its customers
are on the most appropriate rate schedule.
REQUEST NO. 67: In Hirschkorn's Testimony, page 28, lines 24-26, he says "The
Company believes that the customer/basic charge should recover a reasonable portion of the fixed
costs of providing service." Please provide a detailed explanation and all supporting executable
electronically formatted analysis ilustrating what percent of fixed costs the Company considers a
"reasonable portion" to be collected in the customer/basic charge.
REQUEST NO. 68: In Hirschkorn's Testimony, page 29, lines 1-4, he says "The
monthly cost associated with recovery of only the average meter and service line for these
customers is $6.03 per month." Please provide a detailed explanation and all supporting
executable electronically formatted analysis ilustrating exactly how the basic charges for
Schedule 101 were calculated and whether the methodology for calculating this charge has been
accepted in Case Nos. A VU-G-04-1 and A VU-G-08-1.
FOURTH PRODUCTION REQUEST
TO AVISTA 3 MARCH 17, 2009
REQUEST NO. 69: In Hirschkorn's Testimony, page 30, lines 2-12, he describes how
the Company arrives at its minimum charge for Schedule 111. Please provide a detailed
explanation and all supporting executable electronically formatted analysis ilustrating why the
process described is appropriate in determining the minimum charge. (e.g. - why was 192 therms
used, is there substantial shifting between schedules, etc.)
REQUEST NO. 70: In Hirschkorn's Testimony, page 30, lines 6-9, he says "This
application maintains the present (breakeven) relationship between the schedules, and wil
minimize customer shifting between the Schedules." Please provide a detailed explanation and
all supporting executable electronically formatted analysis ilustrating the direct meaning of the
breakeven relationship, how the breakeven prevents shifting, and provide information for
customers who have transferred between Schedule ILL and Schedule 101 in the last two years.
For every customer please show: transfer date, Schedule, median monthly usage, and average
monthly usage.
REQUEST NO. 71: In Hirschkorn's Workpapers BJH-G-10 and BJH-G-11 the
Company has aggregated the classes, by Schedule, for a column called "Allocated Actual
Unbiled Therms" and used the unbiled therms in the "Add Sep '08 Unbiled" and "Less Sep '07
Unbiled" columns of Work paper BJH-G-8. This is par of the calculation for determining the
final unbiled therm adjustment. Please provide a detailed explanation and all supporting
executable electronically formatted analysis ilustrating why the Company has not aggregated the
class allocating percentages (% for Allocating Actual Total Unbiled Therms) by Schedule from
these same Workpapers (BJH-G-lO and BJH-G-11), to eventually be utilized in determining the
final unbiled therm adjustment for Workpaper BJH-G-8.
REQUEST NO. 72: In Hirschkorn's Testimony, page 15, lines 26-27, page 16, lines 1-2,
he says "The Company examined the average anual usage of its Idaho residential all-electric (no
natural gas) customers that have received LIHEAP assistance and those that have not received
assistance. Over a recent twelve month period, the average anual usage for customers that have
received assistance was 1,900 KWhs greater than for those customers that did not." Please
FOURTH PRODUCTION REQUEST
TO AVISTA 4 MARCH 17, 2009
provide a detailed explanation and all supporting executable electronically formatted analysis
ilustrating whether the Company has studied similar weather normalized comparisons for the
combined electric and gas customers to evaluate how usage trends may have changed over time
and amongst different users.
REQUEST NO. 73: In Knox's Exhibit No. 11, Schedule No.5, page 1, lines 11-16, she
says "Traditionally customer accounting, customer information, and sales expenses are included
in the distribution fuction and administrative and general expenses and general plant rate base
are allocated to all functions. In this study I have created a separate functional category for
common costs. Administrative and general costs that canot be directly assigned to the other
functions have been placed in this category." In an effort by Staff to maintain consistency within
each rate case's Cost of Service study, please provide a detailed explanation and all supporting
executable electronically formatted analysis ilustrating:
a. Why the Company has determined that it is necessary to create a separate functional
category for common costs that cannot be directly assigned to the other functions.
b. How this methodology change of creating a separate fuctional category for common
costs in the cost of service study impacts the allocation of costs to each class and the final
Revenue Requirement in comparison to what has been traditionally used and accepted by the
Idaho Commission in Case Nos. A VU-G-04-1 and A VU-G-08-1.
c. Which administrative and general costs that canot be directly assigned to the other
fuctions have now been placed in the new common costs category.
REQUEST NO. 74: In Knox's Exhibit No. 11, Schedule No.5, page 3, lines 17-19, she
says "The gas scheduling process includes transportation customers, so estimated scheduling
dispatch labor expenses are allocated by throughput. The remaining gas supply deparment
expenses are allocated by sales volumes." Please provide a detailed explanation and all
supporting executable electronically formatted analysis ilustrating the process the Company uses
to determine the way the gas supply deparment expenses are allocated by sales volumes vs.
throughput. In this response, please indicate the date all corresponding data was collected to make
this determination.
