20191125Technical Hearing Transcript Vol II.pdf

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CSB REPORTING
Certified S horlhand Reporten
Post Office Box 9774
Boise, ldaho 83707
csbreport i n q(g)vahoo.com
Ph: 208-890-5198 Fax: l-888-623-6899
Reporter:
Constance Bucy,
CSR
BEEORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OE THE APPLICATION
OE AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE
STATE OF I DAHO
CASE NO. AVU-E-19-04
BE EORE .:i
i)
COMMISSIONER PAUL KJELLANDER (tresiding )'
COMMISSIONER KR]STINE RAPER
'u
PLACE :Commission Hearing Room
11331 West Chinden Blvd.Building 8, Suite 2 01-ABoise, Idaho
DATE:November 22, 2019
VOIUME 1]Pages 16 - 99
o ORIGINAL
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CSB REPORTING
208.890.s198
]NDEX
WITNESS EXAMINATION BY PAGE
Efizabeth Andrews(Avista)Mr. Meyer (.Direct )Prefiled Testimony
Commissioner Kjellander
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48
Joseph Miller
(Avista)
Mr. Meyer ( Direct )Prefiled Testimony
Commissi-oner Raper
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53
Donn English(Staff)Mr. Hanunond (Direct )Prefiled Testimony
Commissioner Kjellander
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68
92
EXHIB]TS
NUMBER DESCRI PTION PAGE
FOR AV]STA CORPORAT ION:
13 Stipulation and Settfement Prema r ke d
Admi t t ed 2t
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INDEX/EXHIBITS
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CSB REPORTING
208.890.5198
APPEARANCES
For the Staff:ilohn R. Eli'nond, Eaq.
Deputy Attorney Generaf
PO Box 83720
Boi-se, Idaho 83720-0074
For Avista Corporation:David l{eyer, Esq.Avista Corporation
PO Box 31 21
Spokane, Washington 99220-3121
Eor C]earwater Paper
Corporation:
Peter J. Richardson, Esq.
Richardson Adams, PLLC
PO Box 7 218
Boise, Idaho 83702
Eor CAPAI:Brady M. Purdy, Esq.Attorney at Law
2 019 North 17th StreetBoise, Idaho 83102
Eor Idaho Conservation Benjamia J. Otto, Esq.
Idaho Conservation League
71,0 North 6th StreetBoise, Idaho 83102
Eor Waf*Mart:Noman I.{. Seoanko, Esq.
PARSON BEHLE & LATIMER
800 West Main St.reetSuite 1300Boise, Idaho 83102
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AP PEARANCE S
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CSB REPORTING
208 .890. s198
COMM] SSIONER KJELLANDER :Weff, good
a hearing, aand place formorning. This is the time
technicaf hearing. on the
AVU-E-19-04, also known as
proposed
in the
settlement in Case
matter of the
application of Avista Corporation, dba
for authority to
electric service
i-ncrease its rates and
Avista Utilities,
charges for
in Idaho.
My name is Paul Kjellander. I'l-l- be the
Chairman of today's proceedings, To my right is
Commissioner Eric Anderson, and to my left is
Commissioner Kristine Raper. The three of us comprise
the Commission and ultimately, once this hearing is
concl-uded and fu1Iy submitted, we wil-1 defiberate and
render an Order.
We1I, why don't we begin with the
appearances of the parties this morning and why don't we
start with the Applicant.
MR. MEYER: Thank you. David Meyer on
behaff of Avista.
COMMISSIONER KJELLANDER: Okay, and
morning, and I believe
the room and we']l head
if we can just sort of move
to the back and we']I go to
good
around
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t6 COLLOQUY
BOISE. IDAHO, ERIDAY, NOVEMBER 22, 2019, 9:30 A. M.
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CSB RE PORT ING
208.890.5198
L1
Norm, why donrt you see what you can do to
get your microphone --
MR. SEMANKO:
Parsons Behle representi-ng
COMM]SSlONER
Mr. Purdy?
Got it. Norm Semanko with
Wal- *Mart today. Thank you.
KJELLANDER: Thank you, and
MR. PURDY: Yeah, Brad Purdy representing
I daho .Cornmunity Action Partnership Association of
COMMISSIONER KITELLANDER: Thank you.
Let's go to the back row, if we could.
MR. RICHARDSON: Peter Richardson
representing Cfearwater Paper Corporation and with me is
Dr. Reading.
COMMISSIONER K,fELLANDER: Good morning to
both of you.
MR. RICHARDSON: Good morning.
MR. OTTO! Benjamin Otto with the Idaho
Conservation League.
COMMISSIONER
l-et ' s go to you.
MR. HAMMOND:
KJELLANDER: Excellent, and
.lohn Hammond,Deput y
Staff.Attorney General, representing Commission
COMM]SS]ONER KJELLANDER: GTeat. Good
morning to everyone, Is there anyone that we missed for
purposes of recognition for the official record? 1f not,t 25
COLLOQUY
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CSB REPORT ]NG
208.890.5r98
then, are there any preliminary matters that need to come
before us today?
Mr. Purdy.
MR. PURDY: Yes, Mr. Chairman. You
probably have been advised already that my client, Will
Geh1, who previously prefiled testimony is extremely iI1.
I received an emai.l- this morning at 5:30 a.m,, so f rm not
sure what is going on there, but hopefully, her11 be well
soon. In that light, I think that maybe it would be best
if rather than attempt j-ng to put his testimony in as such
that we offer it as comments in thls case.
COMMISSIONER KJELLANDER: Mr. Purdy, I
will just a]Iow to see if there's any objections to that
and I doubt that there are any objections, so -- and
certainly since thls is a settlement stipulation thatrs
in support of that, I think that that's fine. It
shouldn't hamper any of your positions with regard to
this case, so we'11 certainfy accept those as comments,
nor wil} it hamper any abj-lity that you might have to
have been fuJ,ly engaged in the process here as we1I, so
just wanted to let you know that that's also the
scenario,
MR. PURDY: Thank vou.
COMMISSIONER KJELLANDER:
for bringing that before us. Are there
Thank you, too,
any othero25
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CSB REPORT]NG
208 .890.5198
pre.Iiminary matters that need to come before us? Yes.
MR. MEYER: Yes, just -- thank you. What
is the Chair's preference for the order of witnesses?
COMMISSIONER KJELLANDER:H.istorically, we
forward, but ifbegin
there
with the Applicant and then we move
is any kind of order that you al-l-may have agreed
hear it now and
process we would
to j-n advance, I 'm certainly wiffing to
would accept it as themore than Iikely
use to move forward.
MR. MEYER: Very good. We'11 begin with
the Company, then.
COMMISSIONER KJELLANDER: Okay, let's do
that and without objection, then, the show is yours.
to theMR. MEYER: Thank you. I call
stand Elizabeth Andrews.
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CSB REPORT]NG
208. 890.5198
ANDREWS (Di )Avista Corporat ion
ELIZABETH M. ANDREWS,
produced as a witness at the instance of Avista
Corporation, havlng been first duly sworn to te1l the
truth, was examj-ned and testifj-ed as follows:
DIRECT EXAM]NATION
BY MR. MEYER:
Q Eor the record, please state your name and
your employer,
A My name is Elizabeth Andrews and I work
for Avista Corp.
Q And what is your position at the
Company ?
A
requirements.
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testimony and
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appear in t.hat
the same?
A
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I am senior manager of revenue
And have you prepared and prefiled
an exhi-bit in this case?
Yes, I have.
If I were to ask you the questions that
prefiled testimony, would your answers be
marked as Exhiblt No.
they would.
are you sponsoring what has been
L3?
Yes,
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CSB REPORTING
208.890.5198
ANDREWS (Di )Avista Corporation
A
o
stipufation
A
Yes.
And is that a true and correct copy of the
among the parties ?
Yes, it is.
MR.
testimony be spread
move the admis sion
MEYER: With that, I ask that her
into the record as if read and would
of Exhibit No. 13.
COMMISSIONER KJELLANDER: ANd WithOUt
objection. we will admit the testlmony as if read and
spread the testimony across the record. There being
objection, that is what we shal1 do.
(Avista Corporation Exhibi-t No. 13 was
admitted into evidence . )
(The following prefiled testimony of
Ms. Elizabeth Andrews is spread upon the record. )
no
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Andrews, Di 1Avista Corporat ion
I. INTRODUCTION
O. P1ease state your name, employer and business
address.
A. My name is Elizabeth M. Andrews and I am
emp.l-oyed by Avista Corporation ("Company" or "Avista") as
Senj-or Manager of Revenue Requirements in the State and
Federal Regul-ation Department, at 1411 East Mission
Avenue, Spokane, Washington.
O. Have you previously provided direct testimony
in this Case?
A. Yes, My previous direct testimony in this
proceeding covered accounting and financial- data in
support of the Company's need for the proposed electric
increase effective January l, 2O?O. I explained pro
formed operating results including expense and rate base
adjustments made to actual operating resul-ts and rate
base for the 2020 rate period.
O. What is the scope of this testimony?
A. The purpose of this testimony is to describe
and support the efectric revenue requirement elements of
the Stipulation and Settlement ("Stipufation") filed on
October !7, 201.9, as wel-f as explain why the Stipufation
is j-n the publ-ic interest. The parties to the
Stipulation include the Staff of the Idaho Pubfic
Utilities Commission ("Staff"), Clearwater Papera25
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Andrews, Di 1aAvista Corporation
Corporation ("Clearwater"), Idaho Eorest croup, LLC
("fdaho Eorest"), the Community Action Partnership
Association of Idaho, Inc. ("CAPAI"), the fdaho
Conservation League ("ICL"), and Walmartr Inc,
("Wal-mart"). These entities are coll-ectivel-y referred to
as the "Parties" and singularly as a "Party", and
represent all who have appeared in these proceedings.
A11 Parties to this case are in support of this
Settlement.
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Andrews, Di 2Avista Corporation
Company witness Mr. Mil-l-er discusses the non-revenue
related elements of the Stipulation agreed to by the
Parties, such as e.Iectric Cost of Service, Rate Spread
and Rate Desi-gn, as well as othe.r Stipulation components
reLated to the Power Cost Adjustnent (PCA) and Fixed Cost
Adjustment Mechanism authorized level-s and customer
service-reLated initiatives and programs.
O. Are you sponsori.ng any exhibj-ts?
A. Yes. I am sponsoring Exhibit No. 13, which is
a cbpy of the Stipulatj-on and Settlement filed on October
77, 201,9, with the Commission.
