20210603Avista to Clearwater 8.pdf.pdf

AVISTA CORPORATION
RESPONSE TO REQTIEST FOR INFORMATION
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DATE PREPARED: 061$f2021"' '
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i\.frtr-1t'rl,;j'lrrjriruRISDICTION
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-21.0I / AVU-G-2l-OI WITNESS:
Clearwater Paper RESPONDER:
Production Request DEPARTMENT:CP-OO8 TELEPHONE:
Elizabeth Andrews
Liz Andrews
Regulatory Affairs
(soe) 4es-8601
REQUEST:
For, the Company's proposed Rate Year I (RYD the total proposed increased revenue
requirement is $24.8 million, and the total proposed increased revenue requirernent is $8.7 million
for Rate Year 2 (RY2) equaling $33.5 million for the two year period. The total available tax
credit used to offset RYI's increased revenue requiranent equals $24.8 million. Please describe
in narrative format how the Company proposes to return the unused portion of the tax credit to its
ratepayers in the event the Commission orders a combined (RYl and RY2) increased revenue
requirement of less than the $24.8 million tax credit? Would your answer differ if the Commission
ordered azero increase in revenue requirement, and if so how? Would your answer differ if the
Commission ordered a decreased revenue requirernent, and if so, how?
RESPONSE:
The Company's proposed (as-filed) revenue requirement of $24.8 million contemplated that the
first-year rate impact would be offset by the electric tax credit for the period Septonber 1,2021
until the balance was fully amortized in late 2022, with no available balance to offset RY2. Any
combination of increases in RYI and RY2 approved by the Commission could be amortized in a
way to offset one or both rate years if the total tax credit allowed for it following the Company's
guidance below.
As noted in testimony, as discussed by Mr. Thies, because the retum of the Tax Customer Credit
benefits will have an impact on the Company's cash flow, weakening credit metrics tracked by the
rating agencies, the Company requests that, regardless of the electric and natural gas base revenue
increases approved in this case, the electric and natural gas tax benefit amortization does not go
beyond base rate increases approved on an annual basis, and does not go beyond a two year
amortization period for those increases. Any rernaining balance after the two-year amortization of
the rate period increases included in Tariff Schedule 761176, would be amortized over a 10-year
period going forward.
If the Commission were to approve azero increase, or a negative adjustment, due to the impact on
the Company's cash flow, weakening credit metrics tracked by the rating agencies, the Company
would propose, similar to that proposed for natural gas, the commission approve a l0-year
amortization of the electric tax credit beginning September 1,2021.