20160823AVU to Staff 111.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/15/2016
CASE NO: AVU-E-16-03 WITNESS: Bryan Cox
REQUESTER: IPUC RESPONDER: Jeff Schlect
TYPE: Production Request DEPARTMENT: Transmission Services
REQUEST NO.: Staff - 111 TELEPHONE: [phone]

REQUEST:

Please provide the calculation method, equation(s), values used, and results of the Company’s current OATT rates, including the source and time period used to create each of the equation(s) values and the date(s) when the current rates came into effect. Please explain whether the Company plans to update the current OATT rates and whether the Company plans to propose any changes to the current calculation method.

RESPONSE:

The Company last established its generally applicable transmission service rates under its FERC Electric Tariff Volume No. 8 in FERC Docket No. ER10-169-000, filed on October 30, 2009 and accepted by FERC on December 16, 2009, with an effective date of January 1, 2010. The Company submitted test-year 2008 data in its submittal. A complete copy of the Company’s rate filing in Docket No. ER10-169-000, including all calculations, equations and values used, is provided as Staff_PR_111 Attachment A - Avista 2009 Transmission Rate Change Filing - COMPILED. Due to the voluminous nature of the attachments, they are being provided in electronic format only.

The calculation method by which the Company’s open access transmission tariff rates were established was consistent with, and dependent upon, then-current FERC policy and practices with respect to establishing such rates. The Company understands that FERC policy and practices with respect to establishing such rates remain unchanged. The only substantive alternatives available to the Company are whether to pursue rate changes when deemed timely or to pursue a formula rate approach whereby annual filings are programmatically submitted to FERC. Subsequent to the rate adjustment in January 2010, a periodic informal review of transmission data has indicated that additional transmission rate increases are not supported by the data. As an example, following the establishment of its transmission rates in the 2009 filing, the Company entered into the Parallel Operation and Construction Agreement with the Bonneville Power Administration (“Bonneville”), dated January 21, 2011, and subsequently the Parallel Operation Agreement with Bonneville dated December 12, 2012. Had the Company implemented a formula rate approach, its OATT rates may have decreased following execution of the Parallel Operation Agreement due to the need to include revenues under these agreements in its annual formula rate submittals. Accordingly, the Company’s subsequent account 456 wheeling revenues, which benefit its retail customers, would have decreased. The Company continues to analyze the appropriate timing of its FERC transmission rate submittals, considering multiple factors that could impact its OATT rates, including new or changing revenue sources, transmission demands, transmission investment and other applicable transmission costs.

The Company is considering an update to its OATT rates, but has not yet determined the appropriate timing of such a filing as it considers all the factors noted above. The Company recently submitted revised OATT ancillary service rates in FERC Docket No. ER16-2090-000, requesting an effective date of September 1, 2016. Additionally, per Mr. Cox’s testimony (p. 21), Bonneville has indicated its intent to terminate the Parallel Operation Agreement and the Company has been engaged in negotiations to possibly develop a follow-on agreement with revised terms and conditions.

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