O. Did the
St ipulat j-on?
A. Yes, on
revised page 9 to
October 25, 2079, Lhe Company filed a
removed an
Company submit a corrected page to the
inadvertent re fe rence
Stipulation
to "natural gas" at paragraph 11.
appendices that were
the t hat
At the same t j-me, it fj-led certain
previously agreed-upon by the Parties and referenced in
the Stipufation, but never actually filed. No party to
the Stj.pulation objected to t.he filing of this revision
or the provision of missing appendices. The e.rror was on
the part of the Company, and we apologize. Exhibit No.
13 incl-udes the revised page 9 to the Stlpufation, as
welf as the required appendices (Appendices A - C) .I 25
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Andrews, Di 2aAvista Corporation
II . SUIiIIiIARY OF ORIGINAI FILING
O. Please describe the Company's general rate case
request, as f i led.
A. On June 70, 20L9, Avista filed an Application
with the Commission for authority to increase revenue
effective January 7, 2020, for efectric service in Idaho.
The Company proposed an increase in electric base revenue
of $5.255 milfion
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Andrews, Di 3Avista Corporation
or 2.LZ for 2020. By Order No.
2 019, the Commission suspended
rates and charges for e.l-ectric
34368, dated JuIy 1-, 20L9, the
proposed schedules of rates and
service.
cost of service study (sponsored
to spread
propos ed
the general, increase,
increase generally resuJ,ted
believe it is reasonab.l,e
34368, dated JuJ-y 1,
the proposed schedules of
charges for e fect r ic
service. By
Commission suspended the
spread of the
in the rates of
Order No,
to use the cost
The Company used the results of the efectric
by
The
Ms. Knox) as a guide
return for the various e.Lectric service schedu.l-es moving
cl-oser to the overal]- rate of return (unity) . Whi]-e we
and appropriate
as the basis forof service study resu.It s
the amount of movement toward
due primariJ-y to the impact
the rate schedules.
rate spread, we
unity proposed in
such movement woul-d
t empered
thi-s case
have between
O. What are the primary factors driving the
Company's need for an e.Iectric change in rates?
A. The primary factor drj.ving the Companyrs
el-ectric revenue requirements proposed change in 2020 is
an increase in net plant investment (including return on
investment, depreciation and taxes, and offset by the tax
benefit of interest) from that currently authorized, In
addition, net power supply expense j.s reduced from thato25
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Andrews, Di 3aAvista Corporation
currentfy authorized level-, offsetting the Company's
overaf .I increase as originally requested,
El-ectrlc specific capital investments for the
20L9 period include, among other things, upgrades to
certain major generating facilities, such as the Littfe
Fal-l-s Powerhouse Redevelopment, Noxon Rapids HED
SpiLlgate Refurbishment, as well
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Andrews, Di 4Avista Corporation
as capitaf investment associated with the Clark Eork and
Spokane River License agreements, discussed by Company
witness Mr. Thackston.
Eor power
witness Mr. Kafich,
supply, as
the Ieve.l-of ldaho's share of
discussed by Company
supply expense for rate year 2O2A pro formed into
case has decreased by approximately $3.8 mill-ion
power
this
(S11
mil-l-ion on a system basis), from the level currently
included in base rates.
III. SUIIIIABY OE SETTLEMENT STTPI,'I,ATION
O. Wou1d you briefly summarize the Stipulation?
A. Yes. Under the terms of the Stipulation, as
discussed further by Mr. MilLer, Avista wouJ-d implement
revised tariff schedules designed to reduce annual
electric revenues by $7.188 milLion or 2.8* (billed basis
is also a decrease of 2.8%1, effective Decernlcer !, 201,9.
This rate changes is desiqned to provide retai.I revenues
necessary to aIlow the Company the opportunity to earn
the rate of return agreed to in the Stipulation for the
2020 raiue period.
As noted by Mr. Miller, a residential customer
using an average of 900 kilowatt hours per month would
see a $0.86, or 1.0t, decrease per month for a revised
monthly bill of $84.45. (See also Exhibit No. 13,25
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Andrews, Di 4aAvista Corporation
Paragraph L4, for the December L, 2019 efectric
percentage changes in rates by rate schedufe. )
In determining this revenue decrease, the
Parties have agreed to various adjustments to the
Company's original- filing, which are summarized in
Stipulation, and described further 1n the testimony
below.
the
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The Stipufation calls for an overall rate of
return of 7.35%, determined using a capita.I structure
consisting of 50* common stock equity and 50? debt, an
authorized return on equity of 9.5? and cost of debt of
Lastly, the Parties agreed to certain rate
spread and rate design changes as described by Mr. Mj-ILer
in his supporting testimony as wel-f as customer
service-refated initiatives and programs.
O. Pfease explain how the Parties arrived at the
Stipulation in this proceeding.
A. The Stipulatj-on is the product of settlement
discussions held in the Commission offices on October l-,
2019, It represents a compromise among differing points
of view, with concessions made by the Partles, to reach a
balancing of interests. As wil-l- be explained in the
Company's testimony, the Stipul-ation represents a fair,
just and reasonabl,e compromise of the issues and j-s in
the public interest. In addition, the Stipul-ation is the
end result of extensive audit work conducted through the
discovery processl, j-ncluding various on-site audit
visits by Commission Staff, and hard bargaining by the
Parties in this proceeding.
The Stipulation resolves a.Ll- issues among the
Parties associated with the calculation of the Company's
Andrews, Di 5Avista Corporat ion
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Andrews, Di 5a
Avista Corporation
requested
and cost
issues.
includes
cost of capital, including capital structure
components, and resolves al-l- revenue requiremeht
As discussed by Mr. Mil-l-er, the Stipulation aLso
agreement regarding certaj.n rate spread and rate
wefl as wel-.1- as other Stipul-ation componentsdesign
related
as
to the Power Cost
1 Avista responded to over 194 production and audit requests (including
sub-parts) from IPUC staff and other inLervening parties.o 25
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Andrews, Di 6Avista Corporati-on
ITI . ELECTRIC REVENUE REQUIREMENT ELE}IENTS
OF THE STIPTII.ATION
O. Please explain the derivation of the Electric
Revenue Requirement outl.ined in the Stipulation.
A. The Parties agreed that an electric revenue25
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Adjustment (PCA) and Eixed Cost Adjustment Mechanism
authorized fevels and customer service-related
inltiatives and programs.
0. Why is the Stipulation in the public interest?
A. The Stipulation is in the "public interest" for
several reasons, The Stipulation was the product of the
give-and-take of negotiation that produced an "end
result" that is just and reasonable. In addition, it is
supported by the evidence, demonstrating the need for
rate adjustments to provide recovery of necessary
expenditures and investment, the costs of which are not
offset by a growth in sales margj.ns. The Settlement
enjoys broad-based support from a variety of
constituencies, including CAPAI, Clear$rater, Idaho Eorest
Group, Wa.Imart, Inc. and the Staff of the Commi"ssion,
In addition, the Settl-ement provides a base
rate .reduction by December 1-, 2019, which woul-d benefit
a1l customers, as they plan and budget for their
2079-2020 winter heating season needs.
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Andrews, Di 6aAvista Corporation
decrease is necessary, effective December 1, 2019. While
Avistars filing requested an electric revenue requirement
increase of $5.3 million effective January 1,, 2020, the
Parties agreed-upon adjustments, including the
agreed-upon rate of return, result in recommended
el-ectric revenue decrease of $7.2 milfion. This decrease
IS designed to provide
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Andrews . Di 'l
Avista Corporation
sufficj.ent retai-l- revenues for the 2020 rate period, and
wouJ-d provide the Company with the opportunity to earn
the return agreed to in the Stipulation.
O. P.Iease explain the Parties' agreement with
regard to an Authorized Rate of Return, including the
Return on Equ j-ty.
A. The Parties have agreed to an overafl rate of
return of 7. 35?,
equity component
comparison, the
overall rate of
based on a return on equlty
at 50% and cost of debt of
of 9.5%, an
5.202. By
requested an
on equity of
of debt of
Company ' s
return of
component
original filing
return7.55%,
of 508 and cost
a
9. 9E, an
q ,n9
O.
revenue
equity
for rates effective December 1,
A. The Parties
agreed to by the Parties
20L9.
an electric revenue
20L9, Lhat reflects the
Please p-rovide an overview of the electric
requirement adjustments
effective
agreed to
December Lrequirement
adj ustments
Stipulation:
shown below in the excerpted tabfe from the
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Andrews, Di IAvista Corporation
Table No. 1: Electric enue Requirement
&)
b.)
c,)
d.)
G.)
r)
c)
h.)
i.)
i)
k.)
r.)
m.)
SUMMARY TABLE OF ADJUSTMENTS TO ELECTRIC REVENUE REOUIREMENT
EFFECTIVE DECEMBER I, 2019
(000s ofDoll8rs)
RGvcnue
Requircme[t Rst BrlG
Amoutrt 83 Filed:
Adjus tme rts :
Cost of Capital
Conparry 2019 Nct Ratc Bas€ Updates
Mbcclhneous Company Updates: Redwc Property Taxcs,
CobrilCS2 Malr Maintcmrcc Expense, Cobllb R€guhtory
Amtrtization aDd rernove norrccurring AFUDC DFIT Expense.
Rcmovc Offrcr Inccrnives 8nd Rcduce NoF.OffEers lncentives
Reduce Offaer Labor Expenses
Adjui Employee Bcnefts
Renrovc Ccrtain 20 I 9 Capilal Projccts
R€vi5c Fcc F.cc Amonizatih ard Annual Expense
Restate Uncollectbhs
Wcathci Nonnalizatbn Adjustment
Updats Net Pro Fomla Power Suppty Experce aod Transmbsix
Rcvcoucs
Udate Pro Forma Gas Prbes
trrchdc Pabusc ard Raulcsnakc Wind PPA ConEacts ir PCA
Revbe Transmhsin Rcvenucs
Remvc 2020 Expcnsc
2020 Non-Unim Labor Increasc
2020 Rcrnovc lSnT 2020 Exp.Ilse
Miscclhn€ous Adjush€ots: Rcchssifpatbn of nofl-utlity flEhts
gnd fDGd c6ts, as wcllas cxpird hasc cxpelse Essociatcd with
rlE airphne; rcclassilrcatln of oth€r a&ninbtrativc ard g€ncral
experses; adjust inrervcnor firndir& and an agr€ed upon ovcrall
expcrsc adjustnEnt to rcfbct hvcl of apprcved cxpenses
Adjusacd Amounts Eftctiyc Dcc.mbcr l,2019
s 5,255 S 836,820
(7,7 t3)
$
$
$
(22lr)
(317) $
(990) $
(t294)
(58)
$
$
$
$
$
$
$
$
$
$
$
$
$
(438)
(32)
86
(1215) $
(370)
(163)
Qn)
i.)
ii)
iii)
i.)
ii.)