FOURTH PRODUCTION REQUEST
TO AVISTA 5 MARCH 17,2009
REQUEST NO. 75: In Knox's Exhibit No. 11, Schedule No.5, page 5, lines 4-5, she
says "Meter investment costs are allocated using the number of customers weighted by the
relative current cost of meters in service at December 31, 2007." Please provide a detailed
explanation and all supporting executable electronically formatted analysis pertaining to
Workpapers TLK-G-70 through TLK-G-73. Specifically, describe how the Company can
quatitatively assume each class's "Orig Cost" and "Install Cost" to be homogeneous between
rate Schedules when determining the "2007 Total Cost."
REQUEST NO. 76: In Knox's Exhibit No. 11, Schedule 5, page 5, lines 5-7, she says
"Services investment costs are allocated using the number of customers weighted by the relative
curent cost of typical service installations." Please provide a detailed explanation and all
supporting executable electronically formatted analysis ilustrating:
a. The quantifiable difference between a Washington and Idaho typical service
installation cost, specifically given that Washington's costs were used in Workpaper TLK-G-74.
b. How the Company quantifiably assumes that the 2006 components shown on
Workpaper TLK-G-74 ilustrating the "Current Typical Services Cost" are adequate to estimate
the Allocation Factors used for the 2008-2009 cost of service study.
REQUEST NO. 77: In Knox's Workpaper TLK-G-39, used to determine the
proportional weight of large and small main expenses used in the Cost of Service Study, the
weighting for more recent main costs are not weighted heavier than prior year costs. Please
explain why the Company has not determined that it may be necessar to weight the value of
more current main costs heavier than those that may have occurred in 1957. (Knox, Workpapers
TLK-G-39 through TLK-G-45).
REQUEST NO. 78: In Knox's Exhibit No. 11, Schedule No.5, page 5, lines 14-17, she
says "Other administrative and general expenses are allocated 50% by annual throughput
(classified commodity related) and 50% by the sum of operating and maintenance expenses not
including purchased gas cost or administrative & general expenses." Please provide a detailed
explanation and all supporting executable electronically formatted analysis ilustrating how
FOURTH PRODUCTION REQUEST
TO AVISTA 6 MARCH 17, 2009
allocating 50% of operating and maintenance by anual throughput and 50% by the sum of
operating and maintenance expenses was determined to be the appropriate allocation.
REQUEST NO. 79: In Knox's Exhibit No. 11, Schedule No.5, page 5, lines 22-23,
page 6, line 1, she says "The revenue from these special contract customers has been segregated
from general rate revenue and allocated back to all the other rate classes by relative rate base."
Please provide a detailed explanation and all supporting executable electronically formatted
analysis ilustrating how the revenue from these customers is segregated from general rate
revenue and allocated back to all the other rate classes by relative rate base. Also, if any costs
were attributable to special contract customers, please provide a detailed explanation and all
supporting executable electronically formatted analysis ilustrating how costs were proportionally
allocated back to the other rate classes by relative rate base.
REQUEST NO. 80: In Knox's Testimony page 6, lines 17-23, page 7, lines 1-8, she talks
about the "change from a 25-year to a 30-year average for normal degree days." In an effort by
Staff to maintain consistency within each rate case's Cost of Service study, please provide a
detailed explanation and all supporting executable electronically formatted analysis (with the
exception ofWC_0908_w_30 yr rolling.xls) ilustrating:
a. The "concerns in another jurisdiction that twenty-five years may be insuffcient to
determine 'normaL'"
b. A comparison of the change from a 25-year to a 30-year average for normal degree
days. In your response include all comparisons ilustrating how the final Revenue Requirement
for gas and electric is different with respect to the change from a 25-year to a 30-year average for
normal degree days.
c. The long term trend in regional temperatures. In your response include an explanation
of how the trend and variabilty is measured and why more recently occurring variabilty is less
important than long-term climatological trends when setting rates, which frequently change on an
anual basis given more recent rate case trends.
FOURTH PRODUCTION REQUEST
TO AVISTA 7 MARCH 17, 2009
REQUEST NO. 81: In Hirschkorn's Testimony, page 30, lines 15-l6, he describes how
the Company proposes to recover the increase of $7,000 to Interrptible Service Schedule 131.
Please provide a detailed explanation and all supporting executable electronically formatted
analysis ilustrating why the Company has determined it necessar to increase the Deficiency
Charge. In your response please provide three years of occurences where a Deficiency Charge
was implemented on customers' bils and explain why the proportional relationship between the
Deficiency Charge and Monthly Rate has changed.
