20250910Staff Comments.pdf

RECEIVED
September 10, 2025
JEFFREY R. LOLL IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11675
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION'S FIXED COST ) CASE NO. AVU-E-25-08
ADJUSTMENT (FCA) MECHANISM )
ANNUAL RATE ADJUSTMENT FILING )
COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its attorney of record, Jeffrey R. Loll, Deputy Attorney
General, submits the following comments.
BACKGROUND
On July 31, 2025, Avista Corporation ("Company") applied to the Commission
requesting approval of fixed cost adjustment("FCA") deferrals for the period of July 1, 2024,
through June 30, 2025, a per kilowatt-hour("kWh") FCA surcharge of 0.0180 for the residential
group (Schedule I customers), and a per kWh FCA surcharge of 0.0580 for the non-residential
group (Schedule 11, 12, 21, 22, 31 and 32 customers)to be effective October 1, 2025
("Application"). If the new FCA rates are approved as filed, an average residential customer
STAFF COMMENTS 1 SEPTEMBER 10, 2025

using 939 kWh of electricity a month would expect their monthly bill to increase by $1.38, or
about 1.3%.
The FCA is a rate adjustment mechanism designed to break the link between the energy a
utility sells and the revenue it collects to recover fixed costs—such as infrastructure and
customer service, which do not vary with energy use, output, or production, and remain
relatively stable between rate cases—thus decoupling the utility's revenues from its customers'
energy usage. This decoupling removes a utility's incentive to increase sales to increase revenue
and profits and encourages energy conservation.
The Commission originally approved a three-year pilot program of the Company's FCA
as part of the approved settlement of the Company's 2015 rate case. Order No. 33437 at 10. The
parties to the Company's rate case agreed to review the program's effectiveness at the end of its
second full year, to ensure the program was functioning as intended. On June 15, 2018, the
Commission approved an addendum to the settlement that extended the term of the Company's
FCA pilot for an additional year. Order No. 34085. On December 13, 2019, the Commission
authorized the Company to extend its FCA mechanism for both gas and electric customers
through March 31, 2025. Order No. 34502. On September 27, 2024, the Commission granted
the Company authorization to adjust its FCA rates for electric service from October 1, 2024,
through September 30, 2025. Order No. 36335 at 5.
The Company represents that the FCA rate for the residential group is proposed to change
from a present rebate rate of 0.1290 to a proposed surcharge rate of 0.0180 per kWh,
representing a $2 million, or 1.2% increase to Schedule 1 customers. Application at 1-2. The
Company states that the proposed surcharge for the residential group is designed to recover
$242,209 from customers. Id. at 6.
The Company represents that the FCA rate for the non-residential group is proposed to
change from a present surcharge rate of 0.0040 to a proposed surcharge rate of 0.0580 per kWh
representing a $0.6 million, or 0.5%, increase to the non-residential group customers. Id at 1-2.
The Company states that the proposed surcharge for the non-residential group is designed to
recover$649,636 from customers. Id. at 7.
STAFF COMMENTS 2 SEPTEMBER 10, 2025

STAFF ANALYSIS
Staff reviewed the Company's Application and calculations of its residential and non-
residential FCA rates, along with the Company's workpapers and responses to production
requests. After an examination of all documents, Staff recommends that the Commission
approve the Company's proposed Tariff Schedule 75 surcharge for the residential customer
group and surcharge for the non-residential customer group.
Staff reviewed the FCA deferral balances and associated rates for both residential and
non-residential groups to confirm they have been calculated correctly by the Company. Staff
reviewed the amortization from the prior deferral balance, the kWh sales for the FCA year, new
and existing customer counts, the revenue from fixed cost collections, the interest calculations,
and the submitted revenue reports. Staff verified the authorized amounts used to calculate the
deferral were the same used to determine base rates authorized during the deferral period.
In its Application, the Company proposed a rate surcharge for both its residential electric
customers and its non-residential electric customer groups based on the amount of deferred
revenue recorded for each group between July 1, 2024, and June 30, 2025. For the residential
customers, the Company proposed to change from a present rebate rate of 0.1290 to a proposed
surcharge rate of 0.0180 per kilowatt-hour. For the non-residential group, the Company
proposed to change from a present surcharge rate of 0.0040 to a proposed surcharge rate of
0.0580 per kilowatt-hour. The residential customer group rate change represents a $2 million, or
1.2%, increase to Schedule 1 customers, and the non-residential customer group rate change
represents a$0.6 million, or 0.5% increase. Id at 6. The combined effect of expiring FCA rates
and the proposed 2025 rates are shown in Table No. 1 below:
Table No. 1: Present and Proposed Changes
Expiring Present Proposed FCA Change in FCA
FCA Revenue Revenue Revenue
Residential ($1,735,832) $242,209 $1,978,041
Non-Residential $44,802 $649,636 $604,834
STAFF COMMENTS 3 SEPTEMBER 10, 2025