( r,620)
(42J8)
(520)
(2't4t
(255)
45r
s (7,188)$ 827,750
As can be seen by a review of the individual
line descriptions provided within the summary table
above, the adjustments accepted for settl-ement purposes
cover a broad range of revenue and cost categories,
including the authorized rate of return. The individua.l-
adjustments should not be viewed in isolation;ra ther,
entirethey shoul-d be viewed in total- as part of theo25
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Stipulatlon, and are the result of hard bargaining and
comprom.r se .
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Andrews, Di 9Avista Corporation
O. wouLd you please
tine items contained within
el-aborate on the individual
Table
A
resu.It ing
Decerber 1
Cos t
Yes. A description of
in the electric revenue
No. 1?
the adj ustments
requirement, effective
2 019, f olJ-ows.
of Capj-ta1
requ l rement
reduces the overalf
52.21L mif Ii-on. The
components are shown
reduction re.l-ated to the cost of
(Iine a.) The overall- revenue
for
capital
electric byrevenue requirement
agreed-upon cost of
in the tab.le bef ow:
capital
Component
Capital
StructurE Cost
Weighted
Cost
Debt
Conrron Equity
Total
s0.00%
50.00%
5.20o/o
9.50o/o
2.60%
4.75%
100.00%7.35%
2019 Net Rate Base U dates ( Iine b. )
The 2019 filed electric capital additions were updated by
Avista to reflect adjustments for updated information,
including refated depreciation expense, accumulated
depreciation (A,zD) and accumulated deferred federaL
income taxes (ADFIT )
reflect ba.Iances as
adjustment resulted
of $1.299 million,
associated with these adjustments to
of Decenber 3L, 2019. This
in an overal-l- reduction to rate base
and a decreased revenue requirement of25
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Andrews, Di 9aAvista Corporat ion
$317, 000.
Misce.l-laneous Company Updates ( l-ine c. ) This
adjustment Reflects adjustments for updated information,
including: removal of certain 201-8 AEUDC DEIT2 expense as
non-recurring, major maintenance expense associated with
the Company's Colstrj-p generation pfant, property taxes,
and correction of DFIT within
2 Al1o.a.tce folr Funds Used Under Construction ("AEUDC"); Deferred Eederal
Income Taxes ( FDrIT" )a 25
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Andrews, Di 10Avista Corporation
the Colstrip regu.l-atory amortization adjustment3. This
adjustment decreases the overall revenue requirement by
$990,000 and reduces net rate base by $58,000.
Remove Officer Incentives and Reduce
Non-Officer Incentives (line d.) This adjustment
al-l- officer incentives. This
incentives for non-officers toadj ustment
2 018 target
adj us tment
$438,000.
versus the Company's 6-year
decreases the overall revenue
re f .Iect s the removal of
also reduces
average. Thi s
requirement by
Reduce Officer Labor Expenses (1ine e. ) This
adjustment reduces officer labor expenses to 2018 test
period .Ieve.l-s allocated 90% utility / 108 non-utility.
This adjustment decreases the overafl .revenue requirement
by $32,000.
Update Pension and Medi-cal- Expenses - (line f.)
This adjustment Reflects updated information re.l-ated to
incremental- pension and medica.I expenses in 2019, and
incl-udes 40lK expense based on 2018 test period leve1s
adjusted for 33 Iabor increases. This adjustment
increases the overall revenue requirement by $86,000.
Remove 2019 Capital Additions - (1ine 9. ) This
adjustment removes capital investments refated to: 1)
Dj-gital Grid Network project; 2) Rattlesnake P1ats
Interconnection and Transmiss i onl Substat ion projects, 3)I 25
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Distribution asset project (Metro Line) ; 4) IS/IT Mobj-1e
Application and Customer Facing Technology projects; and
5) Transmis s ion/Substat j-on upgrade project, alI
originally planned for 2019.4 The projects have been
removed for review in the Company's next general
3 The Parties otherlrise accept the Colstrip Regulatory Amortization
adjustment as filed by the Company, including approval. of the Colstlip
capital additions included in the Regulatory Asset through 2019. The
iesutting reguLatory amortization beginninq Decenbe.r 1, 2019 totals $863,000
annua-I1y.
4 Each of the identified projects were described in the dilect testimonies
of Cornpany lritnesses Ms, Rosentrater and Mr. Kensok.25
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rate ca se due to timing of completion of
decreases the overall revenue
proj ects. Thi s
requirement by
$7,713,000.
2019 of $232,000. This
revenue requirement by
adj ustment
beginning
decreases
Restale Uncolfectibles
$370, 000.6
(Iine i. ) This
uncoflectible expense based on the 12
balance as of June of 2019. This
adj ustment
$r,21s,000 and reduces net rate base by
Revise Fee Eree Amort i zat ion and Annual Expense
- (line h.) Thj.s adjustment adjusts the annual- Eee Erees
expense to approximately $311-,000 and Eee Eree deferraf
bal-ance to approximately $696,000, to refl-ect actual
amounts through ApriJ- 2019 and estimated ba.l-ances for the
remainder of the year. This adjustment also revises the
Eee Eree deferral balanceamortization expense of the
($696,000)
December 1,,
the overall
adjustment restates
month actuaf expense
adj ustment
$163,000.
to reflect a three-year amortization
decreases the overall revenue requirement by
Weather Normalization Adj ustment (line j. )
This adjustment reflects higher normalized .Ioad revenues
net of power suppl-y expense from that inc.Iuded in the
Company's original filing. This adjustment decreases the
overall revenue requirement by $287,000.
and Transmission Related Net
Expen s e s Update Net Pro Forma Power Supply Expense and
Power Su I
Andrews, Di 11Avista Corporat ion
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Andrews, Di 11aAvista Corporation
Transmission Revenues (line k. )
Update Pro Eorma Gas Prices (Iine i. )
This adjustment restates pro forma power
supply net expenses to reflect updated
natural gas
5 The Fee Free program allows customers to make pa)znents by credit or debit
card lrithout paying a service fee. This program was approved .in coltftission
Order No. 33494, case Nos. AVU-E-16-01 and AVU-G-16-01 and implemented in
february 2017,
6 The Company wj"1l update the deferral balance in its next general rate case
to reflect actual expenses defe!red through Novedler 2019 and true-up any
remaining amounts to amortize up or down fo! the remainder of the three-year
amortlzation.t 25
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forward prices for January 2020 through
December 2020 contract months based on the
most recent one-month settlement period
for the transactlons. Thj-s adlustment
decreases the overafl revenue requ.irement
by $1, 620,000.
Incfude Palouse Wind and Rattlesnake FIats
Wind PPAs in PCA (line ii. ) This
adjustment ref.Lects the removal of the
Pal-ouse Wind and Rattlesnake Wind Power
Purchase Agreements ( "PPA" ) net expenses
Thisfrom base power supply expense.
decreases the overal-fadj ustment
requ i rement
discussion
revenue
by $4,288,000.
at Exhibit No.
See further
1?Paragraphs I
for further(Palouse ) and 9 (Rattlesnake)
information.
Revise Transmission Revenues - (line iii. )
actua IThis adjustment revises 2018
transmission .revenues to reflect a three
year prior average for each month of
November and December, to norma.Iize those
months to remove the impact of the October
2018 Enbridge pipeline rupture on Company
transmission revenues. This adj ustment
Andrews, Di 1"2Avista Corporat ion
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Andrews, Di I2aAvista Corporation
decreases the
by $520,000.
transmission
reflected in
overafl revenue requirement
The resufting annual
revenues wilf also be
the PCA authorized base
effective December 1 2079.
Remove 2020 Expense (1ine I. )
2420 Labor Increase - (fine i.) This
the 2020 i-ncrementafadj ustment IEMOVES
non-executive. non-union l-abor increases.
2020 union labor increases, however were
included based on union contract
I )q
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Andrews , D.i l3Avista Corporation
increases for 2020. This adjustment
decreases the overafl revenue requirement
by $274,000.
Reduce 2020 IS/IT Expenses - (1ine ii.)
This adjustment reduces 2020 ISlIT expense
included by the Company by 50E.
Incrementa] IS/IT expense included for
2020 reflect actual- contractual-
obligations. This adjustment decreases
the overall revenue requirement by
$255,000.
Miscellaneous Adj ustments - (line m. ) This
in operating expenses
non-utility flights
lease e xpens e
amort i zat ion
adjustment reflects the net change
related to: 1) reclas s i fication of
and fixed costs, as we.I1 as expired
associated wlth the airplane ($93,000);
of 2018 intervenor funding over two-yea.r
2)
agreed
l- eve f
($20,000) ; 3) removal of misce].Ianeous
(accounts 912, 921 , and 923, total.ing
pe ri od
A&G expenses
S36,000); and 4) an
the overall revenue requirement
the impact of these
revenue requirement agreed to
upon increase to overa.l-l- expense to reffect a
of approved expenses ($600,000). The net effect of
th j-s adjustment increases
by $451,000.
O. Pl-ease s umma ri ze
adjustments on the electrico25
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Andrews, Di 13aAvista Corporat ion
by the Parties effectj.ve December L, 20L9.
A. The adjustments discussed above, and agreed to
by the Parties, reduce Avista's proposed 2020 rate year
electric revenue requirement increase of $5,255 mil-1ion
to an electric revenue requirement reduction of $7,188
mif l-ion, resulting in a 2.84t electric base rate decrease
(on a bil-l-ed basis the decrease is 2.808), effective
Decenlcer l, 2019. The net rate base agreed to by the
Parties for electric services is $827.8 miflion.
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Andrews, Di L4
Av.ista Corporation
v. coNcr.,usroN
O. In concl.usion, why is this Stipul-ation in the
public interest ?
A. This Stipulation strikes a reasonable bal-ance
between the interests of the Company and its custome.rs,
including its low-income customers. As such, it
represents a reasonable compromise among differj-ng
interests and points of view.
