20160224AVU to Staff 1-20.pdf

Jean Jewell
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Attachments:
Kimball, Paul < [e-mail] >
Wednesday, February 24,2OL6 L:51 PM
Jean Jewell
Karl Klein; Bonfield, Shawn
RE:Avista's Responses to IPUC Staff Production Requests AVU-E-l-6-01
Staff_PR_20.doc; Staff_PR_19.doc; Staff_PR_18.doc; Staff_PR_17.doc; Staff-PR-15.doc;
Staff_PR_L5.doc; Staff_PR_L4.doc; Staff_PR_13.doc; Staff_PR_L2.doc; Staff-PR-LL.doc;
Staff_PR_10.doc; Staff_PR_09.doc; Staff_PR_08.doc; Staff_PR_07.doc; Staff-PR-05.doc;
Staff_PR_05.doc; Staff_PR_04.doc; Staff-PR_03.doc; Staff_PR_02.doc; Staff_PR_0L.doc
February 24,2016
Idaho Public Utilities Commission
472W. Washington St.
Boise,ID 83720-5918
Attn: Karl T. Klein
Deputy Attorneys General
Production Request of the Commission Staff in Case Nos. AVU-E-16-01 and AVU-G-16-01
Attached is Avista's response in connection to Staff production requests in the above referenced
docket. Included in this email are Avista's responses to the following Production Requests:
1 through 20.
The items not included in this email are:
Staff_PR_lzc & Attachment - confidential in nature.
CD copies of Avista's responses were mailed FedEx today, OZl24l16.
If there are any questions regarding the attached information, please contact Paul Kimball at [phone] or
via e-mail at paul.kimball @ avistacorp.com
Paul Kimball
Senior Regulatory Analyst
State & Federal Regulation
Avista Corporation
1411 E. Mission Ave, Box 3727
Spokane, WA9922O-3727
[phone] direct
pa ul. kimbal [@avistacorp.com
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-0l TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Page 3 of the Company's Application states that in 2014, the Company's residential customers
made a total of 249,852 payments by credit or debit card and 21,335 one-time unauthenticated
payments. Please state whether these numbers reflect payments from customers Company-wide,
or just from the Company's Idaho residential customers.
RESPONSE:
The numbers referenced and included on page 3 of the application are Company-wide numbers.
AVISTA CORPORATION
RESPONSE TO REQTJEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-16-01 / AVU-G- 16-01
IPUC
Production Request
Staff-02
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
021t7t20r6
N/A
Shawn Bonfield
State & Federal Regulation
(s09) 495-2182
shawn.bonfield @ avistacorp.com
Through discussions with other companies offering fee-free payments, has the Company
discovered or does it anticipate that the number of electronic (paperless) bills will increase? Please
explain.
RESPONSE:
The Company does anticipate the number of electronic (paperless) bills to increase. When the fee
free payment program is offered it is likely that some customers will change the current method by
which they make payments. Some customers that are currently paying by mailed check will most
likely switch payment methods to debit or credit card and as a result may also sign up to receive
paperless bills.
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
Production Request
Staff-03
DEPARTMENT:
TELEPHONE:
EMAIL:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO DATE PREPARED:
AVU-E-16-OI / AVU-G-16-OI WITNESS:IPUC RESPONDER:
o2n7l20t6
N/A
Shawn Bonfield
State & Federal Regulation
(5O9) 49s-2782
shawn.bonfield @ avistacorp.com
How does the Company propose to allocate the processing fees
RESPONSE:
separate jurisdictions?
The Company proposes to directly assign costs to each jurisdiction, fees attributed to Idaho
customers will be charged back to Idaho.
AVISTA CORPORATION
RESPONSE TO REQT]EST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-04 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Has the Company filed for fee-free payment approval in Oregon and Washington? If so, please
provide the docket numbers for those cases.
RESPONSB:
The Company filed for approval of the fee-free payment program in Idaho, Oregon, and
Washington on January 12,2016. The docket numbers for Oregon are UM 1759 and ADV 201
and for Washington they are UE-160071 and UG-16OO72.
AVISTA CORPORATION
RESPONSE TO REQIIEST FOR TNFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WIINESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-O5 TELEPHONE: (5O9) 495-2782EMAIL: [e-mail]
REQUEST:
Assuming the Company's Application is approved, when does the Company plan to have its
billing systems updated to support the fee-free payments, and when does the Company expect to
have the program in place?
