20160906AVU to Staff 137.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/30/2016
CASE NO.: AVU-E-16-03 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Karen Schuh
TYPE: Production Request DEPARTMENT: Energy Delivery
REQUEST NO.: Staff - 137 TELEPHONE: [phone]

REQUEST NO.:

In response to Production Request No. 47, historical transfers to plant for the Meter Minor Blanket show a five-year average (2011-2015) of 8.99% assigned to the Idaho jurisdiction. Please provide justification for the 43.92% of the 2016 pro forma amount being assigned to Idaho.

RESPONSE:

The meter minor blanket listed in Production Request No. 47 includes two expenditure requests (ER), ER 2073 – Electric Meter Replacement and ER 1002 – Electric Meter Minor Blanket. Both ERs were allocated on the basis of the net direct electric plant proportional split between the Idaho (34.907%) and Washington (65.093%) jurisdictions. This is consistent with the explanation provided in Production Request No. 47.

Additionally, because ER 1002 – Electric Meter Minor Blanket includes certain plant investment associated with the connection of new customers, this ER is further reduced, for pro forma purposes, to remove this investment related to new customers. This adjustment is performed for both Idaho and Washington, based upon the historical proportion of investment associated with new customers for each jurisdiction individually. In Idaho, 62.2% of meters in this ER are associated with new revenue, leaving 37.8% of the planned investment for the pro forma adjustment. In Washington, however, 91.5% of meters in this ER are associated with new revenue, leaving 8.5% of the planned investment for the pro forma adjustment.

The aforementioned new revenue adjustment is applied for pro forma purposes, however, the historical transfers to plant for ER 1002 were presented without the application of these percentages (given that doing so would distort the relationship between revenues and plant in service in the historical periods). If the new revenue related reductions were applied to the historical transfers, the average percentage allocated to Idaho over the five year period from 2011-2015 would be 41%, which is consistent with the observed percentage of 43.92% for the 2016 pro forma amount assigned to Idaho.

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