The terms of the Stipulation represent an
electric base rate decrease, but wiII sti11 provide
necessary retaif revenues for the rate-effective period
beginning December 7, 2019. The Parties have agreed that
the Company has
decrease for its
In the
a compromase fn
Commission has
demonst.rated the need for the revenue
el-ectric operations,
f inal- analysis,sett.l-ement re flect sany
ofthe give-and-ta ke negotiations. The
before it a Stipulation that is supported
by
of
sound analys i s
which is in the
and supporting evidence, the approval
public interest.
O. Does this conclude your direct testimony?
A. Yes, it does.
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CSB REPORTING
208.890. 5198
ANDREWS (Com)
Avista Corporation
(The foffowing proceedings were had in
open hearing. )
CoMMISSIONER KJELLANDER: Mr. Meyer.
MR. MEYER: And so she is available for
cross.
COMMISSIONER KJELLANDER: And ny guess is
there likefy wiIJ- be very l-ittle cross, but we'11 just go
through the room for kicks and giggles on that since
everybody j-s a party to the stipulation. Does anyone
have any cross? I thought not, so it's up to us if we
have any cross.
Are there any questions from members of
the Corunission?
BY COMMISSIONER KJELLAN DER:
Q I do have one and perhaps you're not the
right witness to ask, but I do want to ask a little bit
about a specifj-c issue and it is tied to the merger and I
apologize for raising that, but when the merger was --
when that particular merger, how do I want to
characterj-ze it, feII shy of its expectations, there was
an exit fee that came to the utilj-ty and I was curious as
to how or if that was represented at al-l- within this25
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CSB REPORT]NG
208.890.5198
ANDREWS (Com)
Avista Corporation
particular settlement
Idaho j urisdictional-
wanted to find out a
item.
stipulation and if there was an
share that was discussed and just
fittle bit more about that specific
A Okay. Yes; so what you're referring to is
the 103 mi.If ion termi-nation fee that was establ-ished at
the onset of the merger agreement that was meant to
compensate investors for the lost opportunity cost of a
fai.Ied merger, so j-t was supposed to represent the time
and effort devoted by parties to any merger that occurred
or did not occur, I should say.
Of that money, 52 million was rej-mbursed
to Avista for expenses, incl-uding costs and interest.
The remaining 51 million was -- during 2019, the Company
had planned to issue shares of stock for financing needs
and they were abl-e to forego that need by using those
additional 51 mj.llion, so during the settfement, there is
no specifj.c funds re.Iated to the termination fee that
were part of the settfement, although completely
independent of the termination fee, the Company did or
shareho.Iders did put forth $800,000 towards an energy
efficiency fund, but we did not tie that in any way to
the termination fee.
Q So from the Company's perspective, is
there a sense that the resol-ution of the termination fee
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CSB REPORTING
208.890.5198
COLLOQUYAvista Corporat ion
and its usaqe is compl-ete?
A Yes.
COMMISSIONER KJELLANDER: Okay, thank you.
Any other questions from members of the CorEnj-ssion?
ahv redi rect ?
MR. MEYER: No redirect. Thank you.
COMMISSIONER KJELLANDER: Thank you, and
you are excused.
THE WITNESS: Thank you.
(The witness left the stand. )
COMMISSIONER K,-TELLANDER: Mr. Meyer, if
you would like to caf l- your next witness.
MR. MEYERT Thank you. Mr. Joe M11ler,
COMMISSIONER KJELLANDER: When I heaT that
name, I think of a very different ,Joe Mi11er.
COMMISSlONER RAPER: I was thinking that,
too .
MR. MEYER: And as to that,
number of ema.ils I have sent to the
I can't tefl
you the
Milfer meant to go to this Joe Mill-er, so
just about everything Irve
COMMISSIONER KJELLANDER :
wrong Joe
he's had a
done.
And he ret ired
sneak peak at
too soon. then.
MR. MEYER: Yes.
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CSB REPORTING
208.890.5198
MlLLER (Di )Avista Corporat.ion
JOSEPH D
produced as a witness at
Corporation, having been
truth, was examined and
the
M I L]-ER,
instance of Avista
first duJ-y sworn to tel-l- the
testif ied as f o.l-.Iows:
D]RECT EXAMINATION
BY MR. MEYER:
Q So for the record, would you pl-ease state
your name and your employer?
A My name is Joseph Miller and f'm employed
by Avista Corp.
Q And what is your title?
A My title is manager of pricing and
tariffs.
Q And in that role, have you prepared and
prefiled testimony in support of the stipulation?
A Yes, f have.
Q Do you have any changes or corrections to
make to that ?
A No, I do not.
Q And are you sponsoring any exhibits?
A No, I am not.
Q So if I were to ask you the questions that
appear in your prefiled direct testimony, would youro25
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CSB REPORTING
208.890.5198
MILLER (Di )Avista Corporation
answers be the same?
A Ye s, they
MR, MEYER:
testimony be spread as if
cros s -examinat ion .
wouId.
So with that, I ask that his
read and tend.er him for
COMMISSIONER KJELLANDER: Thank you very
much.
(The fol-Lowing prefiled testimony of
Mr. Joseph Mil-Ier is spread upon the record. )
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Mi1ler, Di 1Avista Corporation
I . INTRODUCTION
O. P1ease state your name, emp.Loyer and business
address,
A. My name is Joseph D. Miller and I am empl-oyed
as the Manager of Pricing and Tariffs for Avj-sta
Utifities ("Company" or "Avista"), at 1411 East Mission
Avenue, Spokane, Washington.
O. Have you previously filed direct testimony in
this proceed j-ng?
A. Yes. My testimony in this proceeding covered
the spread of the proposed 2020 efectric revenue increase
among the Company's eLectric general service schedules.
My testimony also descrj-bed the changes to the rates
r.rithin the Company's el-ectric service schedules.
O. What j-s the scope of this testimony?
A. The purpose of my testimony is to describe and
support the non-revenue requirement portions of the
Stipulation and Settl-ement ("Stipufation"), filed on
October 1L, 20L9 between the Staff of the Idaho Public
Util-ities Commiss j-on ("Staff'), Clearwater Paper
Corporation ("Cfearwater'r), Idaho Forest Group, LLC
("Idaho Eorest"), the Cornmunity Action Partnership
Association of Idaho ("CAPAI"),the Idaho Conservation
League (ICL), Wafmart, Inc. (Walmart), and the Company.
These entities are collectivel-y referred to as thet25
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MiIIer, Di 1aAvista Corporation
"Parties. "
In my testimony f will expJ,ain the f oJ-1owJ-ng
Sett]-ement component s :
1. Rate Spread and Rate Des i gn
Settlement Items2. Other
O. Are you sponsoring any exhibits?
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Mifler, Di 2Avista Corporation
A. No, I am not. Company
sponsoring Exhibit No. 13, which
Stipulation and Settlement fifed
with the Commission.
witness Ms. Andrews is
rI . RLTE SPRE,AD & RATE DESIGN
O. Pl-ease explain the settlement terms relating to
electric cost of service.
A. In this case, the Company prepared an el-ectric
cost of service analysis that incorporated, among other
things, a system load factor peak credit method of
classifying production costs, allocating 1008 of
transmission costs to demand, and al-locating transmission
costs on a twel-ve-month coincident peak al.Iocation
factor, The Parties, however, do not agree on any
particular cost of service methodofogy. Nevertheless, in
recognition that certain rate schedul-es are wel-1 above
their relative cost of service the Parties agree that
General Service ScheduLes ll/L2 and Large General Service
Schedules 2l/22 wil,l receive a revenue decrease above the
overafl percentage base rate change, i-n order to move
these schedufes cl-oser to cost-of-service parity. The
befow the overaff
is a copy of the
on October \L, 20L9,
percentage base rate change,
move the majority of these
maj ority
decreases
of remaining schedul-es wilI receive revenue
at varying levels, that will25
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Mi1ler, Di 2aAvista Corporat ion
schedufes closer to their relative cost -of- se rvice .
O. How did the Stipulation address rate
A. For settlement purposes, the Parties
design?
agreed to
in my
resulted
the rate design changes proposed by
direct testimony. The agreed-upon
in no changes to the basic charges,
changes collected
the Company
rate design
with the revenue
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Mi1ler, Di 3Avista Corporation
through the
Stipulation
current and
volumetric enerqy rates.Appendix C of the
a sumrnary of the(Exhibit No. l3) provides
proposed rates and charges,
O, What is the effect on retaif rates. by rate
schedule, of the proposed settl-ement?
A. The following tables reflect the agreed-upon
percentage decreases by schedu!-e for electric service:
Effective December l, 2019
Rate Schcdulc
Decrease in
Base Rates
l)ecrtase in
Billing Rates
Rcsdential Scheduh I
(icrrral Scnice Schedules lli l2
Largc Ceneral Scni'c Ssh.dules 2 li22
Extra [,arge (ien:ral Senicc Schedule 25
C learualer Papcr SchcdLrlc 251)
Punrping Scrricc Schcdulcs .l li32
Street & Arr'a l-ights Scr-hdtfus ,l | -.1t1
Ovc rall
- L0'/o
- 8.4-"4
--1.,s%
-1.0%
-t_0%
-1.6%
0.0%
- 1 .0o/o
-8.2%
-t 1()/
-1.0%
-t.0%
-1.5%
0.0o/o-2.1t% L8%
A, What ar:e the residential bill impacts if the
Sett.l-ement Stipuf ation?Commi s s ion approve s
Effective
the
A Decercer I, 2019, an el-ectric
resldential customer using an average of 900 kilowatt
hours per month would see a $0.86,or 1.0t, decrease per
$84.45.month for a revised month.Iy bill ofa25
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Milfer, Di 3aAvista Corporat ion
III. OTHER E].EI,IENTS OF THE STIPUI,ATION
O. Pfease explain the settfement terms relating to
the Power Cost Adjustment (PCA) authorized levef of
1 The Parties agreed to incorporate the current Schedule ?2 (Permanent
Fedei.al Tax Rate Credit) as part of base rates and to cancel Schedu-Ie f2
altogether.25
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Miller, Di A
Av j-sta Corporation
A. The new fevef of power supply revenues,
expenses, retail Ioad and Load Change Adjustment Rate
resufting from the December 1, 2019, settlement revenue
requirement, for purposes
cafcufations, are detail-ed
of monthly PCA mechanism
in Appendix A of the
Stlpulation (Exhibit No.
O. Please explain
the authorized base for
13).
the settlement terms relating to
the Electric Fixed Cost
Adjustment Mechanism.
A. The new level of baseline values for the
electric fixed cost adjustment mechanism resulting from
the December 1, 2079, settlement revenue requirement are
detail,ed in Appendix B of the Stipulation (Exhibj-t No.