RESPONSE:
If the Company's receives approval of the fee-free payment program in all three of
jurisdictions, it expects the program to be available to customers in the third quarter of 2016.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATTON
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-06 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Please provide the annual number of calls, inquiries, complaints, and suggestions the Company
received regarding convenience fees in the last three years.
RESPONSE:
From our experience in our Customer Service Call Center, the Company knows that the
requirement to pay a convenience fee when making a payment is one of the most expressed
frustrations it hears, especially by phone. However, we have not tracked the specific number of
calls, inquires, complaints, or suggestions.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- 16-01 / AVU-G- 16-01
IPUC
Production Request
Staff-O7
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
02tr7t20r6
N/A
Shawn Bonfield
State & Federal Regulation
(509) 49s-2782
shawn.bonfi eld @ avistacorp.com
Page 10 of the Company's application states that, "The more convenient the Company can make it
for customers to pay bills, the more it can benefit all customers." Please quantify the benefits all
customers will receive from eliminating convenience fees. Please describe why the Company
proposes to recover costs for this request from all ratepayers when benefits are limited to
residential customers that pay with credit or debit cards.
RESPONSE:
As described in the Company's application, the Company anticipates potential cost savings that
will result from the fee-free payment program. Potential cost savings may include a reduction in
phone calls into the Company's Customer Service Call Center, an increase in electronic
(paperless) billing, a reduction in uncollectibles, and a reduction in collection expenses. At this
time these benefits are not quantifiable as it is not possible to directly correlate cost savings for the
items mentioned with the proposed fee-free payment program.
The Company proposes to recover costs for the fee-free payment program from all customers as
any potential cost savings or benefits that result will be realized by all customers. For example,
every phone call that is eliminated saves approximately $6 in labor costs and for every additional
customer that signs up for paperless billing the saves is approximately $7 per year. As these
savings accumulate they are realized by all customers. Lastly, all customers currently pay for the
payment methods that are available, regardless if they use them or not.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- 16-01 / AVU-G- 16-01
IPUC
Production Request
Staff-08
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
ozt17t20r6
N/A
Lisa Garrett
Customer Service
(s09) 49s-7994
lisa. garrett @ avistacorp.com
Please provide the number of commercial and industrial customers that paid with debit or credit
cards in the last three years.
RESPONSE:
The following table displays the number of non-residential accounts per year that made at least one
payment by debit or credit card.
Year #Accts
2013 866
2014 966
2015 1350
Feb-Dec 2015*1089
*The number of accounts that made a payment by debit or credit card may be duplicated for
January 2015 payments and the remainder of the 2015. Due to our Customer lnformation System
conversion on February 2,2015 all customers received new account numbers. We are unable to
identify if accounts made payments in January by debit or credit card and again later in the year
due to the change in account numbers.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO
CASE NO: AVU-E-16-01 / AVU-G-16-01
REQUESTER: IPUCTYPE: Production Request
REQUEST NO.: Staff-O9
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
02t17t20r6
N/A
Lisa Garrett
Customer Service
(s09) 495-7994
li sa. garrett @ avi stacorp. com
REQUEST:
Please provide the percentage of customers within the commercial and industrial classes that paid
with debit or credit cards in the last three years.
RESPONSE:
The following table displays the percentage of non-residential accounts per year that made at least
one payment by debit or credit card.
Year
';Vo of
:,,Accts
2013 4Vo
2014 57o
2015 l7o
Feb-Dec 2015*6Vo
*The number of accounts that made a payment by debit or credit card may be duplicated for
January 2Ol5 payments and the remainder of the 2015. Due to our Customer Information System
conversion on February 2,2015 all customers received new account numbers. We are unable to
identify if accounts made payments in January by debit or credit card and again later in the year
due to the change in account numbers.
AVISTA CORPORATION
RESPONSE TO REQITEST FOR INFORMATTON
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 W[[NESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-l0 TELEPHONE: (5O9) 495-2782EMAIL: [e-mail]
REQUEST:
Please explain whether the Company has had discussions with its current third-party vendor to
reduce or eliminate the $3.50 credit or debit convenience fee. If discussions have taken place,
please provide a summary of the discussions, and the implications of the convenience fee cost
reduction or elimination. If the discussions have not taken place, please explain why not.