REQUEST NO. 82: Please provide electric and natural gas forward prices for July 2009
through June 2010 contract months (the pro forma period) as reported daily for all settlement
dates during the period 11112007 through the present for each of the locations included in the
forward price data previously provided in the workpapers of Clint Kalich. Please provide the data
in an electronic Excel format. Please include any analysis used to prepare, adjust or modify the
data for use in AURORA. Please cite the source for the price data and discuss any adjustments or
assumptions made by A vista in preparing the data.
REQUEST NO. 83: Please provide AURORA summary output showing results if the
most recent three month average of natural gas forward prices is used for the pro forma period
rather than the gas prices used in preparing the Company's rate case Application (September 1,
2008 to November 30, 2008). Provide the output in a format similar to that used in Kalich's
Exhibit No.5, Schedule 2.
REQUEST NO. 84: Please provide AURORA summar output showing results if a
weather normalized test year system load (October 1, 2007 through September 30, 2008) is used
rather than the July 2009 through June 2010 pro forma system load. Provide the output in a
format similar to that used in Kalich's Exhibit No.5, Schedule 2.
REQUEST NO. 85: Please provide AURORA summar output showing results if term
power and natural gas transactions (less than 18 months) are excluded from the analysis. Provide
the output in a format similar to that used in Kalich's Exhibit No.5, Schedule 2.
FOURTH PRODUCTION REQUEST
TO AVISTA 8 MARCH 17,2009
REQUEST NO. 86: Please provide AURORA summary output showing results if all
term power and natural gas transactions (less than 18 months) are included in the analysis, but
updated to include all currently effective term transactions rather than those that were in effect at
the time the Company fied its rate case Application. Provide the output in a format similar to
that used in Kalich's Exhibit No.5, Schedule 2.
REQUEST NO. 87: Please provide a list showing all outstanding purchases of natural
gas made to date intended for electric production in the July 2009 through June 2010 pro forma
period. For each purchase show the quantity, the purchase price per MMBtu, the date of the
purchase, and the delivery date.
REQUEST NO. 88: Please provide copies of all 2008 and 2009 monthly variance
analysis reports completed to date showing how actual monthly loads in 2008 and 2009 compare
to forecasted loads. Please provide a brief narrative to explain the variance in each month or
season. Please identify any sectors whose load is growing faster or slower than expected and
discuss reasons for the changes in expected growth rate.
REQUEST NO. 89: On what date was the July 2009 through June 2010 pro forma load
forecast used in AURORA modeling runs prepared? When will the next load forecast covering
the pro forma period be prepared and available? If a revised load forecast covering the pro forma
period has been prepared since the Company submitted its rate case Application, please provide a
copy.
'-'7H
Dated at Boise, Idaho, this I i - day of March.
~ti~cua.. £,AALA..
Kristine A. Sasser
Deputy Attorney General
Technical Staff; Matt Elam/63-81
Rick Sterling/82-89
i:umisc:prodreq/avue_g09.1 ksmerps prod req4.doc
FOURTH PRODUCTION REQUEST
TO AVISTA 9 MARCH 17, 2009
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF MARCH 2009,
SERVED THE FOREGOING FOURTH PRODUCTION REQUEST OF THE
COMMISSION STAFF TO AVISTA, IN CASE NOS. AVU-E-09-01 & AVU-G-09-01, BY
MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
DAVIDJ. MEYER
VICE PRESIDENT AND CHIEF COUNSEL
A VIST A CORPORATION
PO BOX 3727
SPOKANE W A 99220
E-MAIL: david.meyeraYavistacorp.com
DEAN J MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE ID 83701
E-MAIL: joeaYmcdevitt-miler.com
CONLEY E WARD
MICHAEL C CREAMER
GIVENS PURSLEY LLP
PO BOX 2720
BOISE ID 83701-2720
E-MAIL: cew(fgivenspursley.com
mcc(fgivenspursley.com
BETSY BRIDGE
ID CONSERVATION LEAGUE
710 N SIXTH STREET
POBOX 844
BOISE ID 83701
E-MAIL: bbridge(fwildidaho.org
KELL Y NORWOOD
VICE PRESIDENT - STATE & FED. REG.
A VISTA UTILITIES
PO BOX 3727
SPOKANE WA 99220
E-MAIL: kelly.norwoodaYavistacorp.com
SCOTT ATKINSON
PRESIDENT
IDAHO FOREST GROUP LLC
171 HIGHWAY 95 N
GRANGEVILLE ID 83530
E-MAIL: scottaaYidahoforestgroup.com
DENNIS E PESEAU, Ph.D.
UTILITY RESOURCES INC
SUITE 250
1500 LIBERTY STREET SE
SALEM OR 97302
E-MAIL: dpeseau(fexcite.com
3fiQ. .K'~
SECRETARY
CERTIFICATE OF SERVICE