Energy Consumption Drivers
The proposed FCA deferrals for residential electric customers are the result of lower
monthly use-per-customer than the use-per-customer that was embedded in the 2022 test year.
The FCA deferrals for non-residential electric customers were also due to slightly lower monthly
use-per-customer than the use-per-customer that was embedded in the 2022 test year. Id at 6.
Weather is a significant factor in the FCA. During the FCA deferral period, the
Company's service territory experienced warmer than normal conditions and fluctuating heating
and cooling periods. This caused residential and non-residential customers to use differing
amounts of electricity than during normal weather. Residential energy usage is more sensitive to
weather fluctuations than non-residential energy usage, thus the greater change for the residential
customer group. Id. at 6.
Also, since the 2022 test year used to set 2024 rates, Idaho customers have achieved
energy efficiency savings from participating in the Company's Demand Side Management
programs. Id. at 6.
Overall Impact of Four Filings (PCA, ResEx, EE Rider, and FCA)Effective October 1,
2025
The Company proposed four electric rate adjustments effective October 1, 2025. If
approved as filed, the proposed FCA filing, AVU-E-25-08, will increase electric revenues by
about$2.6 million(0.6% increase). The Company's Power Cost Adjustment("PCA"), AVU-E-
25-07, if approved, will decrease the Company's electric revenues by $1.8 million(0.6%
decrease). The third proposed filing, Bonneville Power Administration Residential Exchange
Program ("ResEx"), AVU-E-25-09, if approved, will increase electric revenues by $1.9 million
(0.6% increase). The final proposed filing, Schedule 91, Energy Efficiency Rider Adjustment
("EE Rider"), AVU-E-25-10, if approved, will increase electric revenues for participants by $3.6
million(1.2% increase). Avista Customer Notice at 1.
The net effect of Company's four filings (PCA, FCA, ResEx, and EE Rider) will increase
electric revenues by about $6.3 million (2.0% increase). The average residential electric
customer's monthly bill may increase by$3.43 or 3.3%.Id. Table No. 2 summarizes the overall
impact to electric revenues of the four filings:
STAFF COMMENTS 4 SEPTEMBER 10, 2025

Table No. 2: Summary of Overall Impact to Electric Revenues
Filing Change in Revenues % Change
FCA $2.6 million 0.8%
PCA ($1.8 million) -0.6%
ResEx Credit $1.9 million 0.6%
EE Rider $3.6 million 1.2%
Total $6.3 million 2.0%
CUSTOMER NOTICE AND PRESS RELEASE
The Company's press release and customer notice were included with its Application.
Staff reviewed the documents and determined both meet the requirements of Rule 125 of the
Commission's Rules of Procedure.' See IDAPA 31.01.01 .125. The notice was included with
bills mailed to customers beginning August 1, 2025, and ending August 29, 2025.
The Commission set a comment deadline of September 10, 2025. Some customers in the
last billing cycles may not have received or had adequate time to submit comments before the
deadline. Customers should have the opportunity to file comments and have those comments
considered by the Commission. Staff recommends that the Commission consider late filed
comments from customers. As of September 10, 2025, no customer comments had been filed.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's FCA filing.
Specifically, Staff recommends that the Commission approve the Company's proposed Tariff
Schedule 75 with a residential surcharge rate of 0.0 18 0 per kWh and non-residential surcharges
rate of 0.0580 per kWh for electric service from October 1, 2025, through September 30, 2026.
1 The press release and customer notice addressed the following cases.Electric:AVU-E-25-07 Power Cost
Adjustment(PCA),AVU-E-25-08 Fixed Cost Adjustment(FCA),AVU-E-25-09 Bonneville Power Administration
Residential Exchange(ResEx),and AVU-E-25-10 Energy Efficiency.Natural Gas:AVU-G-25-05 Fixed Cost
Adjustment(FCA),AVU-G-25-06 Energy Efficiency,and AVU-G-25-07 Purchased Gas Cost(PGA).
STAFF COMMENTS 5 SEPTEMBER 10, 2025

Respectfully submitted this loth day of September 2025.
J frey R. Loll
Deputy Attorney General
Technical Staff. Laura Conilogue, Michael Ott, Curtis Thaden
L\Utility\UMISC\Comments\AVU-E-25-08 Comments
STAFF COMMENTS 6 SEPTEMBER 10, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ' DAY OF SEPTEMBER
2025, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN
CASE NO. AVU-E-25-08, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
PATRICK EHRBAR DAVID J. MEYER
DIR OF REGULATORY AFFAIRS VP & CHIEF COUNSEL
AVISTA CORPORATION AVISTA CORPORATION
PO BOX 3727, MSC-27 PO BOX 3727, MSC-10
1411 E. MISSION AVE 1411 E. MISSION AVE
SPOKANE WA 99220-3727 SPOKANE WA 99220-3727
E-mail: Patrick.ehrbargavistacorp.com E-mail: david.meyergavistacorp.com
avistadockets a,avistacorp.com
PATRICIA JORDAN, ECRETARY
CERTIFICATE OF SERVICE