13).
O. Please explain the other issues agreed upon in
the Settlement Stipulation.
A. The Parties agreed to increase funding for the
Low Income Weatherization Program from the current
Commi s sion-approved levels of $800,000 to $850,000.
Second, the Parties agreed that Avista w111
establish an Energy Efficiency Assistance Fund ("EEAF").
The purpose of the EEAE j-s to provide additionaL funding
for projects that are not otherwise fuJ-1y funded through
existing energy efficiency j-ncentives, or do not
otherwise quafify for traditiona] energy efficiencyI25
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funding.
o.
EEAE?
I
Did the Parties agree as to how to fund the
settlement
Yes. As part
negotiations
and disbursed
of the give and take of
the Parties agreed the EEAP will-
as fof Iows :be funded
.I The final deferral bal,ance re-Iated to the
"AEUDC Equity Tax Deferral", addressed in
Case Nos. AVU-E-19-02 and AVU-G-19-
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Miller, Di 5Avista Corporation
t-1.
11i
iv.
v.
01, as ordered in Commission Order No.
34326 wj-I1 be a source of funding. The
estinLated deferral balance is
approximately $800, 000.Avista wi- l- l- contribute be]-ow- the- l- inedol-lars of $800,000 in 201-9 as a match tothe estimated AEUDC Equity Tax Deferra.l-(in subsection i. ) .
The funding wiff be disbursed as directed
by the Energy Efficiency Assistance Eund
Advisory Group, a new committee of
stakeho.Iders tasked with determinlng whichexisting o.r new programs shou.Id receivethis funding to address energy efficiency,weatherization, conservation, and
low-income needs in Avista's Idaho serviceterritory.
The EEAE Advisory Group wilI consider the
needs of all partj-es and remain f.Iexibfe
on the ti-ming of any dlsbursements. Anyentity seeking funding must first attemptto qualify their applicable project under
Avista ' s exj-sting energy efficiency
programs .
The conunittee wil-l- initially consist ofrepresentatives from the following
stakeholders: Avista, Staff, the Lewiston
Community Action Partnership, ICL, Idaho
Eorest, and Clearwater. The Committee may
add representatives at its discretion,
O. Did the Stipulation address certain DSM
pro j ects specif ical-1y rel-ated to C.l-earwater?
A. Yes. Avista agrees to work with Cl-earwater to
attempt to qualify the fol-l-owing projects for DSM funding
under Tar.if f Schedule 90:
Variable speed drives on the No. 1 paper
machine hydropulper.Variabfe speed drives on the No. 4 powerboiler deminerafized water pumps .
Energy efficient chil-l-ers and compressorsfor the Lurgi system.
A variable speed drive on the No.1 papero25
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Milfer, Di 5aAvista Corporation
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machine white water system.' Variable speed drives on the two waste
water outfall pumps .
O. Did the Stipulation address certain DSM
projects specifically related to the Idaho Forest croup?
A. Yes. Avista agrees to work with the Idaho
Eorest Group to attempt to qualify the foLlowing projects
for DSM funding under Tariff Schedufe 90:
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Mil-l-er, Di 6Avista Corporation
Installation of information technology to
gather pJ-ant information data (PI Data) on
energy usage at Idaho Eorest's Lewistonplant, and through an instal-l-ed interface,transmit real- time energy J-oad j-nformation
data for each ope.rating station to the
Idaho Eorest Group and Avista. This may
serve as a usefu.I demonstration project
for data interfaces with other customers
on Avj-sta's system. The total estimatedcost j-s $300,000.
Replacement of aging compressors, saws andother equipment with state of the art
machinery at fdaho Eorest's Lewiston andGrangeville plants, in order to increaseproductivity and energy efflciency.
Is DSM funding addressed in Tariff Schedule 90?o
A Yes. Tari.f f Schedule 90 aLl-ows for poss j.bIe
DSM funding of up to 708 of the cost of the project,
subject to meeting certain specifj-ed cost -e f fectivenes s
crj.teria. The portion of the estimated cost of these
identified projects for both Cl-earwater and the Idaho
Eorest Group that
wiII be considered
consider the needs
is not reimbursed under Schedul-e 90
for funding through
of af l- parties and
disbursements.
the EEAE, who will-
remain f l-exible on
the timing
o.
A.
of any
Does this concl-ude your dj-rect testimony?
Ye s, it does .
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CSB REPORTING
208.890.5198
MILLER (Com)
Avista Corporation
(The following proceedings were had in
open hearing. )
as sume
COMMISSIONER K,JELLANDER: And I'm going to
the same as fast time and so at this point are
any questions from members of the Comnission?
Commissj-oner Raper.
there
EXAMINAT ION
BY COMMISSIONER RAPER:
Q On page 2, you reference cost of service
methodology and allocation. but
the record as to when the last
I didn't see anything in
cost of
completed by Avista. I don't know if
but when was the last cost of service
service study was
I mj-ssed it or not,
completed?
accepted cost of
service study in
you
did
Ms.
A Are
service study? We
this proceed j-ng.
study.
referencing an
fil-e a cost of
Knox supported a cost of service
Q In the original filinq?
A In the original f1l1ng, yes.
Q And when was that study completed?
A It was completed -- it was part of the
original fili,ng and it was based on the test year
supported in this case.25
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CSB REPORTING
208.890.5198
MILLER (Com)
Avista Corporation
accompanaes a
cost of service study that was
no, it was updated for this case. It
was based on the test year, the 2018 test year.
COMMISSIONER RAPER: Oh, terrific. Okay,
thank you. That's all I have.
COMMISSIONER K,f ELLANDER 3 Are there any
further questions from members of the Commission? Thank
you .
Any
MR.
redi rect ?
MEYER:None, thank you.
K.JELLANDER: ThanK
we appreciate your testimony today, Mr. MilIer.
you, and
Than k
you.
THE WITNESS: Okay, thank you.
(The witness left the stand. )
MR. MEYER: And with that bit of the
Q so
guess my question
service study that
could have been a
completed in 2005.
A Oh,
COMMI SS IONER
testimony, which I might add
opportunity to testify, the
the settlement is complete.
COMM]SSIONER
in the future, whenever you
it was a 20L9 cost of service study? I
is a lot of tlmes therers a cost of
rate case fiJ-j-ng, but it
is Mr. Miller's first
Company's case in support of
KJELLANDER: And if you could
have a rook.ie heading up to25
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CSB REPORT]NG
208.890.5198
ENGLISH (Di )Staff
the witness stand, could Iet us
be very -- well, you
If we
the Pubfic Utilities
representing sta ff,
forth your witness.
you
got easy.
could move now,
Commi-ssion and
know so that we can
Thank you.
then, to Staff for
the Attorney General
it is now your opportunity to put
MR. HAMMOND: Thank you, Chairman. The
Commission Staff would call Donn EngIj-sh.
DONN ENGL] SH,
produced as a witness
having been first duly
examined and test i fi ed
at the instance of
sworn to tel l- the
the Staff,
truth, was
as foffows:
D]RECT EXAMINATION
BY MR. HAMMOND:
Q Sir, could you tell me your name and spell
your last name for the record?
A My name is Donn English. Last name is
E-n-g-1-i-s-h.
Q Can you te11 me where your re empLoyed and
in what capacity?
A I'm employed by the Idaho Public Util-ities
Commission as a program manager in charge of thea25
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CSB REPORT]NG
208.890.5198
ENGL]SH (Di )Staff
accounting and audit department.
Q In thls case, this rate case, did you have
an opportunity to file testimony in support of the
settlement agreement that was reached by the parties?
A
o
with you here
A
o
Yes, I
And do
on the
Yes, I
did.
you have a copy of that testimony
stand today?
do.
have any changes or corrections you
that testlmony?
do not.
Do
would like to make
you
to
IA No,
Q If I asked you the questions, the same
questions. that a.re in this prefiled testimony today,
would your answers be the same?
A Yes, they woul-d,
MR. HAMMOND: With that, I would offer
Mr. English's testimony and ask that it be spread upon
the record as if read and would offer him up for cross.
COMMISSIONER K,JELLANDER: Thank you very
much.
(The following prefiled testimony of
Mr. Donn English is spread upon the record. )
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CASE NO. AVU-E_ 19-O 4
t0 /31./L9
O. Please state your name and business address for
the record.
A. My name is Donn English. My business address
i-s 11331 W. Chinden Blvd., BLDG 8, STE 201-A, Boise,
Idaho 83714.
O. By whom are you employed and in what capacity?
A. 1 am employed by the Idaho Public Utlflties
Commission as a Program Manager overseej-ng the Account j-ng
and Audit Department in the Utifities Division.
O. What is your educational background and
professional experience?
A. I graduated from
with a Bachel-or of Business
Boise State University in 1998
Administration ("BBA" ) degree
in Accounting.
position as a
Eollowing my graduation, I accepted a
Trust Accountant with a pension
administration, actuar.ial,and consu.l-ting f irm In Boise.
Pension Administrator, fn MayIr, L999, I
of 200L, t
Society of
I was the
was promoted to
became a designated member of the American
Penslon Professiona-ls and Actuari-es ("ASPPA").
first person in Idaho to rece.ive the Qualified
401(k) Administrator certiflcation and was al-so one of
approximately ten
Qualified Pens ion
people in Idaho who have earned the
Administrator certification. In 2 001,
I was promoted to a Pension Consultant.
I was hired by the Idaho Publ-ic Utj-lj-tieso25
6B ENGL]SH, D (Stip) 1
STAEF'
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CASE NO. AVU-E-19-04
L0/37/79
(Stip) 2
STAEE
inc I udi ng
prov i ded
Commission as a Staff Auditor in 2003. In 2016, I became
the Audit Team Lead, and in 2018 I was promoted to
Program Manager of Accounting and Audit Department. At
the Commission, I have audited a number of util-ities
comnents and testj-mony in numerous
companies, and
cases that
dealt with genera.l- rates, tax issues, pension issues,
depreciat.ion and other accounting issues, and other
regulatory policy decisions. In 2004, I attended the
46th Annual Regulatory Studies Program at the Institute
of PubIic Utilities at Michigan State University
sponsored by the National Association of Regulatory
Utility Comm.issioners ("NARUC"). Since then I have
regularly attended NARUC conferences and meetings,
Society of Regulatory Financial Analysts ("SUREA")
meetings, and other. regulatory training opportunities. I
am the Commission's representative on the NARUC
Subcorunj-ttee of Accounting and Finance.
