20180126Avista to Staff ICNU_DR_062.docx

AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:WASHINGTONDATE PREPARED:11/01/2017CASE NO.:U-170970WITNESS:Patrick EhrbarREQUESTER:ICNURESPONDER:Pat EhrbarTYPE:Data RequestDEPT:State & Federal RegulationREQUEST NO.:ICNU – 062(AVA)TELEPHONE:[phone]EMAIL:[e-mail]:
Refer to Ehrbar, Exh. PDE-1T at 4:4-8, which reads: “To the extentthatAvista demonstrates there are net cost savings, or net benefits, directly associated with the transaction that are already reflected in base retail rates, the Rate Credit for the first five years would be reduced by up to $1.7 million, and the Rate Credit for the last five years would be reduced by up to $2.7 million.” In regard to thisstatement:
Is the text intended to say, “Avista demonstrates to the Commission’s satisfaction…”?
Is the text intended to mean that the reduction in credit takes place when new rates go into effect that include suchsavings?
Is the intent of this commitment that Avista has to only make thisdemonstration one time? If yes, what assurance is there that such savings continue to exist and are sufficient inlevel?
Please explain why this showing should not be required for each occasion Avista requests a general ratechange.RESPONSE:
Yes, the demonstration would be to the Commission’s satisfaction.
Correct, when the savings are reflected in approved base rates in a future general rate case, the offsetable portion of the Rate Credit would be reduced.
The savings identified by Mr. Thies in Exh. MTT-1T, p. 15, are related to cost categories that are reduced or eliminated in part because Avista will no longer be a publically traded company. Those savings would persist through the 10-year Rate Credit period. As a safeguard, Commitment 18 includes the provision that “the level of annual net cost savings (and/or net benefits) will be tracked and reported on an annual basis, and compared against the offsetable level of savings.”
The annual reports discussed above would be included in future general rate cases.