20250919APPLICATION.pdf

RECEIVED
September 19, 2025
ERIKA K. MELANSON IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11560
Street Address for Express Mail:
11331 W CHINDEN BVLD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION STAFF'S )
APPLICATION TO UPDATE AVISTA'S COST ) CASE NO. AVU-E-25-14
OF CAPITAL INPUTS IN THE "SURROGATE )
AVOIDED RESOURCE" METHODOLOGY ) APPLICATION
Pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA") and the
implementing regulations of the Federal Energy Regulatory Commission ("FERC"), the Idaho
Public Utilities Commission ("Commission") has approved a Surrogate Avoided Resource
("SAR") Methodology for calculation of avoided cost rates at which PURPA qualifying facilities
("QFs")under published rate eligibility caps are paid by Idaho Power Company("Idaho Power"),
Avista Corporation ("Avista"), and PacifiCorp. Avista's latest general rate case (Case No. AVU-
E-25-01)has triggered an update of Avista's cost of capital inputs in the SAR Methodology.
In support of this Application, Commission Staff("Staff') represents as follows:
I. BACKGROUND.
I. The Commission calculates and publishes SAR Methodology rates for QFs that are
under published rate eligibility caps. The SAR Methodology uses each utility's approved cost of
capital from its latest general rate case.
2. On August 29, 2025, the Commission issued Order No. 36741, the final order in
Avista's most recent general rate case (Case No. AVU-E-25-01). The conclusion of the case has
APPLICATION 1

triggered an update of Avista's cost of capital inputs in the SAR Methodology to reflect the
approved capital structure and cost of capital as shown in the table below.
Capital Weighted
Component Structure Cost Cost
Total Debt 50.00% 4.95% 2.48%
Conmion Equity 50.00% 9.60% 4.80%
Total 100.00% 7.280%
II. THE UPDATES.
3. Staff first updated the weighted cost of capital on Tab "AvistaCapCarChg" of the
SAR Methodology model, which calculates Avista's Carrying Charge Rate. Next, Staff updated
Cell E64 (UTILITY WEIGHTED COST OF CAPITAL) and Cell E65 (CAPITAL CARRYING
CHARGE) of Tab "AVOID NEW". Lastly, Staff checked Cell D37 (UTILITY WEIGHTED
COST OF CAPITAL) and Cell D50 (CAPITAL CARRYING CHARGE) of Tab "AVOID NEW"
to ensure updates have been correctly used.
4. Included in this Application are the following Attachments:
a. An updated SAR model with all the updates incorporated as mentioned above.
b. Attachment A (Avista Avoided Cost Rates for New Contracts).
c. Attachment B (Avista Avoided Cost Rates for Renewal Contracts).
III. MODIFIED PROCEDURE.
5. Staff believes that a hearing is not necessary to consider the issues presented herein
and respectfully requests that this Application be processed under Modified Procedure; i.e., by
written submissions rather than by hearing. Commission Rules of Procedure 201-204. If,however,
the Commission determines that a technical hearing is required, the Staff stands ready to prepare
and present its testimony in such hearing.
APPLICATION 2

IV. COMMUNICATIONS AND SERVICE OF PLEADINGS.
6. Communications and service of pleadings, exhibits, orders, and other documents
relating to this proceeding should be sent to the following:
Erika K. Melanson Yao Yin
Deputy Attorney General for the Idaho Public Idaho Public Utilities Commission
Utilities Commission P.O. Box 83720
P.O. Box 83720 Boise, ID 83702-0074
Boise, Idaho 83702-0074 E-Mail:yao. ingpuc.idaho.gov
E-mail: erika.melanson(abpuc.idaho.gov
REQUEST FOR RELIEF.
Staff respectfully requests the Commission issue an order: (1)authorizing this matter to be
processed by Modified Procedure; (2)updating the SAR Methodology model as described herein,
and (3) approving the updated SAR Methodology avoided cost rates shown in the attachments to
this Application.
Respectfully submitted this 19t" day of September 2025.
En a K. Mel nson
Deputy Attorney General
APPLICATION 3

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 19th day of September 2025, I served the foregoing
APPLICATION, in Case No. AVU-E-25-14, Via Electronic Mail to the following:
David Meyer
Shawn Bonfield
John Lyons
Avista Corporation
P.O. Box 3727
1411 East Mission Avenue
Spokane, WA 99220-3727
[e-mail]
Shawn.bonfield(ab avistacorp.com
[e-mail]
avistadocketskavistacorp.com
KERI J. HAWKER
Legal Assistant
APPLICATION 4