0. What is the purpose of your testimony in this
proceeding ?
A. The purpose of my testimony is to describe
Avista Corporation's ("Avista" or "Company") Application
to increase its rates and charges for electric service in
Idaho, describe the proposed comprehensive settlement
reached
support
by all parties in this case, and expl-ain Staff'sfor the proposed agreement.
electric, water, and naturaf gas
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CASE NO. AVU_E_19_04
1.O / 31/ 7e
o
A
How is your testimony organized?
My testimony is subdivided under the following
Ba c kground
Settlement Overview
Staff Investigation
Settlement Evaluation
Revenue Requirement
Al-l-ocations and Rate Design
Energy Efficiency
Other Terms and Conditions
Page 3
Page 5
Page 6
Page I
Page 10
Page 15
Page 17
Page 18
Background
O. Please describe Avista's original filing.
A. Avista made its original filing on June 10,
2019, requesting authority to increase its electric base
rates in Idaho by $5.255 miLl-ion or 2.7%, effective
January L, 2020. The requested increase was based on a
2018 test year, with proforma adjustments through 2020.
Rate base was presented on a 2019 proforma end of period
basis. The Company proposed a capital- structure of 50/50
and a return on common equity ) of 9.98.
Based on the different cost-of-service
methodologies filed, the Company proposed no increase for
General- Service Schedul-es LL/12 and Street and Area Lj-ght
Schedufes 4L-49, resulting in a 30? movement towardsI
10 ENGLISH, D (stip) 3
STAF E
headings:
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CASE NO. AVU_E_ 19_ O4
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(Stip ) 3a
STAEE
unity.
Ext ra
25P) ,
Large Generaf Service customers (Schedules 2L/22\,
(Schedules 25 andLarge Generaf Service customers
and
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CASE NO. AVU-E-19-04
70 /31/t9
ENGLISH, D (Stip) 4
STAEE
Pumping customers (Schedufes 31/32) wou.Id receive 75* of
the overafl base
requirement was
Service Schedufe
revenue increase. The remaining revenue
proposed to be spread to Residentiaf
unity. Tabfe No.
1, resulting in a 34? movement towards
1 bel-ow il-lustrates the proposed
revenue spread and refative rates of return ("ROR") for
the customers classes,
TaJrle No. 1 Proposed Rate Spread atrd Relative ROR
Increase in
Base Rates
ProposedRelative RORRate Schedu].e
Residential Schedule I
Gen. Service Schedules 11l 12Lg. Gen. Service Sched:ules 2l/22Extra Lg. Gen. Service Sch. 25
Clear$rater Papwer Sch. 25P
Pumping Service Schedules 31/ 32Street & Area Lights Sch. 4l-49overall
3.42
0-0?
1.5?
1. 5?
0.0%
0.88
1.36
1.06
0. 90
0.95
0. 96
t-.382.r*1.00
O, How was the case processed after the Companyrs
filing was received?
A. The Commission issued a notice of filing and
established an .intervention deadline. fntervenor status
was granted to Cfearwater Paper Corporation
("Clearwater"), ldaho Forest Group, LLC, the Community
Action Partnership Association of Idaho, Inc. ("CAPAI"),
the Idaho Conservation League, Inc. ("ICL"), and Walmart,
Inc. A procedural schedul-e was approved by the
Commi-ssion and a settl-ement conference was hefd on25
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October 1,2019. A comprehensive Settlement was reached
by all parties, and
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CASE NO. AVU-E_ 19- O 4
10/3L/19
(Stip
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13 ENGLISH, D ) 4a
S TAEE
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2
4
6
7
I
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the Motion to Approve the Stipulation and Settlement was
filed with the Commission on October 75, 2019-
settle0eat Overvisr
0. Would you please describe the terms of the
Settlement ?
A. The proposed Stipulation and Settlement
("Settlement") specifies a decrease in el-ectric base
revenues of $7.188 miLlion (2-842) on December -1,, 2079.
It afso specifies a 50/50 debt to equj-ty capitaf
structure, a 5.29 cost of debt, and a 9.5t return on
common equj-ty. The overall return is 7.35t.
Besides specifying capital structure, return on
equity, and the cost of debt, the Settlement also
specifies a variety of expense and investment
adjustments, The revenue requirement adjustments falf
primarily into three categories: 1) update 201"9 pro forma
expense and j-nvestment with known, actual amounts; 2)
modify or update miscel.Ianeous test year expenses; and 3)
fenqthen amortization periods for deferred accounts. The
revenue requirement is further adjusted by continuing the
Palouse Wind Purchase Power Agreement ("eee", expense
recovery through the Power Cost Adjustment ("PCA")
mechanism rather than through base rates.
The revenue decrease will be spread to the
customer classes in varying amounts to move towards
CASE NO. AVU-E-].9-04
t0 /3t/19
(stiP) 5
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CASE NO. AVU_E_ I9-04
t0 / 3L/\9
cost-of -service Parity.
and re.Iative ROR for each
below:
The decrease by customer class
class is shown in Tabfe No. 2
Table No. 2 Stipu]-ated Rate Spread and Relative ROR
Increase in
Bas€ RatesRate Schedule
Residential Schedufe 1
Gen. Service Schedules 11l 12
Lg. cen. Service Schedules 21l22
Extra Lg. Gen. Service Sch. 25
Clearwater Papwer Sch. 25P
Pumping Service Schedufes 31/ 32
Street & Area Lights Sch. 41-49
Overall
-1.0%
-8.4%
-1.0?
-1.0?
-1.6?
0. 0?
-2.4*
0.861 'tr
1. 05n o?
0. 99
1.00
t.61
1. OO
The Settlement al-so provides additional funding
for energy efficiency projects in Idaho, and increases
the annuaL funding for the Company's Low Income
Weatherization Program from the currenly approved
$800,000 to $850,000 per year,
O. Are there any other provisions included in the
Sett lement ?
A. Yes. The Settlement also specifies the new
Ieve1 of base power supply revenues, expenses, retail
1oad, and the Load Change Adjustment Rate resul-ting from
the stipulated revenue requirement for purposes of the
monthly PCA mechanism calculations. It a.Iso specifies
the new level- of baseline va.Iues for the efectric fixed
costs adjustment ("ECA") mechanism.o
75 ENGLISH, D (StiP) 6
STAFF
Stipulated
Re].ative ROR
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Staff Investigatioa
O. What type of investigation did Staff conduct to
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CASE NO. AVU-E-19 - O 4
to /3L/79
(Stip )6a
STAEE
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O evaluate the Company's rate increase request?
A. Staff's approach prior to the settfement
conference was to extensively review the Company's
Application and assocj-ated testimony and workpapers,
identify adjustments to its revenue requirement request,
and prepare to file testimony for a fully-litigated
proceeding. Three Staff audj-tors were assigned to the
case and began reviewing the 20L8 resul-ts of operatj-ons
before the Company filed its Applicaton in June of 2019.
After the filing, the auditors reviewed the capital
budgets, capital spending trends, operations and
maintenance ("O&M") expenses and trends, and verified al-f
of the Company's cal-cul-ations and assumptions with
regards to the overal-l- revenue requirement. The auditors
spent two weeks on-site at Avista's corporate
headquarters in Spokane, Washington, j-nterviewing Company
personnel, reviewing thousands of transactions, selected
samples and performed transaction testing in accordance
with standard audi-t practices. The auditors reviewed the
Company's labor expense, incentive plans, and employee
benefits to insure the appropriate fevef of expenditure.
lhe auditors worked with ten other technical
staff from the Utilities Division, consistj-ng of
engineers, utility analysts, and consumer investigators,
to determj-ne the prudence of capitaf additions and verj-fyin-service
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CASE NO. AVU_E_ 19_ O4
10/31/19
25
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CASE NO. AVU-E. ].9.0 4r0/3t/L9 ENGLISHI D
dates. Staff reviewed both completed and proposed
Company investments, evafuated expendj,tures incJ-udi-ng
pension, salaries, and operation and maintenance
expenses, investigated power supply modeling, weather
normalization, class cost-of-service methodologies, and
compared rate deslgn alternatives. In totaL, Staff
submitted over 150 production requests to the Company as
part of its comprehensive investigation. In addition to
audit work on-site, other Staff al-so conducted on-site
investigations.
O. How did Staff prepare for the settl-ement
conference?
. A. Staff prepared for the settlement conference by
preparj.ng for testimony as in a litigated case. fn
developing its revenue requirement proposal-, Staff
identified 28 adjustments to the Company's requested
revenue requirement totaling $14.35 nillion. Staff
developed its revenue reguirement proposal and
established positions on various issues for presentation
at the settlement conference on Octobe.r 1, 2019, while
simu.Itaneously preparing direct testimony to file on
November 5, 2019, should the case be litigated.
Satt].@eat Evaluatioa
O. How did Staff determine that the overall-
o 25
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STAFE
1
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3
4
5
6
7
I
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Settlement was reasonable?
A. In every settlement eval-uation, Staff and other
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CASE NO. AVU -E- 19- O 4
10/31/19
part ie s
overaf 1
of the 2B
Staff were
revenue requirement
incorporated either
must determine if the
outcome chan could be
agreement is
expected at
adj ustments
totafly or
a better
hearing. A11
identified by
partial-ly in
$5.255 miflionthe Sett.Iement. Rather than an increase of
as proposed by the company,
electric revenue decrease of
the Settlement specified an
S7.188 mi11ion. Other
0. Does Staff support the proposed Settlement as
reasonable?
parties, made up
.repre sentat ive s ,
Settlement.
A.
Company' s
books and
parties to
Settfement.
between the
affordable
Company's opportunity
rates for customers.
to earn a return and
Several of Staff's
revenue requirement
of customer groups and 1ow income
agreed with Staff in support of the
Yes. After a comprehensj-ve review of the
Application, thorough audit of the Companyrs
records, and extensive negotiations with the
the case, Staff supports the proposed
The Settfement offers a reasonable balance
primary goals after
have been met with
eval-uation of
this Settlement. ft provides
additional- funding for energy efficiency projects and the
Companyrs fow income weatherization program. Not alI
cost-of-service affocation concerns or different methods
addressed by other parties are incl-uded in thiso25
19 ENGLISH, D (stip) 9
STAFF
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Settfement. However, it does
cost-of-service di f ferent ia 1s
properly address
raised by the var.ious
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CASE NO. AVU-E-I9-04
t0/31/7e
(stip )9a
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CASE NO. AVU-E- 19-O 4
10 / 31/ te
81 ENGL]SH, D (stip ) 10
STAFE
parties, including Staff, by distributing the rate
decrease base on cost causation princj-ples to bring
customer cfasses c]-oser to parity. Staff believes that
the Settlement, supported by al-l- parties to the case, is
in the public interest, is fair, just and reasonabl-e, and
shoul-d be approved by the Commj-ssion.
