20150917AVU to Staff 155.docx

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:IDAHODATE PREPARED:09/15/2015CASE NO.:AVU-E-15-05/AVU-G-15-01WITNESS:Patrick EhrbarREQUESTER:IPUCRESPONDER:Patrick EhrbarTYPE:Production RequestDEPARTMENT:State & Federal RegulationREQUEST NO.:Staff-155TELEPHONE:[phone]REQUEST:
Please explain why the Company applied a uniform percentage increase to the energy charges of its other commercial schedules, but not for Schedule Nos. 11 and 12. Furthermore, page 16 of Pat Ehrbar’s testimony says, leaving the second block unchanged will provide “more meaningful separation between blocks.” Since increasing the rate of the first block while holding the charge for second block usage constant would decrease (rather than increase) separation between blocks, please explain how the Company’s proposal provides more meaningful separation between blocks.RESPONSE:Avista has a declining energy block rate design for Schedules 11/12which means that, as a customer uses more energy, their average rate per kWh should be lower than if they used less energy. However, under present Schedule 11/12base rates, as customers use more energy, their average rate per kWh actually increases as shown in the table below because the first 20 kW of demand is free, but additional kW of demand is $5.25 per kW:If the Company proposed to spread the increase to the energy blocks on a uniform percentage basis, the problem noted above would persist because of the first 20 kW of demand being free, as shown in the next table:Under the Company’s proposed rate design, where the base rate for the second block remains unchanged, the effective rate per kWh slightly decreases, which is in line with how the Company believes customer bills should be under the rate design for Schedules 11/12:By increasing the rate of the first block while holding the charge for second block usage constant, the separation between the blocks increases, providing the desired bill effect.