20160909AVU to Clearwater 3C3.pdf

Shirley Lee-Warner
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Kathy Stockton
Wednesday, August 17, 2016 10:44 AM
Brandon, Annette
[External] Conversion Factor
Mike Louis and I have been working on the PCA application and we noticed that in the spreadsheets there are 2 different
conversion factors.
The first one, from Avista's 2012 general rate case, is 0.995010 and is found in the spreadsheet labeled "3) 2016
Projected Amort."
The second one, from Avista's 2015 general rate case, is 0.994222 and is found in the spreadsheet labeled "1) 10-1-16
Rate Change."
You may have already had a telephone call from Mike Louis and Yao Yin about these differences.
I believe the differences are due to timing, so correct me if I am wrong.
The 2012 case conversion factor would have been valid until the 2015 rate case changes went into effect, January 1,
2016. Therefore, for the entire PCA period from July 1, 2015 through June 30, 2016, which is why it is in the Projected
Amo rt Spreadsheet -since this calculation is at the current PCA rate and reflective of the current PCA recovery amounts,
thus is still under the old conversion factor.
The 2015 conversion factor would start taking effect after rates went into effect -again, January 1, 2016, for the next
PCA recovery period from October 1, 2016 through September 30, 2016., which would make it applicable for the first
PCA recovery period AFTER the new rates take effect, and therefore for the 10-1-16 Rate Change calculation.
This is probably a wordy way of saying what I think is happening, and I believe it to be correct, because I know that
during the PCA period, it's best to leave things as is, and only make changes with the new application for the new PCA
recovery period.
Let me know if my explanation is correct.
Thanks for your help!
Kathy Stockton
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