Roveau€ Bsguir@€nt
O. What type of revenue requirement adjustments
were proposed by Staff and included in the Settlement?
A. The adjustments proposed by Staff covered a
broad range of revenue and cost categories. Besides a
reduction in ROE, the adjustments generally fa11 into the
three prevj.ously identified categories: 1) update 2019
pro forma expense and investment with known, actual-
amounts; 2) modify or update mj-scellaneous test year
expensesi and 3) fengthen amortization periods for
deferred accounts.
O. Please explain why Staff believes the 9.58 ROE
is reasonabl-e.
A. The Stipulation reflects an ROE of 9.5* based
on a capital structure of 50t equity and 508 debt. The
Company orlginally proposed a 9.9? ROE. The 9.5E ROE is
consistent with the Company's currently authorized ROE,
and also with the most recent Commission decision forofnte.rmountain Gas Company in Order No. 33757. It is alsocons.istent with authorized returns granted for other
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CASE NO. AVU-E-19_04
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STAFF
electric and gas utilities operating in the Northwest.
The 40 basis point reduction in ROE from the Company's
proposaf reduced the Company's requested revenue
requirement by approximaLely $2.2 million. The 9.5t ROE
a11ows Avista to attract new capital from the market to
fund new capital investments and refinance maturing debt
i-ssuances.
O. Will you please explain other revenue
requirement adj ustments
the parties ?
proposed by Staff and accepted by
A. Yes. Whil-e Table No. 1 of the Settlement
provides a l-ine by line cal-culation of the revenue
requirement, and the Settlement further provides a
sununary of each adjustment, I will highlight a few of the
major adjustments. The fj-rst adjustments proposed by
Staff refated to the timing of expenses and investments.
The Company proposed a test year based on a 2018 base
year with proforma expenses through 2020, and capital
investments through 2019. Staff verified the proforma
expense amounts with actual expenses as they became
available.
]N-SCIV1CE
Additionalfy, Staff investigated the
dates of proposed capital projects to confirm
be in-service and used and usefuJ- pr.ior to thethe y
end
would
of
in 2019
20L9, By
from the
removl ng
Company' s
capital proj ects
request, Idaho
not completed
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rate base was reduced by $9,070,000 which reduced the
fdaho e.Iectric revenue requirement by approximately $1".5
milIion.
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CASE NO, AVU-E_19.04
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CASE NO. AVU-E-19-04
70 /3r/79
(stip )t2
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Updating 2019 expenses with actual amounts reduced the
Idaho electric revenue requirement by another $1.15
mi1lion.
O. Woufd
treats emp.l-oyee
A. Yes.
Idaho efectric
expenses through
increased l-abor
requirement proforma J-abor
for non-executive employees, and
you please exp.l-ain how the Settlement
labor and benefits ?
The Company proposed to include in its
revenue
2020
expense through 2Ol9 for its executives.
The parties agreed to only incl-ude the scheduled 2O2O
wage increases for the Company's union employees because
that wage increase is a contractual obligation under the
Company's colfective bargaining agreements. A1l other
2020 wage increases were removed. Additj-onaIfy, the 2019
wage increase for the Company's executives was afso
removed from the revenue requirement. The effect of the
agreed upon l-abor adjustments reduced the Company's
requested revenue requirement by $306,000.
The Company also incl-uded 1n its request
incentive palments for its employees and executj-ves.
Consistent with prior Corunission treatment, Staff
proposed and the parties agreed to remove executive
incentives in their entirety from the Company's revenue
requirement. Eor non-executive incentive payments, the
the operating portion ofto
at
onlyparties agreed
the incentives
inc.Iude
the
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CASE NO. AVU_E_ 19_ O 4
10 /3L/L9
(StiP ) 13
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2018 target ]eve], as opposed to the 6-year average
proposed by the Company. The effect of the agreed upon
level- of incentives reduced the Company's requested
revenue requirement by $438,000.
The Company also proformed employee benefits
through 2020 in its original request. Staff proposed and
the parties agreed to remove the 2020 matching
contributions to the Company's 401(k) and use the 2018
test year feve.I of matching contributions pJ-us a 3% fabor
escal-ator for 2079. The Company's pension contributions
were estimated to decrease in 2020. To remain consistent
with Staff's po1lcy on excluding
the parties agreed to accept the
contribution. The overall- effect
2A20 Labor and benefits,
the Company's employee benefits increased
201-9 pension
adjustments to
the Company's
customer, 10t
executed in 2 011, and
every prevaous
since its
higher
of the
requested
o.
Wind and
A
PPAS have
associated
subj ect to
Company ) .
has never
PIease explain the treatment of the Palouse
revenue requirement by $86,000.
Rattlesnake FIats Wind PPAs.
the current sharing (908
The Pa.l-ouse tdind PPA was
Both the Pafouse !{ind and Rattl-esnake Elats
been removed from base rates and the costs
with the PPAs wil-], be reflected in the PCA
been incfuded in base rates. In
se t t.l ement
execution,
agreement in Avista's rate casesthe expensesa25
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CASE NO. AVU-E-19-O 4
LO/37/79
86 ENGLISH, D (stip \ 14
STAEE
associated with the PPA have been incfuded in the PCA and
subject to sharing.
The Rattlesnake Elats Wind PPA
deliver power begj-nning in December 2020.
is expected to
The capital
be integrated
to sharing.
base rates
investments necessary for this project
have been excluded from the Company's revenue requi rement
and wj-Il be addressed in the Company's next general rate
case. Eor purposes of thj,s case, the parties agree that
any
PPA
The
associated with the Ratt.Iesnake Elats Wind
reduces the Company's requested revenue requirement by
approximately $4.3 mj-l-f ion.
0. WilJ- you please explain the misce]laneous
adjustment l-isted in the Settfement?
to
expenses
wilf be included in the PCA and subject
effect of excluding these two PPAs from
A. The miscellaneuous adjustment reflects the net
for items Staff discoveredexpenseschange in operating
during its audit.
reclassification of
associated with the
Those items conslst of 1) the
non-utility flights and fixed costs
Company's private jet, as weff as the
expired J,ease expense; 2) the amortization of the 2018
intervenor funding over a two-year period; 3) removal- of
other misceflaneous administrative and general ("A&G")
expenses that should have been charged below-the-fine;
and 4) and agreed upon expense adjustment that increasesa
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revenue .requirement by $600,000. The net effect of the
miscel-l-aneous adjustments increases the Company's
requested revenue requirement by $451,000.
A].locations arld Rate Desigrn
O. Please explain the cost -o f-servi. ce
methodologies incl-uded in the Company's Application.
A. The Company's original Application in this case
included a Base Case e.lectric cost-of-service study where
production costs are classifj"ed to energy and demand
based on a the system l-oad factor. Transmission costs
are classified 100? demand and affocated by the average
of the 12 monthly coincident peaks. This methodoloqy is
consistent with the cost-of-service studies filed in the
l-ast four Idaho general rate cases (Case Nos.
AVU-E-12-08, AVU-E-15-05, AVU-E-16-03, and AVU-E-17-01)
and ref.Iects the methodology that was accepted in the
Stipulation and Settlement in Case No. AVU-E-10-01.
The Company also provided three a.l-ternative
cost-of-service scenarios. The first alternative
scenario starts with t.he Base Case but incorporates the
classification of Distribution Land and Land Rights (EERC
Pfant Account 360) as refated to other distribution plant
in EERC Pl-ant Accounts 361 though 367. The second
afternative scenario modified the coincident peak
allocation factor which is used on aL1 demand-related
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(StiP \ 15
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CASE NO. AVU-E-19-04L0/3t/t9
(Stip ) 16
STAEE
production and transmission costs to reflect the average
test
modi- f ied the
of the seven highest monthly peaks during the
third aLternative scenario alsoperiod. The
coincident peak alJ-ocation factor by using aIf twefve
monthly peaks, but the demand val-ues were weighted by the
marginal cost-of-power in each month.
0. Were there any simi.Iarities in the di-fferent
cost-of-service scenarios presented
A. Yes. Each cost-of-service
by the Company?
by the Company illustrated an
scenarl0
unde r- re cove ry
(Schedufe 1)
presented
of assigned
and the Extracosts by the Residential- cl,ass
Large General, Service classes (Schedule 25 and 25P) .
General Service Schedules 1l- and 12, along with Larger
General Service Schedules 2l and 22, were sho$rn to be
over-recovering their assigned costs.
O. Do the parties agree on any specific
cost-of-service methodology for this case?
A. No, The parties do not agree on any particul-ar
cost-of-service methodology for this case. However, the
parties generaffy agree with the representations
presented in the multiple scenarios provided by the
Company that certain customer cfasses do not recover all
of their costs, while other classes recover more than
their assigned costs. In recognition that certain rate
schedu.l-es are wel-I above their relative cost-o f-service,
the Parties agree thato
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CASE NO. AVU-E- 19- O 4
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(stip )t]
STAEF
General Service Schedules 11 and 72, and Large Generaf
Service Schedufes 21 and 22 will receive a .revenue
decrease above the overall base rate change i-n order to
move these schedules closer to cost-of-service parity.
The remaining schedules wilf stj-11 receive a revenue
decrease, but the decrease will be below the overa]]
percentage base rate change. The rate decreases by
Customer Schedufe are shown on page 1"0 of the Settlement.
Energy Efficiencl'
O. P.Iease explain the Settl-ement as it relates to
energy efficlency.
A. Ej.rst, the Settfement increases Lhe annual
amount funded by the Company for its Low Income
vieatherization Assistance Program admininstered by the
Lewiston Cornrnunity Action Partnership. The current.Iy
authorized .Ievel of funding is $800,000. The Settl-ement
increases the leveJ- of funding to $850,000,
The Settlement also stipulates that Avista will
establish an Energy Ef fi.ciency Assistance Eund ("EEAE")
to provide additionaf funding for projects that are not
otherwise fu11y funded through existing energy efficiency
incentives, or do not otherwise qualify for traditional
energy efficiency funding. The EEAF wlll- be funded with
a deferred liabil-ity owed to customers rel-ated to the
A.Ilowance for Eunds Used During Construction ("AFUDC'')o 25
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CASE NO. AVU-E_ 19_ O 4
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(Stip ) 18
STAEE
Equity Tax Deferral
and AVU-G-19-01, as
addressed in Case Nos. AVU-E-19-02
ordered by Commission Order No.