RESPONSE:
The Company has had discussions with its current third-party vendor related to the Company
offering a fee-free payment program. These discussions were primarily focused on the
requirements to offer a fee-free payment program as well as the impact of the Utility Pay Program
described in the Company's response to Staff_PR_ll. In 2015 the Washington Utilities and
Transportation Commission opened Docket A-150561 for the purpose of investigating "industry
practices regarding fee-free programs for payments made by credit or debit card" and potentially
issuing a policy statement on this topic.l Avista submitted comments on May 15, 2015 and
participated in a workshop on June 9, 2015 in the investigation. As the Company developed its
comments it consulted with its current third-party vendor for information that could support its
comments.
In addition, the Company's current third-party payment processing vendor participated in the
Company's Request for Proposals (RFP) described in the Company's response to Staff_PR_t2. A
requirement of the RFP was that participating vendors provide the costs for both a convenience fee
based pricing model (similar to what the Company has in place today) and a fee-free pricing model
in which all fees are charged to the Company.
One of the reasons for offering a fee free payment program is the reduction of the cost per
transaction for debit and credit card payments, and other one-time payments where customers are
charged the convenience fee. By offering the residential fee-free payment program the Company
expects the costs per transaction to be reduced by approximately $2.00, which would be a
significant reduction from the $3.50 fee charged today.
The Company's contract with its current vendor expires in July 2016. Rather than simply signing
a contract extension with the current vendor the Company chose to evaluate its current vendor
alongside other vendors in the marketplace. As the Company's technology needs change and the
Company considers its future requirements related to its payment processing partner, the desire
I Washington Utilities and Transportation Commission,
httu//www.utc.wa. gov/docs/Pages/Docketlookup.aspx?FilingID= l -5056 1
was to ensure that the Company selected a partner that provided the most value to its customers
over the long term. With the timing of the RFP it was an ideal time to propose the fee-free
payment program as the Company would be negotiating a new contract with the partner it chooses
and then be implementing and integrating with that partner from a technology perspective. Also,
the Company is in the process of rebuilding its website and developing a mobile application (app)
for its customers to access their Avista account. Launching the new website and mobile app with
the fee-free payment program for residential customers provides for an easier implementation and
integration and smoother transition for our customers.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-ll TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Please provide a summary of discussions that have taken place with major card providers offering
a Utility Pay Program. If discussions have taken place, include a summary of processing
transaction costs by provider. If discussions have not taken place, please explain why not.
RESPONSE:
All discussions Avista has had related to the Utility Pay Program have been with payment
processing vendors. If Avista's proposed fee-free payment program is approved, its payment
processing vendor will be responsible for managing the processing of payments and any necessary
requirement needed for the Company to qualify for the Utility Pay Program. The benefit of the
Utility Pay Program is lower interchange rates for certain card types, which translates into a lower
fee per transaction that payment processing vendors charge for processing payments.
AVISTA CORPORATION
RESPONSE TO REQI]EST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- 16-01 / AVU-G- 16-01
IPUC
Production Request
Staff-12
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
o2n7t20t6
N/A
Shawn Bonfield
State & Federal Regulation
(509) 49s-2782
shawn.bonfi eld @ avistacorp.com
Please provide a detailed explanation of criteria used to select a digital payment processing
partner. If applicable, please include copies of completed RFPs and RFQs.
RESPONSE:
Please see Avista's response l2C, which contains TRADE SECRET,
CONFIDENTIAL information and exempt from public view and is
IDAPA 31.01.01, Rule 067 and233, and Section 9-340D, Idaho Code.
PROPRIETARY or
separately filed under
Please see Confidential Staff PR 12C.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION: IDAHO DATE PREPARED:
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS:
REQUESTER: IPUC RESPONDER:TYPE: Production Request DEPARTMENT:
REQUEST NO.: Staff-l3 TELEPHONE:
EMAIL:
o2n7t20r6
N/A
Shawn Bonfield
State & Federal
(509) 49s-2782
shawn.bonfield @ avistacorp.com
REQUEST:
Page 3 of the Company's application references discussions with other utilities and processing
vendors. Please provide a summary of these discussions. Additionally, describe how per
transaction costs of $ 1.50 contained in Table No. 1 of the application were determined.
Avista has had many discussions with other utilities, processing vendors, and Staff members from
the Commissions in Idaho, Oregon, and Washington related to the arrangement utilities have with
payment processing vendors and the process by which a customer makes a payment that is then
processed by a payment processing vendor with the funds later being remitted to the utility to be
applied to a customer's account. These discussions, for example, have touched on topics such as
convenience fees, payment caps or limits, processing fees, interchange rates for various card types,
payment posting, remittance processes, the transition from a fee based payment to a fee-free
payment program, and adoption rates of various payment methods.
