20251030Final_Order_No_36822.pdf

Office of the Secretary
Service Date
October 30,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA ) CASE NO. AVU-G-25-05
CORPORATION'S FIXED COST )
ADJUSTMENT MECHANISM (FCA) ) ORDER NO. 36822
ANNUAL RATE ADJUSTMENT )
On July 31, 2025, Avista Corporation ("Company") applied to the Idaho Public Utilities
Commission ("Commission") for authorization of an adjustment to its Fixed Cost Adjustment
("FCA") rates for natural gas service from November 1, 2025, through October 31, 2026. The
Company requested a November 1, 2025 effective date.
On August 20, 2025, the Commission issued a Notice of Application and Notice of
Modified Procedure, establishing a deadline for public and Commission Staff("Staff") comments,
and a deadline for the Company to file reply comments. Order No. 36729. No public comments
were received. Having reviewed the record in this case, the Commission issues this Order
authorizing FCA rates included in the Company's Application and approving Schedule 175 with
Staffs proposed modifications.
BACKGROUND
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' of providing service,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.
' "Fixed costs"are a utility's costs to provide service, such as infrastructure and customer service,which do not vary
with energy use,output,or production,and remain relatively stable between rate cases.
ORDER NO. 36822 1

THE APPLICATION
The Company proposed to adjust the FCA for Residential customers ("Schedule 101")
from the existing surcharge rate of 1.5060 per therm to 1.7370 per therm. Application at 1. This
change would represent an increase of approximately $0.2 million, or 0.2%, for Schedule 101
customers. Id. at 2.
For Non-Residential customers ("Schedules 111 and 112"), the Company proposed to
revise the current surcharge rate from 1.0060 per therm to 0.6770 per therm, reflecting a decrease
of approximately $0.1 million, or 0.6%, for customers under Schedules 111 and 112. Id.
The Company indicated that the FCA deferral for both Residential and Non-Residential
customers resulted from reduced monthly use per customer, primarily due to the Company's
Demand Side Management Programs. Id. at 6.
The Company stated that it recorded $1,195,606 of deferred revenue in the surcharge
direction for Schedule 101 natural gas customers for the 12-month period ending on June 30,2025.
Id. at 6. The Company stated that the proposed surcharge rate of 1.7370 per therm was expected
to recover $1,319,245 from the Company's Schedule 101 customers.Id.
The Company stated that it recorded $176,144 of deferred revenue in the surcharge
direction for its Schedule 111 and 112 natural gas customers in the same 12-month period. Id. at
7. The Company stated that the proposed rate of 0.677¢ per therm was expected to recover
$191,431 from commercial and industrial customers under Schedules 111 and 112. Id.
STAFF COMMENTS
Staff reviewed the Company's Application, supporting workpapers,and the proposed FCA
Schedule 175, and believed that the Company's FCA natural gas deferral balances and
corresponding rates were accurately calculated. Staff Comments at 3. Staff recommended that the
Commission approve the Company's Application and proposed FCA Schedule 175, with one
exception, effective November 1, 2025.Id.
Staff believed that the non-residential rate presented in Schedule 175 contained a
typographical error. Id. Staff believed that the Application and supporting workpapers reflected a
rate of 0.6770 per therm, rather than 0.6700 per therm. Id. at 4. Staff recommended that the
Company submit a corrected Schedule 175 reflecting a residential group surcharge rate of 1.7370
per therm and a corrected non-residential group surcharge rate of 0.6770 per therm, effective
November 1, 2025.Id. at 4-5.
ORDER NO. 36822 2

COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over the Company and this matter pursuant to Idaho Code
§§ 61-501, 61-502 and 61-503. The Commission has the express statutory authority to investigate
rates, charges, rules, regulations, practices, and contracts of public utilities and to determine
whether they are just, reasonable, preferential, discriminatory, or in violation of any provision of
law, and may fix the same by order. Idaho Code §§ 61-502, 61-503.
The Commission has reviewed the record and finds it fair,just, and reasonable to approve
the Company's Application with the proposed FCA Residential surcharge rate of 1.7370 per therm,
and the proposed FCA Non-Residential surcharge rate of 0.6770 per therm, effective November
1,2025.Accordingly,we find it reasonable to approve Schedule 175,with Staff's proposed change
to correct the typographical error in the Non-Residential rate. The Company shall submit the
updated Schedule 175 as a compliance filing in this case. The Commission also finds the Company
correctly calculated its deferrals for July 1, 2024, through June 30, 2025.
ORDER
IT IS HEREBY ORDERED that the Company's request for a FCA Residential surcharge
rate of 1.7370 per therm, and a FCA Non-Residential surcharge rate of 0.6770 per therm, is
approved effective November 1, 2025.
IT IS FURTHER ORDERED that the Company's proposed Schedule 175 - Fixed Cost
Adjustment Mechanism -Natural Gas is approved with Staff s proposed modification.
IT IS FURTHER ORDERED that the Company shall submit the updated Schedule 175 as
a compliance filing in this case.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration.Idaho Code § 61-626.
ORDER NO. 36822 3

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30ffi day of
October 2025.
G
Grp
DWARD LODGE, RE I ENT
HN R. HAMMOND JR., COMMISSIONER
DAYNE HARD , COMMISSIONER
ATTEST-
;
Laura Calderon Robles
Interim Commission Secretary
I:\Legal\GAS V+WG2505_FCA\Orders\AVUG2505_Final_em.docx
ORDER NO. 36822 4