34326. This deferraf balance
Avista will also contr.ibute an
is approximately $800, 000.
addit ional S800, 000 in
befow-the-Iine doflars as a matching contribution to the
EEAE.
The funding wj-f f be disbursed as directed by
the EEAF Advisory Group, a new committee of stakeholders
tasked with determining which exi.sting or new programs
should receive this additional funding to address energy
efficiency, weatherization, conservation, and fow-income
needs in Avista's Idaho service territory. This
committee will- inj"tially consist of representatives from
Avista, Commission Staff, Clearwater, Idaho Eorest Group,
ICL, and the Lewiston ColTrnunity Action Partnership.
Other T€tes and Conditions
0. Are there terms and conditions described in the
Sett f ement ?
A. Yes. The new l-evel- of power supply revenues,
expeneses, retail .l,oad, and the Load Change Adjustment
Rate resuLting from the new December 7, 2019 stipulated
revenue requirement for purposes of the PCA mechanism are
detailed in Appendix A to the Settlement. Additionally,
the new level of basel-ine vafues for the electric FCA
mechanism resulting from
requirement are detailed the stipulated revenuein Appendix B.o 25
90 ENGLISH, D
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a. Does this concl-ude your testimony in this
proceeding ?
A. Ye s, it does.
CASE NO. AVU_E_19_04
L0/3t/1,9
(Stip I tq
STAEF
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CSB REPORTING
208.890.5r98
ENGLISH (Com)
Staff
open hearing . )
just go
members
straight to see if
of the Commission.
(The following proceedings were had in
COMMISSIONER K,JELLAN DER : And why don ' t we
there are any questions from
EXAMINAT ION
BY COMM]SSIONER KJELLANDER:
along
wan t
Q And, Mr. English, I do have one and it's
the same ]-ine as the term.ination f ee and I don't
any granularity and certainly donrt
specifics in rel-ationship to any
may have occurred within the
to delve into
want to go into any
conversations that
mi 11i on,
that s ort
has there been a report of kind from Avista
settlement discussions, but with regards to the 103
of outl-ines how that
any
has been used, whatmoney
and has
to the Commission?
A There have been a report and tal-k.ing
points provided to Staff, but not submitted as part of
the record or to the Commission.
the.ir rationale was for that,that been presented
that report, would
part of this ca se,
report prepared so
Q OkaY;
it be worthwhil-e that
but at feast that be
so with regard to
perhaps not as a
shared or anothero
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CSB REPORT ]NG
208.890.5198
ENGLISH (Com)
er-ff
at least we can understand in case
across the board in relationship
and the rationale for how it was
we're asked questions
that termination fee
used?
to
act ua J- 1y
happy to
to share those?
A Yes, and in preparation for today, I
prepared my own buffets points that I woul-d be
share with you.
Q I would appreciate that. Would you like
A Oh, right now? Oh. absolutely.
Q Okay.
A Ultimately, Staff analyzed the
woufd fove to be able to sit up here
termination
and tel ffee and I
you that we are capturing a
but what it came
of that for
is we actually had
table that I bel-ieve
progress and werre
rate decrease, but
the merger
one that we
parties for their
portion
down tocustomers.
such a great settlement offer on the
the parties did
happy with the
we did fook at
settlement and
not want to impede the
negative three percent
the conditions within
stipulation and we found
thought would benefit customers and the
lost time processing that merger case and that was the
stipulation that establ-ished the energy efficiency
assistance fund, and Avista did agree to contribute to
that fund out of shareholder money, and many of those
projects are going to go to the parties in this caseo25
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CSB REPORTING
208. 890. s198
ENGLISH (Com)
JLcI-L-L
th rough
Eo re st
different projects at the Cl-earwater or ldaho
Group, .l-ow income weatherization, and other energy
efficiency projects that may not have otherwise qualified
for the traditional DSM funding, so those energy savings
will come back to benef it al-l- custome.rs.
A1so, in our analysis we looked at what
other states were doing i-n regards to that termination
fee and we noticed that Oregon and Washington were also
not pursuing j.t, and so given the uncertainty surrounding
the outcome if we were to pursue that termination fee or
a port j-on thereof, we kind of just felt that the
settlement that was on the tabl-e was just a much better
deal- for customers.
Q So then as you Iook at the settlement
thatrs before us today and as you look at whatrs
happening in other jurisdicti-ons, how would you
characterize if this settlement stipulation is ultimately
approved by this Commission, is it -- would it be
consistent or inconsistent with what other jurisdictions
have done in reJ,ationship to the termination fee?
A It wouJ-d be consistent, although I would
state that I donrt bel-ieve the Washington Commission has
issued a ruling on the proposed settlement in their
state, so I wou.ld imagine if they approved that proposed
settlement, then al-l- states woul-d be consistent.I 25
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CSB REPORTING
208.890.5198
COMMISSIONER KJELLANDER :
Any other questions from members
Any redirect ?
MR. HAMMOND: No,
Okay, thank you.
Comm.ission?of the
Mr. Chai rman.
COMMISSIONER KJELLANDER: Great. thank
you.We appreciate
(The
your testimony today,
wj-tness left the stand, )
COMMISSIONER KJELLANDER: So as I look at
the remainder of the witness l-ist, I'm assuming that what
me very quickl-y is that you areto tellyou're going
comp.Iete; is that correct ?
MR. HAMMOND: You
The Commission Staff has offered
are right, Mr. Chairman.
al-1, of its witnesses and
thank you.
K,JELLANDER: Thank
our case is fully submj.tted,
COMM] SSIONER
SO
much, and so as I fook at the remainder of the
you very
witness
List, we've already dealt with the Community Action
Partnership consideration and, Mr. Purdy, thank you for
bringing that as a preliminary matter:, and I do not
bel,ieve we have any other witnesses that are scheduled
today for testimony, so I think that brings us to the
part of the hearing in which I woul-d ask if there are any
other matters that need to come before the Commissi-on at
this time.
If not, what I would like to say first iso
95 COLLOQUY
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CSB REPORTING
208.890.5198
this is our first legitimate hearing in this
glad that it went as smoothly as it did. We
know if your microphones work or not. Maybe
room and Irm
realIy don't
we'fl have
to have a more contested proceeding going forward to make
We also have some wonderful videoworks.sure everything
cameras, which
individualJ-y on
we did not use to
the monitors, but
highlight you
we're glad that you
could be here for our inaugural flight in the new
facility.
I hope you had plenty of parking when you
came here today, but also, I think from the perspective
of the Commission, I think eve.ryone always asks, "Gee,
gosh, if we go through settlement stipulations and you
settfe al1 these rate cases, is the publj-c interest
broadly served, " and I think that if we issue an Order,
of course, for approval of any settlement stipulations,
it's because we bel-ieve that was in fact the case,
because that is our litmus test, and I think what makes
it possible for
is the hard work that you
great I y
much for
appreciated across
constltuencies, but
us better arrive at
us to deliberate in scenarios fike this
aff put into
the board,
ultimately tovrards
something that is
this and that is
your service and broader service to your
so thank you
the end of
tn
ve ry
various
helping
public inter:est, so thanks again for all
the greater
of your efforts,25
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CSB REPORTING
208. 890.5198
and i-f there's no further
before us today, then we
business that needs to come
are adj ourned.
Mr. Chairman, Irm sorry, I doMR. PURDY:
have one additional question and that
COMMISSIONER KJELLANDER: Then what I
would like to do is say that
woul-d allow us to go back on
of you probably askj-ng about
MR. PURDY: I
we are not adjourned and
the record for the purpose
intervening fundj-ng.
am-
COMMISSIONER KJELLANDER: Okay, I
question, but still don't have an
I wiII do is suggest that typicalJ-y we
the date, implementation date, that we're
anticipated that
answer, so what
give -- what is
looking for? Is 1t Janua r y
MEYER:December
1st?
MR.
COMMISSIONER KJELLANDER: Oh, DecembeT?
MR. MEYER:1st.
MR. MEYER: 1st .
COMMISSIONER KJELLANDER: December what?
COMMISSIONER KJELLANDER: December 1st.
In order to get an Order out that woul,d include
intervening funding, we
quickly, and so would it
requests for intervening
Mr. Purdy, and let me ask
this around rather
to have that in --
may be submitt j-ng
quickly can $re turn
have to turn
be possible
others that
fundlng, howo25
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CSB REPORTING
208.890.5198
this around for you so that we can get this in and can
also get an Order out?
MR. PURDY: Speaking for myself, a week
wouLd be nice.
COMMISSIONER KJELLANDER: Okay, how is a
week for everyone
MR.
else that may be engaged in that?
OTTO :Irm stiff assessing whether vre
that's plenty of time for me.wi.I1 request or not, but
COMMISSIONER KJELLANDER: Okay; so we wil.I
give you a week. Does that sound good?
MR. PURDY: Sounds good. Thank you.
COMMISSIONER KJELLANDER: So we expect to
have that filing the day after Thanksgiving with a pl-ate
of food.
Is there anything el-se that needs to come
before the Comrnission before we adjourn again? If not,
then we are adj ourned.
(The Hearing adjourned at 9:53 a.n.)
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AT,THENTTCATTON
This 1s to certj-fy that the foregoing
the application ofproceedings hefd in the matter of
Avista Corporation for
rates and charges for
customers in the State
the authority to increase its
e.Iectric service to electric
of I daho,commenc.ing at
the Comm.ission
9:30 a.m
on Eriday,
Room, 113 31
November 22, 20L9, al Hearlng
Chinden Blvd., Building 8, Suite 201-A,
true and correct transcript of said
original thereof for the fife of the
Boise, Idaho, is
proceedings and
Commission.
a
the
Accuracy of aII prefiJ-ed test j-mony as
originally submitted to the Reporter and incorporated
herein at the direction of the Commission is the sofe
responsibility of the submj-tting parties.
O*-t*^"-
CONSTANCE S. BUCYCertified Shorthand Repor #187
CON$TA'{CE S BWT
t{OIAfrY PUSLIC . STAIE OF IMI{O
@ l.lBStOt{ M'rAm 12005
llYco{ rssloll ElPlREs 9+m2r
o 25
qo AIlTHENTlCATlON
o
o
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