The transaction cost of $1.50 per transaction contained in Table No. 1 of the application is an
estimate of the transaction cost the Company expects to incur for payments made within the
fee-free payment program. The cost is based on the proposal from the payment processing vendor
the Company is in contract negotiations with.
AVISTA CORPORATION
RESPONSE TO REQTIEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-l4 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
How many credit and debit card payments over $3,000 were made by residential customers for
Calendar Year 2014 and2015? What was the average charge per transaction and the total cost for
all transactions?
RESPONSE:
The Company received zero debit or credit card payments over $3,000 from residential customers
in2014 and 2015.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- 16-01 / AVU-G-16-01
IPUC
Production Request
Staff-15
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
EMAIL:
0211712016
N/A
Shawn Bonfield
State & Federal Regulation
(so9) 49s-2782
shawn.bonfi eld @ avistacorp.com
Would the current transaction limit remain the same for credit/debit payments? If not, what limit
would be established?
RESPONSE:
The current transaction limit of $3,000 over 26 periods would change. Under the proposed
program the transaction cap would be limited to $1,000 per debit or credit card payment for
residential customers.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-16 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
How would eliminating fees for payment provide additional options for residential customers to
pay their bills?
RESPONSE:
Eliminating fees for payments made by residential customers would provide additional free
payment methods that are currently not available. Although customers can pay by credit or debit
card today, most choose not to do so due to the transaction fee. Additionally, many customers that
call the Company's Customer Service Call Center and desire to make a payment by phone choose
not to when presented with the transaction fee required. Lastly, if the fee-free payment program is
approved customers will be able to sign up for automatic payment service using a debit or credit
card, which is an option not currently available.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-l7 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Does the Company anticipate that by offering a fee-free payment program, the amount of
residential customers who do not pay on time will decrease? If yes, please explain why.
RBSPONSE:
The Company does anticipate a potential decrease in the number of customers who do not pay on
time. Some residential customers who choose not to pay by credit card today due to the transaction
fee may pay by credit card in the future if the fee is eliminated. These customers may do so for the
purpose of deferring when they actually have to pay for their utility bill. This could in effect
decrease the number of residential customers who do not pay on time. Another example of why
the Company may see a decrease in the number of residential customers that do not pay on time
could be for those residential customers that wait until it's too close to their due date and mail a
check that ends up being processed after their due date. If any of these payments are switched to
debit or credit card through the fee-free program it could decrease the number of customers that do
not pay on time.
If the program is approved, the Company will be able to monitor the impacts of residential
payments received on time.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211812016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn Bonfield
TYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-l8 TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
If Idaho approves the proposed fee-free payment program and Oregon and Washington do not, can
the Company implement the program in Idaho only? If the Company cannot implement an
Idaho-only program, please explain why.
RESPONSE:
Per Avista's discussions with payment processing vendors, the Company has learned that if it
offers a fee-free payment program to any of its residential customers, it must do so for all
residential customers it serves in any of its jurisdictions. As discussed in the application, the
Company is not willing to offer the program unless all three states approve and allow costs to be
recovered through rates.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
JURISDICTION: IDAHO DATE PREPARED: 0211912016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-I9 TELEPHONE: (5O9) 495-2782EMAIL: [e-mail]
REQUEST:
Under the proposed program, will residential customers be able to set up automatic bill payment
using a credit or debit card? Please explain.
RESPONSE:
Under the proposed program, residential customers would be able to set up automatic bill
payments with a credit or debit card.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION: IDAHO DATE PREPARED: 0211712016
CASE NO: AVU-E-16-01 / AVU-G-16-01 WITNESS: N/A
REQUESTER: IPUC RESPONDER: Shawn BonfieldTYPE: Production Request DEPARTMENT: State & Federal Regulation
REQUEST NO.: Staff-20 TELEPHONE: [phone]EMAIL: [e-mail]
REQTJEST:
Under the proposed program, will residential customers still be charged for paying by phone or
online using a checking or saving account? Would there continue to be a distinction between
customers depending on whether they have a "My Avista Account"? Please explain.
RESPONSE:
Under the proposed program residential customers would not be charged an up-front transaction
fee for any payment method they choose, including payrnents made by phone and for customers
without a "My Avista Account". If the program is approved, there will no longer be a distinction
between customers on whether they have a "My Avista Account" through any payment channel.